, 1923-02-08
His DUN Words Plague Him.

THE McAdoo boom for the Democratic nomina.
L ton for the presidency in 1924 is well under
way. The progress it makes depends upon many
things. Its worst handicap is the record of fool
ish things which Mr.. McAdoo, himself, has said
at times-statements which will live to plague
him because they brand him either as an unthink-
ing man who gives vent to irresponsible sta tcments
or an out-and-out dema gogue who purposely makes
statements in order to play up to popular preju.
dice.
One of these misstatements, which is typical of
others was made in a speech at Council Bluffs,
Iowa, October %, 1922, when, according to reports
of the news associations, Mr.. McAdoo stated "The
Esch-Cumminsa act is forcing the public to pay . IL
per cent net on valuation of all railroads. That
statement is false. 1t has not the slightest foun.
dation. The truth. of the situation is as follows:
The E~sch-Cumminsa act, also known as the Trans.
portation act, provided for the return of railroads
to private operation following their operation by
the McAdoo Railroad Administration. This act
provided that the transfer from public to private
operation should take effect March 1, 1920. The
act provided further that in order that the rail
roads might get on their feet after twenty-six
months of mismanagement of the McAdoo admin
~istration, they should be given a guaranteed income
for six months from March !, 1920. This guarm1-
tee should be equivalent to earnings of D IL per
cent upon the valuation of railroad properties.
Under the provisions of the Esch- Cummins act it.
self, this guarantee stopped September 1, 1920.
Since that date there has been no guarantee by the
government of the income of any railroad. Since
that time the government has not paid to any rail
road one penny in the form of any guarantee. The
proof that the railroads have not been guaranteed
any income by the government and have not been
paid anything by the government since September
!, 1920, is furnished by the records of the Interstate
COmmerce Commission.
These records show from September 1, 1920 to
August 81, 1921, the railroads earned n net operat-
ing income of $523y59S,172 which was equivalent
to PSI per cent of their valuation. This is all the
income the railroads had. This figure covers all
railroads in the United States. Some of the roads
did not have any net income but faced a deficit as
the result of a years operation from September ! |,
1920, to August 81, 1921.
During the second year of their operation under
the Esch-Cummins act-September 1, 1921, to Au-
gust 81, 1922-the net operating income of all rail
roads was $7S1,G73,377. This was equivalent to Al
per cent of their valuation. Again this income
was all the income they received. The government
did not add one penny to their income either year
in order to make up the difference between what
they earned and what they would have earned had
their earnings been 5 IL per cent on their valua-
ton. Again, during this second year, some roads
did not earn any net income.
The latest data upon this matter is that fur
nished by the records of the Interstate Commerce
commission for the month of November, 1922, and
for the first eleven months of the calendar year
1922. This data shows that the railroads during
the first eleven months of 1922 earned a net operat.
ing income OF 400 per cent of their valuation or
$693 ,134, 700. During the first eleven months of the
year 1922 the roads of the eastern district had n
net operating income which was the equivalent of
4.51 per cent on their valuation. During the first
eleven month of 1922, the roads of the southern dis.
trict had a net operating income of 492 per cent of
their valuation. During this period the roads of
the western district had n net operating income of
Al per cent of their net valuation. During the
month of November, thirty-four railroads had OPP
Grating deficits, of which sixteen were in the east
ern district, three in the southern, and fifteen in
the western.