The Nonpartisan Leader Newspaper, June 9, 1919, Page 10

LR i The Rail Deficit Why Profits of Pennsylvania Road Fel Under U. S. Operation S Washington ‘Bureau, Nonpartisan Leader. EFORE the government took charge of the railroads one of the most profitable, and easily the most efficient, of the great railroad systems in the United States was the Pennsylvania. It was so efficient that in 10 years it not only paid $600,- 000,000 to its stockholders and bondholders, but it invested another $600,000,000 of the money it took from the public as freight and passenger charges in the business. More i than $350,000,000 of this money it now claims as i part of its “property investment account,” upon % which we, the public, are to pay the stockholders . a net minimum of 6 per cent annually forever. But when the railroad administration came along . things changed. The Pennsylvania system ceased . to be so efficient. It had been so efficient that the railroad administration left the management of the Pennsylvania in exactly the same hands that . had controlled it before the government stapped { in. On the other hand, the mahagements of many '+ of the other roads which had failed to show ef- ¢ ficiency were thrown out and new men given charge. 94 After a year of government operation the rail- ; roads showed a deficit of $231,000,000. it | railway ! of ‘trade unionism among its { employes, so it has been the e The Pennsylvania reported a deficit of $77,- ».000,000! Many of the formerly inefficient roads, with government-chosen managements, reported gencrous profits! : Just as the management of the Pennsylvania system in former years was the implacable foe bitterest foe of government operation, and in this first year of unwilling government oper- ation it has managed to run its own business with the worst degree of financial efficiency in comparison with its oppor- tunities of any railway man- agement in the history of the country. That story is the biggest story in Washington this spring, because it is the story behind the attempt to force upon the country the colossal | steal called “the return of the ! railways to their owners.” It ; is the story which the senate i and house of representatives of the United States will refuse to hear—refuse to understand when they do hear. But it is the story which the organized labor movement, the organized farmers’ and shippers’ associations, which sincerely want to solve the railway problem, are going to 7 hear and repeat until the lesson is hammered into |% legislative action. - Bt P e 2 e Glenn E. Plumb, chief counsel for the 2,000,000 railway workers, before the Open Forum of the National Popular Government league the other i day, made the lesson perfectly plain. “If congress fails this year to enact legislation to acquire the railways for the public, at a sound and just valuation,” he said, “then it is merely postponing the day when it must yield to the oper- ation of natural economic laws and do so. If con- gress passes any bill which will permit the Penn- sylvania railroad to draw tribute at 6 per cent, i from the ‘investment’ of money extorted by it from g i the people, that legislation will not have lasting ef- RALARRS o0 ; fect because natural economic laws will intervene. i “Railway rates are as high today as they can be i placed ‘without retarding the industry. Higher ! rates will increase the cost of commodities and will :4 lead to decreased earnings by the roads. “Our plan will finally prevail because all the conomic laws are operating in its favor, and be- ause 8,000,000 people in this country are. support- [ | ing its cornerstone, the just valuation of the rail- 1 ways. The railway workers, the organized farm- P i ers—notably the Nonpartisan league, our very good 8 H 4 i friend out West—and other organizations, have i learned, in spite of the silence of the press, that,we v One of the most beautiful and impbsing buildings in Wishington demand that the railway securities be made as - safe and sound as governmerit bonds, by “eliminat- ing from them all the water and all the ghosts of property investments that have been worn out and used up generations ago. “It is no more legal or just that we should con- tinue to pay interest on the cost of the three suc- cessive generations of property used up by the New York Central, for example, than it would be for the workers on the New York Central to insist that they draw wages for every man who has worked on that road since its first rail was laid. “A fair valuation would cut down the claimed valuation from $19,000,000,000 to less than $10,- 000,000,000. Guarantee even the 2% per cent of the securities held by widows and orphans, and the 156 per cent held by savings banks, and you will stili have only about $13,000,000,000 of valuation. “On that valuation the roads can be operated without a penny of increased rates, and if the profits above the interest charges are divided half and half between the workers in the industry and the government there will be developed such a degree of efficiency of management and operation as the world has never seen in any business enter- prise. : “The profits going to the railway employes.will make every man a partner in the business and anxious to add to the betterment of the service for - I CONGRESSIONAL LIBRARY l his own sake and the sake of his fellows. Profits going to the government would be used to improve the