Evening journal., 1923-02-05
WAR R. R. COST
! sI,S0O,0OO,OOO
Director-General Davis Re
ports on Expense of Fed
eral Control
PART. OF MONEY
is TO BE RETURNED

WASHINGTON, Feb. 5.-Losses
sustained by the Government from
Wartime operation of railroads and
its aftermath of earnings guaran-
tees and damage settlements will to-
sal approximately $500, 100000. ac-
,ording 10 a report by James c,
Davis. Director General of Rail-
roads. transmitted to Congress by
President Harding.
Not only does the amount come
within Congressional appropriations
already made, but there will also
be return to the Treasury Of about
s4o0. 900, 600 in cash and railroad se-
curities
Mr.. Davis estimates are based on
the showing actually made in liqui-
iiation OF accounts between the Gov
crnment and corporate owners Of so
ror cent of the railroad mileage
which the Government took over.
Most Of the settlements to be made
arc expected to result in payment
to ;he Government OF either cash or
securities
Accounting in connection with
tho Government operation has gone
through three phases and involves
the Interstate Commerce Commis-
Son as well as the Railroad Ad-
rninistration. Losses in direct op-
grafton Of the roads and in the later
settlement of capital investment
and other claims. as now practically
completed by Director General Da-
us. are shown to reach a total OF
Sl.250.0OO.OOO
To this is added between s525,
600. 900 and 5000. 100000, which has
or viii be paid by the commission
to short-line railroads and to Glass
carriers This last amount in
ciudes payment under the guaran-
toe given the roads by Congress OF
earnings during the six months of
1920 just after the Government re-
linquished the properties.
A remarkable scaling down IN
claims originally made by the roads
against the Government is shown by
Mr. Davis report. which marks the
beginning Of the end OF the entire
venture.
To date the roads have demanded
1852. 642. .O6S on grounds OF under
maintenance. damages. loss OF in
ventory and for other reasons. Up
10 December 81 final adjustment
had been made with corporations
which sought S731.921,S14 of that |
total. the Government having paid /
out net amount OF only s171.S15,- /
Sal
Mr. Davis expects the balance of |
unadjus,ed claims. amounting to
s22O.720.253. to be closed out by !
October. without any additional ex-
penditure.
Although much litigation was
feared only one road has so far
taken the Director Generals deci- |
sion into court, it was added. One
factor pointed out by Mr.. Davis as
facilitating the settlements has been
The ability OF the Railroad Admin
istration to pay cash TO carriers will
ing to accept an award. Govern
ment funds for these operations in |
part were derived from sale OF
trust securities amount
Ing TO s274. 100000 which were left
on the Director. Generals hands ar
er the period Of operation. but sub, I
sequently became desirable 10 pri-
rate investors.
II believe It may be confidently
'redicted." Mr.. Davis report stated.
that there win be not to exceed
4 half-dozen carriers unable to
agree with the Government in ar
riving at final adjustment and there
may not be that number.
From the financial showing Il Is
quite evident that no further ap-
Preparations will be required to
complete this liquidation In every
and # may be anticipated
with some confidence that after all
liza bilties of the Government OF
nature arising out OF
Federal control have been liquldat-
ed. the Railroad Administration can {
return TO the Treasury in collect |
able obligations of solvent compan- !
les and unexpended appropriations |
an amount aggregating about s4OO- |
600. 900"
Maintenance OF the Railroad Ad- /
M nistration organization. which has
checked the railroad claims and ac-
countings in the settlements, cost
the Government last year In pay
roll expenditures s3.11O,OOO. Mr.. |
Davis remarked. but has resulted in
the savings of many hundreds of
millions of dollars to the Govern
nent.
The number OF its employees, he
added. can now be rapidly reduced.