South Bend news-times. (South Bend, Ind.) 1913-1938, 1922-02-03
SAYS RAILROADS
WERE SAVED BY
WARTIME RULES
McAdOO DenOunces & a m :
Roads We're Ruined bv
Federal Control.
PUBLIC BENEFITED, TOO
Former Director General Says
Over a Billion Was Spent
for Roads.

WASHINGTON. Feb. THE
charge of certain railroad execu-
tives that tho government ruined
the roads Is sroundlezs. William g..
AIcAdoo. former secretary Of the
treasury and war time director-gen-
eral OF railroads. told the senate in
terstate commerce committee Thurs
day in concluding his testimony in
ia Inquiry into the transportation
situation.
The indisputable fact is that the
government saved them" he de-
clared. adding that government OPP
Grafton gave the public improved
service and saved millions OF dol
lars in transportation costs"
Summarizing his testimony. Mr.
McAdoo asserted that he had shown
shat 'the appalling transportation
crisis at the time federal control
was inaugurated forced. as a vital
military and economic necessity, the
taking over OF the railroads that
federal contrOl-alOue could save
the situation and did save it, and
that Congestion was broken. rail-
road lines were cO-Ordinated and OPP
Grated a. an effective national ma
chine and the required amount of
transportation 20 meet military
needs-was supplied"
Industry Generously Treated
10 great industry was ever more
generously treated by the govern
ment." said the former director, de-
claring that during federal control it
had assumed all risks of operation,
protected bond and stockholders
during the war transformed the
properties from "a menace to pub
Tic safety" ia January 1918, as
stated by the interstate commerce
commission, into can efficient ma
chine; had stabilized" railroad
labor and during the period Of con-
troll. had guaranteed the roads an
annual rental OF 1905, 100000 on
S175.O00.00O more than Chairman
Cummins of the committee had said
they were entitled to receive. In ad-
dition. he said the carriers were
given a basis for rate making which
assured them with return of nor
NAL business conditions. an annual
income Of $1.t34O0O.0O0, or $500
coo. coo more than the government
rental. and were guaranteed against
losses for six months after the return
OF the properties TO private control.
Over-maintenance OF the railroads
during the period Of control. Mr.. Nc
Adoo Contended, offset an claims for
under
Operating Cost Cut
The monthly operating cost under
federal control. he said. was S375,-
ass. SI3. compared with $475,257,239
under subsequent private manage
ment This. he pointed out, was
equivalent 70 a saving under govern
ment operation of S97.2oS,2S6
month. or S1.167,22O632 a year. He
placed she cost or operating the rail-
roads since restoration # the nrop-
critics TO the corporations a. % per
cent higher than 10 was during fed
eral control lie attributed the
increased cost OF operation under
private control iu part. TO the loss
If all marked economies resulting
from unified control under the gov
eminent" and advocated establish
ment OF a system of unifcl-ion TO
bring about an economical common
use Of terminal and other facilities Of
the different roads. The railroads.
McAdoo said. expended daring the
six months guarantee period S4O2,-
$50. 600 more than In q similar period
iu 1919 He read letters 10 show
that orders for equipment plaoed by
the roads during the guarantee
period were accompanied by in
struotions that the bills should be
submitted before expiration Of the
SIX months.
Costs 81, 300. 100000
Coins into railroad expenditures
Tor betterments and additions charge
able 20 capital account. at the re-
quest OF Chairman Cummins. Mr..
NcAdo0 declared such costs tOtalled
$3S2. 600. GOO in 1916: 8542.7OO. 900 in
1917 and about $3.50. OOO. 600 each
year during federal control Sen.
Cummins commented that the gov
eminent had expended relatively
more on the roads under fits manage
CONTINUED on page two)