Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1923-09-19
MACEDONIAN MANAGEMENT OF
THE RAILROADS

is the letter written by William G.
jMcAdoo. former secretary of the
treasury and Federal railroad ad-
ministrator. to Senator Couzens Of
Michigan, in which he re-defends his
part in the war; time railroad ad-
mn;stration and re-arraigns the
railroad executives Of the United
States.
In his charges, Mr.. McAdoo init
mated that the executives of some
of the roads under him were not
loyal during the war. To this phase
of the letter the officials as whole
have taken the greatest exception.
He also charged that the railroads
were costing from II to % per cent.
more to operate now under private
control than they did when they
were under the Government, and
that the Government did not take
over the lines until the private own
ers had failed utterly In their efforts
to provide the war transportation.
The war time administration of
the railroads is now a matter of
history, but Mr.. McAdoo's letter has
doubtless revived some interest in
that phase Of the war problems. And
the reader with some knowledge of
the situation of the railroads during
the war may take exceptions to
some of Mr.. McAdoo's conclusions.
He may remember that under the
McAdoo regime and at time when
there was utmost need for conserva-
ton of labor, new wage scales were
put into force and new rules of en-
ployment adopted under which a far
g larger number of men were required
to do the same amount Of work and
wages per man and the total amount
of wages were increased without
any corresponding increase in ril-
road revenues.
Mr.. McAdoo says that the use of a
figure approaching two billions of
dollars as representing the Gov
ernment's loss by Federal control Of
the railroads is a part of program
of deliberate and malicious propa-
ganda. In reply, the railroad ex-
ecutives point out that these are not
their figures, but are figures deter
mined by the Government itself and
are part of the Governments rec
ords.
Has Mr.. McAdoo proved his case
for the Government control of rail-
roads? His statements are OBJ
viously incomplete in many respects
and by way of experimenting his
statistics and conclusions, the Com
mittee ON Public Relations of the
Eastern Railroads through its vice
chairman, Robert S. Binkerd. has
just authorized a statement. This
gives the other side Of the matter
answering effectively many of the
charges made by Mr.. McAdoo. and
should prove of as much general in
terest as the McAdoo letter itself. II
reads in part as follows:
. The Federal Administration did
Z right in using the railroads first OF
all as war agencies, and it cost
enormous sums of money. 1t was
> because the Government could use
the railroads as engines Of wal
(Which the railroads as common car
riers could not do), that made Gov
eminent operation in war time q
necessity. 1t was not that private
operation had been inefficient in time
OF peace.
Deficits were of course to be ex-
pected, but had the Federal Admin
Id, eoI
rates to meet the increased costs OF
operation its deficits could have
been much smaller.
1t followed, of course. that when
the roads were returned to private
control cost Of operation immediate
ly began to increase, for the rail-
roads were forced to give increases
in wages what the Government had
failed to give. They had to meet
higher wages paid in other indus
tries.
In July. 1920, railroad. wages were
increased on an average OF 20 per
cent and the award was made
= retroactive to March /, 1920, the day
that private control was resumed.
The peak of costs for material and
supplies was also reached in that
summer.
Mr.. McAdoo reflects upon the
wisdom of Congress in continuing.
for six months, to pay the railroads
the sums paid as rental during Fed
eral control, and refers to the pay
ments as subsidy" or a bonus"
Private owners had no recourse to
taxation, as the Government had to
make up losses, and Congress did
not care to assume the responsible
ity of leaving the railroads without
adequate income with certainty OF
wholesale disaster to tn, roads and
the commerce of the country.
The rental was continued only UNI
til new rates could be determined
and put into effect, and this action
of Congress was determined by
necessity, not by generosity. Had
the Government, during Federal con-
troll, increase rates to meet in
creased costs, there would have been
no need of the six months guaranty.
1t was in no sense q gift.
Every dollar of that money was
more than used up in meeting the
costs of paying higher wages, higher
taxes, higher prices for materials
and in restoring the roads to a con-
: dition permitting more efficient and
economical operation.
Let us consider briefly Mr.. Nc
Adoo's statement that the total an
d, nual cost of railroad operation since
Federal control haG increased from
II to % per cent The accuracy of
these figures need not he consid-
cred, for they mean nothing unless
me amount Of service rendered for