Alexandria gazette. [volume] (Alexandria, D.C.) 1834-1974, 1922-04-03
We're Railroad Officials Loyal to
Government During Federal Control

. the naLlOu uemandS lnSfn.
Il would not be candid if did not
tell you that | am not fully satisfied
with the efficiency of the management
Of the Central Railroad Of New Jer-
sey. | believe that great improve
ment can be made, and | look to you
and the officers of that system to
bring about that improvement at the
earliest moment.
81 would not be frank if / did not
tell you that unless there is decided
Improvement in the efficiency OF the
Central Railroad of New Jersey sys-
tenn, change in the management will
become inevitable. This / should
deeply regret"
1T sufficiently appears from this
correspondence with the railroad eX-
ecutives." said Mr.. McAdoo, that
management was on trial, and that
they we're upon full notice that their
excuses would not be accepted"
After the enactment of the federal
control act by Congress Mr.. McAdoo
removed corporate arrangements,
with Immediate and gratifying bene-
fit" to the transportation systems. On
this point he says:
Experience of almost five months
with corporate arrangements convlnc-
ed me that their officers were to habit
uated to competitive practices that 1t
was impossible even under govern
ment control to prevent them from
competing with each other for bust
ness. Tradition and habit were too
strong. For this and other reasons
enumerated, it was necessary to re-
lieve the corporations Of the manage
ment of the railroads and to apply
federal control direct"
To the charge of inefiiciency is add
ed that of disloyalty, or worse, made
by Frank McManamy, assistant Dl-
rector OF Operations during federal
control, who declared that railroad
officials "have wrongfully paid out
millions of dollars" in padded pay
rolls, These overpayments, Mr.. Nc
Aanamy said, were deliberate" and
in direct violation of the instructions
OF the Director General.
The record, then, clearly shows that
some railroad officials were lncompe-
tent and inefficient, as well as dis
honest: and that during the most
critical period of the nations history
they withheld loyal and willing ser
vice that was cheerfuly given by
the railroad workers.
In their replies to Mr.. McAdoo,
Messrs. Rea, Willard, Bice made the
same excuses that they had been told
were worthless" and "would count
for nothing"
1T is reasonable to assume" SAID
MIR. McAdoo, that in view of the as
surances of cooperation and support
given by railroad officials to make gov
1rnmcnt operation successful for the
Of the war, and IN view OF
the exercise Of all po%ers Of the Wv
arnment to help the raildoad corpora
lions operate the railroads at the
highest point of efficiency, the eXecu-
tives did their best to manage these
efficiently and successfully,
and yet during the first five months
of 1918. when they operated the rail-
roads as agents Of the director gen
eral. results were most disappointing.
The railroads earned for the govern
ment during this period Of 1918 far
less net revenue than they earned for
their private owners during the same
period of 1917"
The railroad executives earned a
not operating income for their cor
for the first five months "
1917 Of 346,439 ,522, yet, with the adj
vantage of commodity and class rate
increases, while operating the same
properties for tie first months of 1918
for account of their government,
there was decrease in net operating
income of 1913, 160,6S1, with re-
sulting loss of $162, 499,697 to the
government after paying rental to
the corporations.
The cost of inefficient operation fell
directly upon the government, Mr.
McAdoo points out, because the rail
roads had ben guaranteed a rental SO
large that Senator Cummins, good
friend Of the railroads that he Is, de,
clared that ut shocked the moral
sense of mankind
The proportionate amount of rental
due the carriers for the five months
the roads were being ineificiently man
aged by then officers, was S317,1lo'-
III.
III we deduct the net income from
the rental" Mr.. NcAdoo said, I'VE
have a loss for the five months OF
SS6l ,220, 421, or more than the total
deficit for the year 1918, viz: 92lb,-
1O5,71I On this basis there was a
surplus for the last seven months OF
1918 Of S1t5,l1i,707 as compared with
: loss of $36l ,220, 421 for the months
Of 1918.
Ii, in these circumstances ask
I Mr.. McAdoo, there had been no de
felt, what becomes Of the charge OF
extravaganza and wasteful inefficient
cy now preferred against Federal con
troll? Do not these figures show that
the waste, inefticiency and incompe
tency, if any was shown oy the rail
road executives when they were op
Grating the RAILROADS for account o.
&c government during the first ilv'
months of 1882
Nr. McAdoo deliberately charge
that private control was wholly TAI
are during the war"
"The issue Is iuescapable,' ne says
..+%o+ IL there was in 1918 eXtraVa