Newark leader. ([Newark, Ohio]) 1917-1946, 1921-08-19
Graft is Exposed
MAKE RAILROADS REPAY THE
STOLEN MONEY
Railway Employees Department Asks
Prosecution of Treasury Raiders
and Restitution of Money
Illegally Expended

If the Interstate Commerce Com
mission follows the suggestion of the
Railway Employees Department OF
the American Federation of Labor
the Pennsylvania railroad will be re-
quired to pay back into the Federal
Treasury more than $3,0O0,000 taken
from it through excessive charges for
locomotive repairs made by the Bald
win Locomotive Works.
Three other roads-the New York
Central, the Atlantic Coast Line and
the Seaboard Air Line-will also be
required to reimburse the government
for millions of dollars wasted in loco
motive repairs under contracts with
outside concerns.
The Railway Employees Department
has filed with the Commission briefs
reviewing the evidence bearing upon
locomotive repair contracts made by
the roads with Baldwin's. That evil
dence, it is urged, clearly proves that
the managements of these roads set
out with the deliberate purpose of de-
frauding the government during the
six-months' guaranty period of the
transportation act by discriminating
against their own plants and workers
in favor of outside concerns controlled
by the same financial interests that
dominate the roads
1t is urged in each case that the
evidence shows that the letting of
this contract in question was unjusti-
fable and improvident; that the re-
suit was to defraud the Federal gov
ernment; that the whole transaction
was in disregard of the honest, eff
ficient and economical management
required by the transportation act of
1920"
The briefs set forth that the Penn
sylvania railroad expended without
warrant or justification $4,500,O00 for
repairs to locomotives made in out
side shops. Had the repairs been
made in the company's own shops the
work would have cost $3,173,982 .33
less.
The New York Central, for repairs
made to 195 locomotives sent to out
side plants, expended $3,169,322.35
more than the repairs would have cost
had the work been done in the Cen
trails shops.
The excess and unwarranted ex-
penditure by the Atlantic Coast Line
was $3O6,3O4.13, and blythe Seaboard
Air Line $442,19s.19.
The Baldwin Locomotive Works,
the briefs say, was the principal bene-
ficiary of all these transactions. The
methods employed by the several
roads are so similar as to suggest
that a definite, concerted plan had
been agreed upon by the offending
carriers whereby they were able to
pursue hostile attitude toward the
workers and pyramid expenses at a
time when the government, by reasons
of the generous provisions of the
Cummins-Esch bill, was paying rail-
road bills.
1t is the Commissions duty, the in
tervenors declare, to determine
whether or not the railroads have
managed their affairs "honstly, ef-
ficiently and economically" as the
law requires, and in doing so it will
be necessary to establish certain prin
ciples OF standards of management
and to measure the acts of the rail-
roads against such standards.
1t is pointed out that railroad fail
ures are fairly frequent, many of them
being gravely censurable. The exis
tence of the Commission is evidence
of that fact, and it is further evil
dence that the public demands that
managcments be held to rigid ac-
countability, that the industry may
not suffer by reason of reckless,
wasteful or criminal practices.
The evidence Tin the Pennsylvania
case) shows that the initiative in MAX
ing this contract was taken by the di-
rectors or higher officials of the rail-
road, above the chief of motive power,
and possibly that they forced the con-
tract upon the chief of motive power
against his real honest judgment.
The question as to whether the let
ting of the contract was an error of
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