Evening star., 1925-11-08

have taken. To their liberal disposi-
| tion is, OF course, due a large meas
ure of credit for this series of set
| Elements. l believe the accomplish
ment thus effected marks a new
epoch in relations between the Gov
ernment and the carriers, an epoch in
which we will see constantly better
understanding and improved relation
| ships Because / strongly feel that
! you have contributed to making this
possible I extend my heartiest felici-
| tations."
L. S. Took Control in 1917.
The Federal Government took pos
session of the railroad systems of the
United States on December &c, 1917.
The properties 80 taken over as a war
measure. exclusive of S55 short lines,
comprised 532 separate properties, in
Guiding 25 coaStwise and inland steam
ship companies, the Pullman Co. car
lines, private car companies, floating
equipment used in rivers and harbors,
elevators and all other properties es-
sential to national operation of the
transportation system. Including main
line, passing tracks and terminal
there We're 366, ,197 900 miles of tracks,
2,40S. 600, ,51S freight cars, 5000 loco
motives and 55,939 passenger cars
taken over. The Interstate Commerce
Commission fixed tentative value OF
SIS. SOC, ,000, 900 for the whole property.
The compensation fixed for the use
of this property for the 20 months of
Government control was based upon
the actual net earnings of the car
riers for the three-year period prior
to Federal control. This was s2,0S7,
323, ,593, representing monthly rental
in excess of $S0,000,000.
hT Ia hy a
Government almost without notice,
owing to the exigenCies of war. There
was no time for a preliminary exam
ination or record Of the physical con-
dition of the property. No inventories
were taken. Conditions at the time
were abnormal. Labor was high and
in great demand. Materials necessary
for the proper standard of main
tenance We're not always at hand. The
ability of the country to carry on war
depended upon the efficiency Of the
railroad transportation. Under those
circumstances 1t was practically i'm
possible for the Government to give
the care and scrutiny of expenses Of
maintenance and operation which
might have been practiced under nor
NAL conditions.
Pledges Given Owners.
When the railroad properties We're
taken over by the Government Presi-
dent Wilson gave the owners two
assuranc which later were con-
irmed by Congress. The first was
that the property would he main
tanned during the period of Federal
control in as good repair and as COM
plete equipment as when taken over
by the Government. The second had
to do with the compensation for the
use of the property, setting up the
three-year test period already de-
scribed.
Based upon these assurances the
carriers at the conclusion of Federal
control prepared and filed claims
against the Government totaling
81 ,013. .3S9 ,502, consisting largely of de-
mandS for balance due on compenSa-
ton. for maintenance of way and
equipment, material and supplies and
depreciation. These claims before
final hearing were reduced by volun-
tary revision on the part Of the car
riers and payment on account by the
Government of compensation due, to
$3.50, ,106,521. The railroad administra-
ton on it's part set up claims against
the carriers aggregating $438, $780, ,Sl1.
These claims were the result largely
of n growing of excess expenditures
by the Government in the matter of
maintenance of way and equipment
during the period of Federal control.
as compared with similar expendi-
lures made by the carriers during the
three-year test period prior TO red
eral control.
Growing out of Federal control, the
railroad administration took definite
obligations of the railroads aggregat-
ing $629 ,241,250. OF this amount S494,-
954,250 has been collected either by
payment or sale, and the amount re-
turned to the Treasury In single
transaction the Government pur
chased and sold to the various car
riers 100 0,0O0,O 900 freight cars and 2,02o
locomotives. The entire cost of this
equipment was s380,O36, ,122. All of
this vast amount has been returned
to the Government except a small
balance of S1,253, 900. The roads,
with the exception Of one small
company, hopelessly insolvent, have
met every installment of principal
and interest on these equipment trust
notes.
Problems Perplexing
The question of material and sup
plies presented unusual and compli-
Gated problems. When the railroads
were taken over their books showed
that they had on hand material and
supplies Of every kind valued at
s532 ,528,S64, scattered all over hun
dreds of thousands of miles Of track.
No inventory was taken and 1t was
impossible to take an accurate and
satisfactory inventory at the end of
the period of Government control.
The adjustment Of this claim re
uuired a checking Of the amount on
hand, both at the beginning and the
end of Federal control. An approx
mate amount Of $780, 100000 was
fixed in this settlement.
A great forest, fire in Minnesota, al
legged to have been started by rail-
roads, promised to compltcate mat
ters for a time. The fire burned over
500 square miles Of territory. Clo-
quet, a town Of 10000 inhabitants,
was destroyed by the fire. More than
Is 900 law suits for claims aggregat-
ing s73,112,146 were instituted. Near
ly $4,000 Of these cases have been set
tied. The final cost of the Govern
ment growing out Of this fire will be
about $15,000,000.
10000 Acres May Be
SI Voko~orc -, IfoIu