Evening star., 1925-11-08


The Treasury Department, under an
other section of the transportation
act, holds paper of the roads aggregat-
ing S1S4, ,000. .000, resulting from loans
made by the Government To the ROADS
under section 2lO of the law. II Is
deemed entirely proper that the nnai
disposition of these Obligations OF the
railroads to the Government shah De
handled by one department-the Treas
ury.
Drops From Public Eye.
During the period Of Government
operation of the railroads-the war
period and until February ~
l92O-the Railroad Administration was
very much in the public eye. But
since the return of the roads 10 prl-
vate operation this Government
agency has attracted comparatively
little attention. Notwithstanding tne
fact that 1t was faced with a really
Stupendous task. task Whch IN
many quarters il was declared could
not be accomplished for many years,
and with every prospect of innumer-
able suits in the courts of law. IN
deed. the liquidation of the claims,
totaling more than a billion dollars,
growing out of the Government op-
Grafton of the railroads, has been one
of the greatest of the Government
postwar activities.
Mr.. Davis, a widely known Iowa
attorney, was appointed directer gen
eral Of the Railroad Administration
by the late President Harding March
IS, 1921, succeeding John Barton
Payne in that office. Mr.. Davis had
been general counsel of the Railroad
Administration prior to his appoint
ment as director general and was
thoroughly familiar with the work OF
the administration. 1t is understood
that he will return to his law practice
in Des Moines. Iowa. when he re
linquishes the Office he has held for
nearly four years.
With the demise of the Railroad
Administration. except for the few
minor matters which will remain to be
settled through the Treasury Depart
ment. the Federal Government 5 great
adventure in railroading Will have
come to an end. The cost to the Gov
crnment of its operation of the roads,
plus the added cost of the slN-month
guaranty clause in the transportation
act handing the roads back to their
private owners. was in round hgureS
81 ,696, 900 900. The cost of operating
the roads during Government control
IS placed at 81 145, 100000. This is the
excess of expenditures over the rev
enle received. and was due to TWO
factors, first the failure of the Gov
ernment TO increase freight rates to
keep UP with the increased cost OF
operation. and second, the increases al
lowed labor. The other $50 900 900 of
cost to the Government was the result
of the month guaranty period IN
which the Government agreed TO see
that the railroads receive e same IN
come as during the period of Federal
control. The understanding was that
during this six months the rates
would be rcadjuSted by the Interstate
Commerce Commission in such a way
that the roads would be able to earn
fair return on their investment. In
cluded also are s15.000,000 paid to the
short-line railroads to make UP deficits.
Final Figures Small.
When the final report of the rail-
road administration is submitted 1t
will be found that the cost of liqui-
dation to the Government, eXclu-
Sive of overhead. has been only
H4S.574901, something less than
rer cent of the face value of the
claims originally presented. When
this big job was first tackled the
prediction was made that the liqui-
iation cost to the Government would
he at least $f50,000,000 and might
run AS high as s500,OOO,OO0.
President Coolidge and his prede-
cessor, President Harding, gave Mr..
Davis n free hand in making the
settlement of these claims. Red tape
was cast aside and it is said to be
duo largely to this fact that the
work has progressed so rapidly and
so satisfactorily. Under other cir
cumstances it might have required
% years, with much costly ltga-
Ion, to obtain the results now
achieved. The settlements involved
many intricate and complicated
questions Of law and fact. They
have been settled without litigation
n many cases. Separate adjustments
have been made in 81 cases in
which creditor roads We're paid an
aggregate of $243,647, 1876, with col
Iections from debtor roads of $780,
n72.295 Mr.. Davis attributes the
comparative ease with which the ad-
justments have been made to the
fact that he has been permitted to
choose a staff and to deal directly
and without interference with the
roads, matching their experts with
his own.
Coolidge Lauds Davis.
Mr.. Davis has received from Pres
ideut Coolidge a letter of appreci-
alton which reads, in part, as fol-
lows:
II am informed, and believe, that
the task OF examining, determining
and liquidating the enormous mass
of claims that have grown out of
the war time relations between the
Government and the railroads was
probably the greatest of its sort In
the experience of this country, per-
haps of the world. 1 recall that 1t
was almost universally prophesied
that this work would not be per-
formed without developing maze
of controversy and litigation, expen-
sive to all parties and likely to post
pone final settlement for many years.
Under your direction. all these I'M
comfortable anticipations have been
dissipated, and you now approach the
completion of your task with the re-
markable record of having made
these settlements practically with
cut any resort to litigation.
so remarkable a showing entities
YOU to the heartiest congratulations,
and. in extending them to you, must
add word of recognition for the at
titude which the railroad executives