The labor world. [volume] (Duluth, Minn.) 1896-current, 1922-05-06

- SS~~AASeHAt AOAyh,Shc cHuSyl.
vania, stationed at the Baldwin
plant, reported to q. M. ellsworth,
motive power accountant afAltoona,
Pa, that there are hundreds OF
cases where work has been done the
second time and that there
were numerous other cases where
they have paid the contractor for
performing work which was not
DONE, in which case think we
should refuse to pay T..
This apparently did not, disturb
Mr.. Ellsworth, for he replied as fol-
lows to Mr.. Etonebach:
LAS I see the matter, we will have
to pay Baldwin's for all the work
they did on these locomotives. even
though it may have been done twice,
due to the inefficient method Of
handling the work. We. of course,
should take the necessary steps to
satisfy ourselves that the work was
actually done twice. T.. - =
Intent to Defraud. ST.
10" The revelations as they affected
the Pennsylvania9ra railroad apply
with varying adegr1, but with the
same evidence OF deliberate and
criminal intent to defraud the gov
eminent, to- all other railroads in
vestigated by the Interstate Com
merce Commission. In every case
private concerns were. paid from
three to six times what the work
would cost it performed In company
shops: ~.
Additional> information on this
phase of private operation. during
the six-months' guaranty. period
was furnished by DR.. Frank J..
Warne, an economist OF unques-
toned repute. to the Senate: Com
mittee on Interstate Commerce,
where he appeared as representa-
tive Of the 100000 members of the
four transportation brotherhoods,
His testimony pointed conclusive
ly to the fact that while the govern
ment was putting it's. resources be-
hind the railroads, railroad manag-
ers We're bending every energy. to
increase maintenance costs. -
THE very first month federal
control ceases, but: guarantee con-
tinues," DR.. Warne said, total
maintenance expenses began to
move upward, the; curve rising each
month and eliminating in a striking
Jump in August to nearly $32O,O00,-
900, an Increase from $185,OOO,OOO
to s32o,o0o,000. or .$135. 00o,0 900, or
OF 10 per cent. "
This drops to $229,00o, 900, a. de-
crease OF s9.5 per cent. the very
first month the guaranty period
ends and private operation: contin-
ues without the guaranty. BY the
end Of the following six months
total. maintainence is back again at
identically the same basis practical
ly as at the BEGINNING of the last
year of federal CONTROL"
The only inference that can be
drawn from these figures is that
when the railroads. were operating
under a guarantee the managers
were initiating maintenance costs,
which began to decline Immediately
the federal treasury was closed to
them.
During each six months period
\N"As~A I'll ~ aug Sk, UOl1l INCLUSIVE J.,
of 1915. 1916 and 1917, the most
profitable years in the history of
American railroads. total mainten-
ance averaged less than $4,000, 900.
During the same six months Of 1920,
this being the period Of private: OPP
eratiion under government guaranty
maintenance reached a monthly av-
erage Of $227,O00,0O0, an increase in
the average of $143,0O0,0O0, or
nearly 173 per cent.
Total maintenance cost for the six
months, September, 1920 to Febru-
ary, 1921, inclusive, averaged &c.,
100000 per month less than the av-
erage maintenance cost for the pre-
ceding six month period of private
operation but with the government
guarantee.
Making Government Pay.
THE conclusion is indisputable,"
declares DR.. Warne, that immedi-
ately upon the return of the roads
to their owners, but while. still as
sured of the government guarantee,
they began extraordinary expendi-
lures in order to put their way and
structures and their equipment in
the highest state Of efficiency at the
expense, If possible, Of the govern
ment"
When Congress enacted the Cum
mins~Esch law it left the door wide
open to nearly every method of
reaping unjust profits that unscru-
pulous men could devise. -
Railroad managers were quick to