, 1921-05-24
FAR FROM SQUARE DEAL.

10 thar. il m open question before the American
people today, of greater moment and affecting more
people than the adjustment yet to be made between
the railways and their operatives, we are unaware oil
il. Evidence continues To pile up before the inter
state commerce committee OF the senate; ottered oy
tn ablest authority upon each side OF the case. a
statement made by Julius Kruttsehnitt, head of the
Southern Pacific system, will not be questioned by
any fair minded persons, because of its business;
"It is a just cause of complaint against the director
reneral that he neglected and refused to recognize
and satisfy the moral obligation he was. under to
make, in the revenues of these properties, an increase
corresponding with the enormous and destructive bur
den of expense which he had placed upon them, and
left the carriers to assume the burden before the pub
lie of seeking an increase of rates to meet the increase
Of expense which he had placed on them. 1t was
easy to impose this increased burden upon the car
riers. 1t would have been a most ungracious task to
transfcr It to the public. So this task was left to the
carriers and they were confronted at the threshold of
rcsuming their relations with the public with the ne
eessity to assume the responsibilities OF asking a large
increase of rates. In equity this obligation was not
theirs@it was the obligation of those who had created
the necessity"
1t was notorious that the railroads we're not max
ing more than a reasonable income on the investment
at the time the government took the roads over. A
great many of them were falling far. short of making
q reasonable income. Knowing this to be true. the
director general, acting under the authority of Presi-
dent Wilson, increased the expenses of the railroads
without at the same time either increasing or attempt
ing to increase their income. He gratified the rail
road employees and won their personal and political IA
vor by increasing their wages and reducing their hours
of labor. But he left the railroad managers to bear
the enmity of the shippers, when they asked, as they
must ask, for an increase of rates to cover the in
creased expenditures.
Doubtless the director general thought this was a
shrewd political move. Perhaps he thought he could
gain the favor of q large number of people without
mourning the displeasure of any. But the fair minded
people of the United States will not draw any such
hasty conclusions as were apparently expected by Mr..
McAdoo. The business men of the country from the
peanut vendor on the street corner to the executive
head of the largest industrial enterprise, knows that
you cannot go on indefinitely increasing expenditures
without sometimes securing an increase in income. 1t
will also be recognized as n fair proposition that since
the railroads were not making an e%xorbitant income
at the time the government took control. the admin
istration should have made an increase in revenue cor
responding to its increase in expenditures.
Moreover, there is one point which Mr.. Krutt-
schnitt did not emphasize but which the public should
not overlook. 1t is this-when the government in
creased the compensation of railroad employees it put
the increase into effect several months back of the
time when the order was made, but when there was
an order authorizing an increase in rates, the new
rates did not go into effect until after the order was
made.
In practically all of its acts the railroad admins
tration Disseminated against the owners of the rail
roads and resultantly against the general public, be.
cause of the vital effect transportation has upon all
business