Willmar tribune. [volume] (Willmar, Minn.) 1895-1931, 1922-06-28

|H THE The RA 4, !! ]. RO Q 4 |
IN Published BY the
brotherhood Of Loco. Engineers
How the Public Is Deceived Concern.
ing Railroads Income. |
This is the story Of the most braz-
emily Inaccurate piece Of propaganda
put across" by the railroad execu-
tives since the return Of the roads to
private management.
Howard Elliott, chairman Of the
Northern Pacific, appeared before the
Senate Committee on Interstate Com
merce as one Of the chief witnesses
for the railroads., and undertook to
show by charts and tables Of statistics
that return on railroad investment
has been shrinking since 1916, until
in 1920 it<is a very small sum indeed
| Mr.. Elliott told the Committee that
in 1920 the railroads had only SOL $685.
626 available to pay interest and divi-
dends and make better.ments and inn
provements out of surplus"
Even that, he said, did not tell the
full! story, because in 1920 the roads
had received from the government
back pay to the amount of $64,5O8.2
for carrying the mails during the years
1918 and 1919. Without this back mail
pay, Mr.. Elliott assured the Commit
tee, there would have been "a slight
deficit" .~>- u. -
Mr. Elliott's statements were carri-
ed all over the country and were given
unusual prominence in the news and
editorial columns of the newspapers.
How Elliott Distorted Facts
The amazing extent to which Mr..
Elliott twisted the facts was revealed
by pr. Frank J. Warne, the noted &C.
onomist, when he told the Senate Co
mmittee on interstate Commerce that
"the railroads had in 1918, 1919 and
1920 larger returns to apply to their
investment than in any other years of
their history, with the single excep-
tions Of 1916 and 1917" -.
| The return on investment received
by the railroads in 1920 was $78s, $685.
o4s, instead Of $61, e28,626, as reported
by Mr.. Elliott. =.
1t was 5000, 524,492 in each of the
years 1919 and 1918, and not $454,e84,-
s53 and $e3s,568, 6o3 respectively, as
stated by Mr.. Elliott in the charts and
tables of figures which he submitted
to the Senate Committee.
Mr.. Elliott told the Senate Commit
tee that the proportion of income go
ing to railroad investment iK 1920 was
one cent out of each dollar received.
AS a matter of fact, it was l1.4 cents
In 1919 capital received 1862 cents
out Of every dollar, instead of e.8 as
claimed by Mr.. Elliott.
Vast Sums for Maintenance
Mr.. Elliott stated to the Committee
that $61,92S,626 was not only all that
was "availajble to pay interest and
dividends" in 1920, but it also repre-
sented what the railroads had avail
able to make betterments and i'm
|
The truth is, as DR.. Warne showed
from official reports, that the railroads
expended more for "betterments and
improvements" in 1920 than in any
other year in their history
It is true that the expenditures were
not made tout of surplus" but they
were made out of the money received
by the railroads. and which never
had a chance to get into the surplus
account because it had been spent be-
fore that stage Of bookkeeping was
reached.
To show how far Mr.. Elliott's state
ments on this point were out of line
with the facts. DR.. Warne pointed out
that in 1917-when the~railroads were
under private management and their
! operations were unusually profitable
the roads expended $1,12S,O0O, 900
on maintenance.
In 1920 they expended 100 per cent
more for maintenance than in 1917.
This increase amounted to $1,470,OOO,-
900.
In other words, the total mainten-
ance expenditures in 1920 were $685.
100000 more than double what they
were in 1917. ~
Piled up Surplus Property
But that is not all of the story. The
railroads not only expended this I'M
precedented sum on maintenance in
1920, but at the close. of the year they
had OH hand a total of materials and
supplies of $617,733,4S2, an increase
over 1919-the last year of govern
ment operation $17S,564,39O. Ev-
cry dollar of this came out of the
public treasury.
How did Mr.. Elliott reach the amaz-
ingly inaccurate results which he pre-
scented to the Senate Committee?
BY the very simple method of "for-
getting" every dollar paid to the rail
roads by the United States govern
ment in the form Of rentals or quar-.
anty. For the years. 1918 and 1919
this amounted to more than $780,
4 ofa