service without adding to the sum upon which interest must be earned. They would lead toward lower freight rates. Congress would provide by law that as soon as a certain amount of profits were shown rates should be reduced. The public would have its share in' the profits through better service, lower rates and a satisfied and efficient personnel ‘on the railroads.” The Plumb plan for government ownership and operation of the roads will soon be before the house and senate. Congress may pass a bill to please the patriots who created that $77,000,000 deficit on the Penn- sylvania lines last year, but congress can not make the people use the roads more, nor the employes demand less for their toil. SeE Finally, the railway workers ask that they have a voice in the control of the industry. They pro- pose that five directors for the nationalized railway system be chosen by the president, to represent the general public; that five directers be chosen by the 20,000 men who are responsible for the man- agement of the lines, all over the country, to rep- resent: the management; that five directors be elected by vote of the 2,000,000 wage-workers in the railroad ‘industry, to represent their interests. This board would direct the industry. Congress could provide against a combination between the directors representing management and wage-work- ers, by giving twice as great a profit-bonus to mem- bers: of the management as to the rank and file. —Copyright by Harris & Ewing. is the Congressional library, in which all congressional documents are kept. In this building also is kept a copy of every book copyrighted in the United States. Congress for Packers Plan of Federal Trade Commission Faces Speedy Burial s = TS Washington Bureau, Nonpartisan Leader. HIS new congress is for the big meat packers. It will not even permit the recommendations. of the federal trade-commission, calling for public ownership of the channels. of trade between the producer and the consumer of animal food products, to reach a rollcall. No bill which provides for public ownership: of stockyards or stock cars will be seriously consid- ered by either the house committee on interstate commerce or the senate committee on agriculture. The most that the organized producers and or- ganized consumers can hope for will be the adop- tion of a so-called license system whereby the de- partment of agriculture will have a moderate de- gree of control over the packers’ operations, and may compel the packers to get rid of their hold- ings in the stockyards companies. This last is merely a question of hiring a few dummies to act as stockholders. ‘ The above conclusions have been reached in na- tional conferences held here during the week just before the opening of the new session. The or- ganized livestock growers were represented, the organized farmers of more than a score of states in the East and West were represented, and there," were spokesmen present for various national or- ganizations of the consumers, including the Amer- ican Federation of Labor, the League of Women Voters and the National Consumers’ league. Sen- ators Norris, Kenyon, Ken- drick and Gore were present at different times. The senators were willing to back any measure which would “get anywhere” in the present congress, but they confessed frankly that neither the house nor senate seemed to be awake to the peril of a private mo- nopoly of the food supply of the American people, and that no legislation which contem- plated public ownership of stockyards would have a .chance. : “All the big .packers are busy lining up influential men among the livestock growers and the farmers, to talk and work for the packers,” was the concensus of reports from the West. “Millions of dollars are being spent in newspaper propaganda buying up public opinion everywhere, to prevent any action to reduce the power of the food monopoly.” One of the chief practical obstacles in the road to effective legislation is the fact that the rail- roads are still, theoretically, supposed to go back to private owners. The stockyards and stock cars, - the refrigeration and icing plants and cold storage warehouses are part of the transportation system and belong naturally under the railroad adminis. tration. Until congress has voted to purchase and operate the railroads, however, congress will refuse to buy the stockyards and other properties neces- sary in the marketing and distribution of meats, Senator Kendrick’s bill, approved by the senate committee on agriculture last March, will be taken up ‘again. This bill, drafted by Solicitor Williams of the department of agriculture, provides for the - separation of the packers from ownership of the vards within six years; also for federal licensing! of all concerns doing business in the stockyards. Organized labor and the organized housewives want congress to smash the food monopoly, bring: down the cost of meats and meat substitutes, stim-_ ulate the co-operative method of marketing -all foodsZ and bring about drastic reforms in the in- spection and packing of food products. of stockyards and terminal markets, they say, then: it is all the more necessary that that fact be shown to the whole country by forcing the issue in the - Senate and house—even if only half a dozen mem- - bers can be. got to speak for.it. 3 4(5‘:"’“.; Zf x pa If con- - gress is unwilling to consider public ownership: ;.‘"s_,‘ & AR PR