The Delta independent. [volume] (Delta, Colo.) 1886-19??, 1924-03-07
LloUlDATlNG FEDERAL
CONTROL OF RAILROADS
CBy Edward Nelson Dihglev>

Wy iNh" al u DlHSleYJ
Washington, d. Cone of the most
unique and remarkable achievements
of the present administration through
Director-General of the Railroad Ad-
istration James c. Davis, is the lio-
uidation of Federal control of railroads
and other carriers, just about complet.
ed December 31st last
By proclamation of President Will
son early in January, 1918. and by
act of Congress two months later, the
Federal government took over the op-
Grafton of 219 carriers, representing
366,197 miles of track
This was a war emergency, justified
only on the ground of war. From
March, 1918, to December, 1923, Con-
gress appropriated s1.79O,OOO, 900 for
the operation of the railroads and the
other carriers and for the winding up
of government operation.
Federal control continued until
March l, 1920, twenty-six months, and
cost 1885, 900, 900.
When the Federal government took
over the carriers they were making a
profit Of about 5000 900. 900. When they
were turned back to their owners.
most of them were bankrupt.
The transportation act OF 1920 (com-
monty known as the Esch Cummins
act) provided % that the rates for
transportation established by the In
terstate Commerce Commission should
be sufficient to give the roads 5lh per
cent on their fair valuations. or this
rate to continue six months after the
termination of Federal control, C3)
provision made for a liquidation of
claims, disputes and all matters aris-
ing out Of Federal control The 5lz
per cent is not, as often understood.
a guarantee by the government. It
was only a guide by which the Inter
state Commerce Commission regulat-
ed rates, on the theory that the car
riers were entitled to a fair return
for the use of their property.
This socalled guaranty" was con-
tinued six months after surrender of
the roads because one-half OF them
would have been bankrupt without
government taid.
The 51z per cent was not a guar
anty and the government did not
pay the roads this amount in case
they did not earn 81 per cent; and
few did until long after Federal con-
troll. There was and is no guaranty.
The 2ls carriers taken over by the
Federal government in 1918 filed
claims against the government which
amounted to s1,014 .397.441, based on
compensation, materials and sup
plies, depreciation and maintenance.
The Railroad Administration having
the litigation, had the claims to be
adjusted reduced to s769,974.7s3.
January. 1924. more than 1853 .1O6.-
521 OF these claims were finally ad-
justed, leaving the unsettled claims
only minor matters. The net cost to
the government in the final settle
ment was only s49.ss2,73S
The Railroad Administration. in
four years without any fuss or feath-
ers, has settled these large claims
with assets amounting to s645. 161. 1855.
M ~ Neoh vi bbOu an pdu SttuI tues
bonds and notes, properly and amply
secured.
January 1, 1924, the Railroad Ad-
ministration for the first time was
a self-sustaining and solvent asset
instead OF a liability OF the United
States and the people thereof
This is an unique and remarkable
achievement; nothing like It in the
railroad history OF any country. It
marks the end, practically. OF federal
control OF railroads and it's afte~
math, and is another memorable
achievement OF this Harding Coolidge
administration.