Arizona republican., 1922-02-03
N'ADOO SAYS ECONOMIC CRISIS
FORCED GOVERNMENT To TAKE
CONTROL Of ROADS DURING WAR
TRepublican A. p. Leased Wlrel

WASHINGTON, Feb. ?. - The
charge Of certain railroad executives
that the government ruined the
railroads is groundless. William G..
McAdoo. former secretary of the
treasury and war time director-sen-
eral of the railroads told the senate
Interstate commerce committee today
in concluding his testimony In its in
quiry into the transportation situa-
ton.
"The indisputable fact is that the
government saved tl-en," he declared
adding that government operation
gave the public improved service and
Saved millions of dollars in trans
portation costs"
Summarizing his testimony, he as
serted, he had shown that ''the apall-
ing transportation crisis" at the time
federal control was enacted, forced,
as a vital military aud economic
necessity, the taking over of the rail-
roads" that federal control
alone could save the situation and
did save it" and that congestion was
broken, railroad lines were coordi-
mated and operated as an effective
national machine and the required
amount of transportation to meet
military needs was supplied.
No great industry was ever more
generously treated by the govern
Ing federal control it had assumed
all risks of operation, protected bond
and stockholders during the war,
transformed the properties from "a
menace to public safety" in January,
1918, as stated by the interstate COM
merce commission, into an efficient
machine" had stabilized" railroad
labor, and during the period Of con-
troll, had guaranteed the roads an
annual rental of $906, 100000 or $175,-
10000 more than Chairman Cum
minis of the committee had said they
were entitled TO receive. In addi-
tion, he said, the carriers were given
a basis for rate making which as
sures them, with a return to normal
business conditions. an annual in
come of $1,134,0O 600 or 100000, 600
more than the governmental rental,
and we're guaranteed against losses
for six months after return of the
properties TO private control.
Cut Monthly Costs
Over maintenance of the railroads
during the period of control, Mr..
McAdoo contended offset all claims
for under maintenance. Tie monthly
operating cost under federal control,
he said, was 1915, ,9SS.S13, compared
with $473,267,2 ,239 under subsequent
private management. This, he pointed
out, was equivalent TO a saving under
government operation of $97,26S,2S6
a month. or S1,167,220,632 year. He
placed the cost of operating the rail-
roads since restoration of the proper
ties to the corporations at 80 per
cent higher than II was during fed
eral control.
He attributed the increased cost of
operation under private control, in
part, to the '1oss Of all marked
economies resulting from unified
control under the government and
advocated establishment of a system
of unification to bring about an
economical common use of terminal
and other facilities for the different
roads.
The railroads, he said. expended
during the six months guarantee
rcriod S402.750,000 more than in
similar period in 1919.
Going into railroad expenditures for
betterments and additions charge
able to capital account, at the re-
quest Of Chairman Cufnmins, Mr..
McAdoo declared. such costs totaled
1882. 100000 in 1916: $542, 100000 in
1917. and about 1852 ,000 900 each year
during federal control. Senator
Cummins commented that the gov
ernment had expended relatively
more on the roads under its manage
ment than had been expended by the
owners prior to federal control. ...
Big Government Expense
"That is true" the former direc-
tor general replied. The railroads
have been unable to keep up their
nj ia Va Oh .fu x1rni rl
is necessary to produce cheap trans
portation."
Mr.. Cummins questioned the wit
ness closely as to the cost to the
government of operating the rail-
roads. Mr.. McAdoo called attention
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