, 1923-01-24
Government Control Cost

although on March l It will be
three years since the railways were
returned to private operation" says
the Railway Age. at is still impos-
sible to say how much government
control Of railroads will finally cost
the taxpayers of the United States.
but statistics now available show that
the total will be approximately ST.
700, 900, 900. The recent annual re-
port of the Interstate Commerce Com.
mission gives information regarding
This matter that has attracted less at
tention than it deserves.
when Walker D. Hines retired as
Encouragement of railroads In 1920 ne
estimated the total deficit which had
been incurred during tho rs months
of actual government operation at
5000. AIS, 756. Mr.. Hines estimate was
based upon the assumption that the
railways would not be able to sub
stantiate their claims for largo in
IDENTITIES because OF failure Of the
government adequately to maintain
their properties. The railways. how
ever, have been able &c present such
conclusive evidence OF under mainte-
nance that the Railroad AdminIstra.
ton n allowed claims upon this
ground amounting to SIPS. 42S $40 and
officially estimates that additional
claims that will have to be allowed
will amoun to $97,167, 664. The Inter
state Commerce Commission estimates
that it viii have to allow claims Of
the short line railroads for deficits
incurred in the first six onths of gov
eminent control which will d $751;
OOO. 900 to the foregoing
The expenses incurred by the Rail
road Administration from March l.
1920, to January /, 1929. in collect
ing the data and carrying on the nego-
tiations incidental to %effecting settle
ment of the accounts OF the govern.
ment with the railways arising from
government operation, amounted to
.$3,445,222. These items total $1,141.-
52O,452 as the deficit actually Charge
able to government operation during
the 26 months ending March, 1920.
When the railways were returned
to private operation they were in.
curling deficits at a higher rate than
ever before because of failure of the
Railroad Administration to make suf.
flcient advances in rates to cover the
Increased expenses. In addition, de-
mands OF the employees were pending
for largo advances in wages which
subsequently, were granted by the
Railroad Labor Board. Therefore the
government continued the guarantees
for a period OF six months. The Inter.
state Commerce Commission in It's
recent annual report estimated at
S536. 900. 900 the amount that the gov
eminent will have to pay the railway
companies to reimburse them for the
deficits incurred during these six
months. We arrive then at the fol.
lowing result:
Deficit due to 20 months
Of government opera
IOn 40. b
Deficit under guarantees
for first six months
under private operation $4,000, 900
Total denclt due to
government control I'll, 677 1870. Asa
when all the settlements are final
ly made with the railway companies
the total deficits incurred as a result
of the government having taken over
the railroads and which the taxpayers
viii have had TO pay probably Will
be even larger han this. The aver
age for the 20 months OF actual gov
eminent operation will be about s44,.
900 900 n month and the average Tor
NEa aHNNEa DO aA- a