The labor world. [volume] (Duluth, Minn.) 1896-current, 1922-05-27
RAILROADS were NOT LOYAL TO ILL.,.
NATION DURING FEDERAL CONTROL

! dated Jan. 10, 1918, advised Mr.
| Besler as follows: :
I'VE are in a great war and ex.
cuses are not worth anything. The
only thing that tells now is results.
The public demands them and the
life of the nation demands them.
II would not be candid If I did
not tell you that am not fully sat-
isfied with the efficiency of the
management Of the Central Railroad
of New Jersey. believe that great
improvement can be made, and
look to you and the officers of that
system to bring about that improve
ment at the earliest moment
II would not be frank if I did not
tell you that unless there is a de-
cided improvement in the efficiency
OF the Central Railroad Of New Jer-
sey system, a. change in the man.
agement will become inevitable. This
I should deeply regret"
1T sufficiently appears from this
correspondence with the railroad ex-
ecutives," said Mr.. McAdoo. that
they were upon full notice that their
management was on trial and that
excuses would not be accepted"
In their replies to Mr.. McAdoo,
Messrs. Rae, Willard, Dice and Bes-
Ter made the same excuses that they
had been told "were worthless and
would count for nothing"
1T is reasonable to assume" said
Mr.. McAdoo. that in view of the
assurances Of cooperation and sup
port given by railroad officials to
make government operation sue
cessful for the purposes of the war.
and in view Of the exercise of all
the powers of the government to
help the railroad corporations OPP
crate the railroads at the highest
point of efficiency, the executives
did their best to manage these prop
critics efficiently and successfully,
and yet during the first five months
of 1918, when they operated the
railroads as agents Of the director
general, results were most disap-
pointing. The railroads earned for
|. the government during this period
of 1918 far less net revenue than
they earned for their private own
ers during the same period Of 1917"
The railroad executives earned a
net operating income for their cor
porations for the first five months
of 1917 of $346,439,522, yet, with
the advantage of commodity and
class rate increases. while operat-
ing the same properties for the first
five months of 1918 for account or
their government, there was de-
| crease in net operating income OF
s131,16O,6S1, with a. resulting loss
of $162,43s,6s7 to the government
after paying rental to the corpora
tons.
The cost, of inefficient operation
fell directly upon the government,
Mr.. McAdoo points out, because the
railroads hard been guaranteed a rem
| tai Of $9O6,00O,00O a year-a rental
so-large that Senator Cummins, good
friend of the railroads that he is,
declared that lit shocked the moral
sense Of mankind"
The proportionate amount Of rem
| tai due the carriers for the five
months the roads were being inefi-
| ficiently managed by their officers,
was $377,71s,53s. The net income
for the same period was SIS, 49S,117.
If we deduct the net income from
| the rental" Mr.. McAdoo said, 1--WE
have a loss for the five months of
1851, 220,421. or more than the total
| deficit for the year 1918. viz: $780,
| 105.714. On this basis there was a
surplus for the last seven months of
| 1918 of $145,114,707 as compared
| with a. loss of $361,220,421 for the
first five months of 1918.
eff, in these circumstances" asks
Mr.. McAdoo, 'there had been no
deficit, what becomes of the charge
Of extravaganza and wasteful inef-
ficiency now preferred against fed
eral control? DO not these figures
show that the waste, inefficiency
and incompetency, If any, wars shown
by the railroad executives when they
were operating the railroads for &C
count Of the government during the
first five months of 1912"
! Mr.. McAdoo deliberately charges
that "private control was wholly a
failure during the war"
1.-The issue is inescapabfe," he
says, that If there wars in 1918 ex-
ttravagance and inefficiency, these
railroad executives were guilty OF
it, and If they were not guilty then
they are now, for their own pur.
poses, guilty Of an attempt to be-
smirch the record.
"What excuse can they offer FOL
their reckless and indiscriminate
criticism Of the operation Of thu
railroads under federal control when
figured on any basis, by far the
greater part of the deficit for the
year 1913 occurred when they were
operating the carriers for tho &C
count of their government"
After the enactment Of the federal
control act by congress Mr.. McAdoo
removed corporate manageme nts
with Immediate and gratifying ben
eft" to the transportation systems.
On this point he says:
"Experience Of almost five months
with corporate arrangements con-
WINGED me that their officers were
SO. habituated to competitive prac-
tees that it was impossible even I'M
der. government control to prevent
them from competing with each 9th
err for business. Tradition and habit
were too strong. For this and other
reasons enumerated, it was neces-
! sarv to relieve the corporations of