The labor journal. [volume] (Everett, Wash.) 1909-1976, 1921-06-03

cies of looting and graft that in
-enious minds could devise.
In other words, the railroads are
caught in the economic net that the
managers have been spinning and
Congress is unable to extricate
them, no matter how earnestly it
may strive to do so.
When the transportation act was
being considered by Congress the
prediction was made that if enacted
it would not in any measure solve
the problems of the railroads. 1t
was recognized as an unscientific,
uneconomic effort to artificially in
fluence the immutable law of bust
ness. 1t had for its main object the
recognition of the billions of dol
lars of fictitious capitalization that
had been ploughed into railroad in
vestment accounts, and then 1t set
about to guarantee a fixed annual
return on all this capitalization. 1t
directed the Interstate Commerce
Commission to establish rates that
would yield the carrier 6 per cent
annual income upon approximately
$40 O00,00O,0O0. In obeying it's in
structions the Commission brought
about the ratio of diminishing re-
turns" for higher rates restricted
traffic and defeated the purpose that
Congress had in view.
There is a difference of nearly a
billion dollars between what the
roads say they must have and what
they are really getting. Unless they
can effect economies that will close
this gap, they must have higher
rates-which will aggravate and not
palliate their troubles-or go into
receiverships.
Of course, railway managers harp
great deal about eXtravagant
wages paid to workers, but this is
simply blind to conceal their own
incompetency and dereliction. If
the workers are reduced to a starva-
ton level the railroads will not yet
have solved their financial difficult
ties. They must do something for
themselves and not be permitted to
take out of the slim pay envelopes
of the workers the amount needed
to maintain a system founded large
ly on extravaganza and graft.
1t must be clear to open minded
students of the railway impasse that
the only real and abiding way out
is to retire private managers and
place transportation under kovern-
ment control. Two years ago those
who urged the Plumb Plan as a
remedy contended that it alone
could afford real and permanent re-
lief They pointed out the things
that would happen to the railroads
if the government lost control over
them, and everything prophesied and
much more has since transpired.
The railroads are even in worse
shape than their severest critic had
dared to forecast. They are break
ing down everywhere, and it is dawn
ing upon the single minded gentle
men who are responsible for this
condition that legislation will not
help an incurable malady.
When such astute defenders of
private control as Senator Cummins
are forced to admit that it is fail
ure and cannot exist, the end of its
ruinous rule cannot. be far off.
To save the managers the govern
ment will find it necessary to heav-
lily substitute the carriers, and it is
inconceivable that any politician who
is solicitous of his future will go as
far as that. The stencil of the bill
lion dollar guaranty that was given
to the railroads during the first six
months of resumed private opera
ton is still in the nostrils of the
public. 1t was the most malodorous
legislative miscarriage that has
emanated from Congress in many
years. 1t served merely to empty
the treasury without doing anything
of real value for the railroads. 1t
encouraged a season of riotous eX
penditures and diversion of funds
from the railroad treasures into
locomotive and car plants controlled
by railroad officials, criminal acts
that are now receiving attention
from the Interstate Commerce Com
mission. 1t is highly possible that
the offending roads will be required
to return to the government large
sums-aggregating for the country,
it is said, nearly a billion dollars
that were unlawfully paid for re-
pairs. When the roads receive their
their financial compleXI-
ties will be increased and they will
be just that much nearer the falling
off place.
Only a miracle can save the situa-
ton, and Congress is not. as has
been demonstrated many times, a
miracle worker. 1t has but a hazy
conception of the elements of this
problem, having relied heretofore
upon the advice so freely given by
railroad lobbyists. Those gentlemen
exhausted their demands when the
transportation act was written and
now have nothing to suggest in the
way Of amelioratives unless it be
continued subsidies, and Congress
men are scared stiff when that al
tentative is suggested. They are not
going to put themselves deeper in
popular disfavor if they can help it.
With all the roads blocked save
the Obvious and sensible one of gov
eminent ownership, Congress is GO
ing to take it willy-nilly, and that
before many months have been roll
ed back on the scroll of time.