Newark leader. ([Newark, Ohio]) 1917-1946, 1922-04-07
The U. Held Up
RAILROADS DEFRAUD GOVERN
MENT ON SHOP WORK
Contracts Let to Dummy Companies
at ExOrbitant Prices - Manager
of Horse Manure Business
in Charge of One

Washington, ID. c. The United
States government was defrauded OF
almost half million dollars by the
Central Railroad of New Jersey dur
ing the six months following the re-
turn of the roads to private control
through cost-plus contracts for lo:o-
motives made with the Baldwin ard
American Locomotive Works, accord
ing to evidence developed by agents
for the Interstate Commerce Com
mission and produced at public hear
ing held before Examiner Frank II.
Barclay in New York City.
The Central of New Jersey employ
ed the same methods successfully
adopted by the Pennsylvania, the New
York Central, the Atlantic Coast
Line, the Chicago, Milwaukee & St.
Paul, the Chicago and Northwestern
and the Chicago, Burlington and
Quincy to pad costs when the govern.
ment was guaranteeing the carriers
expenses. These six roads have been
subjected to searching Investigations,
which brought out the fact that they
paid for engine repairs six times as
much as the work would have cost
had it been done in the companies
own shops. Together they put an
unjust burden of many millions Of
dollars upon the Federal treasury. .
The similarity of methods pursued
by these roads establishes suspicion
amountig almost to certainty that
there was effected a nationwide con-
spiracy to pile up unwarranted eX-
penses that the governmen, under the
terms of its contract with the roads,
was required to pay.
During the guarantee periol the
Central of New Jersey sent 81 engines
to Baldwin's and the American Loco
motive Company for repairs, at
cost of something more tina $4,000, 600.
This was at least $415,152 more than
the cost of similar work IN that roads
repair shops, according to witnesses
produced by the Interstate Commerce
Commission investigators.
When the raid was being consum-
mated the Central of New Jersey
was discharging its own employees
and permitting its plants to drift into
a demoralized condition, witnesses
testified.
Engines were being sent to Bald
wins at a time when the Central
shops were operating at much less
than their capacity. 1t was admitted
by company officials that locomotives
had been kept in shop from 10 to IA
months without any work being done
on them. The explanation given was
that men could not be obtained, a
boomerang, as it developed, when
Counsellor List offered testimony
tending to show that the company
was actually dismissing its employees
or transferring them to other and less
important work.
The sensational exposure that the
Wagner Construction & Supply Co.,
to which has been farmed out the i'm
portant terminal shops of the Erie
railroad at Jersey City, N. j., was in
reality the Jersey City Horse Manure
Co., has served to bring out striking
ly the insincerity of the policy that
has been adopted by that carrier over
it's entire system.
All Jersey City has been laughing
at the expense of the Erie manage
ment, and Charles Wagner, the con-
tractor, who is known here as local
politician whose side line is more
or less lucrative business in horse
manure.
Jersey City workers have a deep
and growing grievance. They have
had their wages cut from SIS to $40
per week, have been taken out from
under the transportation law, and
EARNED out" like so many cattle, to
an inexperienced contractor who is
permitted to pocket the money which
under the decisions of the Labor
Board should go to the workers.
First-class mechanics who are paid
so cents an hour by Wagner are
charged up to the Erie at 1926 cents
an hour. Wagner pockets the differ
ence. These mechanics were cut from
80 cents an hour.
Men who formerly got II cents an
hour are now getting $3.50 cents, but
Wagner charges the Erie 68.25 cents
for them. Third-class mechanics who
now get 55 cents are charged up to
the Erie at $3.50 cents. Helpers who
formerly got 81 cents are paid As
cents, and Wagner rents them out to
the Erie at 48.5 cents.
Wagner is being financed by the
Erie management. He has not one
penny invested. He has been in the
works only a few minutes in more
than a month. He knows less of the
workings of the shops than any mes
senger boy on the pay roll.
On the latest pay day the largest
check received by any worker was $51,
covering two weeks services. The
average was considerably less. The
men surely were glum when they
passed in review before the paying
clerks. 1t was then that Wagner put |
in his appearance and was greeted
with three lusty groans from his en-
nlnves. |