The Washington times., 1925-01-20
j. s. RAILROAD
OPERATION
COSTLY
]. c. Davis, in Report, Says
} Taxpayers Have to. Put Up
$1,5oo,ooo, 900


Government into business ever at
tempted, Director General Of Rail
roads James c. Davis today re-
ported to President Coolidge that
Federal wartime operation of the
railroads had cost the American
taxpayer over 81 800, 200. 900.
The exact figure, as contained
In the final report Of the once
great transportation organization.
is $1,674, 800, 900.
This stupendous total represents
all losses-paid or estimated-in-
CURED during the twenty-six
months Of Federal control, and the
claims sustained for the six-month
guaranty period which followed.
Actual Operation Costly.
The bulk of the loss came in
actual operation costs. General
Davis divided his figures into three
groups, as follows: The loss during
Federal operation, $1,123, 500. 900; the
expenes of the guaranty period las
estimated by the Interstate Com
naerce Commissionl, $3.50. 600, 900, and
the amount required to reimburse
short lines under the transportation
act s{also estimated by the Inter-
state Commerce Commission, $1o,-
0Oo. 900.
Al remarkable adjustment Of the
postwar claim of the carriers
against the Government is shown
in the Davis report, however.
Entering counter claims against
the roads, the railroad adnainistra-
tiori,s ledger shows in the final an
alysis q loss to the Government on
that score of but $40 cola sum
slightly more than s per cent OF
what the railroads originally claimed.
Late in 1920 the roads began to
file claims for the balance alleged
to be due them for the use and
operation Of their equipment. coupled
with other claims for undermain.
tenance of equipment. The original
claims totaled 81 ,0i3, 1885, 500.
Subsequently, these claims were
revised downward to $76S. .003,f
and the Railroad Administration on
its own part entered counter-claims
OF $432. .130,311.
The final adjustment shows a
total Of $243.647,196 allowed the
creditor roads. and S195. 5.072.295 col
lected from the debtor roads. Sepa-
rate settlements with 371 systems.
many representing more than one
company, were necessary to effect
the liquidation.
'"The adjustment. was completed
without litigation declared Davis.
"It was concluded in about four
years, and 1t was made within the
appropriations originally granted by
Congress $500 900 .00e) for that pur-
pose"
In addition. Davis showed that
from now on the Railroad Admin
istration win be an income-produc-
ing asset rather than a liability.
including $491 .S14.473 of uuexpend-
ed appropriations and $174.6SS. 500
of definitive railroad obligations.
Life Not Yet Ended
The life of the. railroad Admin
istration is not quite ended. Claims
OF third persons, including some
1000 law suits, are yet to be
settled, but a greatly reduced over
head is in sight.
Statistics ordinarily drab and un-
interesting, in the case Of the Davis
report throw a dramatic spotlight
on the greatest of the United States
Governments wartime usine e s
ventures.
On December 81, 1917, President
Wilson with one stroke OF his pen
took over the entire transportation
system Of the United States.
Included were 532 separate rail.
road properties, twenty-five coast
wise and inland steamship lines,
the Pullman car lines, private car
companies, floating equipment
used in rivers and harbors. eleva-
tors, and all other properties essen
tial to national railroad oper-
alton.
Valued tentatively for rate
making purposes at $4,000, 900 900,
this great business enterprise in
cluded 366,197 miles of road;
2,40s.51s freight cars, 5000 loco
motives, and So, ,939 passenger
cars. Nearly 100000 people were
employed. and like number
owned stocks and bonds.
AS an indication of the diff
culties encountered in postwar
liquidation, General Davis COM
mented:
"The exigencies Of war required
the taking over of this system OF
transportation on the part of the
Government arbitrarily, and with
out notice. No preliminary exam
ination or record OF the physical
condition of the property at the
time it was taken over was made
and no inventories were taken.
No intelligent survey was at
tempted that might be the basis of
a future comparison as to the
condition Of this plant at the time
OF is taking and the time Of it's
return"