The times-news. [volume] (Hendersonville, N.C.) 1927-current, 1934-01-27
GOVERNMENT OWNERSHIP OF
RAILROADS

RAILROADS
The Charlotte Observer presents lntor-
nation on the subject Of government own
ership and operation of railroads IN the
following paragraphs:
Joseph B. Eastman, transportation co-ordinator
of the Washington administration, officially TO-
porting says:
Theoretically and logically, public ownership
and operation of railroads meets the known ills Of
the present situation better than any other rem
edy.'
Thus committing himself to the issue, both in
theory and in practice it is rather more informing
as we'll as vital to find in his report the suggestion
that when the time comes for the government to
exercise it's right in taking the transportation
agencies, neither theory nor practice will have any
thing to do with taking that step.
Instead. it will be done because, in his judg-
ment private enterprise and capital will be INSULT
cient for that task.
''The experience America has had along this
line is rather illuminating warning against
it.
"The government took over the transportation
systems of. the country during the war. The I'M
polling cause was heavy congestion of traffic, which
could not be remedied except by coordination.
The railroads had developed plan for co-ordinat-
ed handling of traffic, but the Attorney General
ruled that the plan violated the Federal antitrust
laws.
Federal control reGnquished on March l,
1920. During those 26 months, the government
guaranteed each road net annual return equal to
its average annual operating income in the three
fiscal years ending June 80, 1917 This was close
to the highest on record, because this period had
been exceptionally profitable to the roads. The
roads were also guaranteed the same rate of COM
pensation for the six months following Federal
control. ..-
During the 20 months, the railroad admlnstra-
ton had net operating income of $1,277 million,
but paid the roads as compensation S2,0S7, for a
net loss of $50 million The net loss during the
six-modnth guarantee period was S457 million and
other items brought the total cost of Federal trans
portation control to $1,671 million. Among those
other items. Were payments for depreciation, re-
placements, settlements because of differences in
pricesl on materials and supplies used, claims for
forestL fires ete., etc. All of the loss not as
eribaAe to the railroads, because water lines, ca
nails, and express also were represented.
During the war and afterwards the Federal
government levied taxes OF freight and passenger
transportation. These taxes brought in about 1855
million. If this sum be deducted from the loss
shown above, the net cost to the treasury would
be reduced to $716 million. However, these taxes
continued for some months after the end of the
six-month guarantee period"
Commenting on the foregoing, public at
tention should be seriously directed to the
fact that Mr.. Joseph B. Eastman believes
public ownership of the railroads will be
forced on the country because private en-
terprise and capital will be insufficient for
the task of maintaining railroad service.
Mr. Eastman believes public ownership
will provide the only way to meet and rem
edy the ills of the present situation.
In other words, what Mr.. Eastman is
saying is that the railroads cannot operate
profitably under existing conditions and
must be taken over by the government in
order that the tax payers may furnish the
money to keep the railroads going. That
statement could as truthfully be made in
regard to other lines of business. A num-
Der of lines of business could be mentioned
which are losing money and for which the
outlook appears to be hopeless. No doubt
the only way to keep them going is to have
the government take them over and levy
the losses of operations on the country's
tax payers.
No Kesn with brains and ability enough