freights. On both of these inland waterways the Government now controls transportation. What then will be the consequence of divesting itself of the control and operation of the railroads? How can it hope to reconcile a public competitive waterway policy, with a private gainful policy of operating the railroads? The Government fleets will be expanded, private boat owners will claim the advantages accorded the Government boats, and the coast-wise traffic will develop a similar conflict of interests, and the clashing of these interests will be disastrous for all, if the Government shall separate the administration of the waterways from that of the railways. It will be to the interest of American seaports to establish a short-haul movement from the point of origin to the nearest water route leading to such ports whether it be an inland waterway route or a coastal route. No universal rule can here be applied other than to say that instead of giving preference as heretofore to the long rail haul, wherever economies can be shown, a combined rail and water service to the seaport should be made possible. For instance, southern cotton, coal, lumber and other coarse freights should more generally be forwarded to the New England mill district via a rail haul to the coast and thence, by water to the New England factories which are for the most part located within motor truck distances from tidewater. Through its control of the eastbound grain business at Buffalo, the Government is now in control of traffic on the Erie canal, because the east bound grain movement is the dominating factor in canal policy. The United States Railway Administration controls this New York State waterway by this means, just as effectively as it controls the traffic through the Panama canal. The automatic influence which the Erie canal formerly exercised over railroad freight rates is consequently now vested in the United States. The Government has in this matter assumed a heavy responsibility which will be greatly complicated if the railroads even temporarily go back to private operation. Is it probable that the public opinion of the country will tolerate a discontinuance of highway, waterway, railway and seaport terminal integration in order to conserve the profits of an outgrown, non-competitive private system of rail transportation? The economic movement of food, fuel, and raw materials to and from our growing municipal centers and the conduct of our exports to the sea in competition with foreign rivals is opposed to such a policy. The prospective separation of terminal charges from the line haul in order to conserve badly needed railroad revenues and to stimulate local enterprise in modernizing terminals, is in conflict with such a policy. The best use of our waterways and their progressive utilization to avoid the otherwise heavy expense of additional railroad construction necessary to meet the expanding needs of the country's commerce, is out of line with such a policy, as is the declared unwillingness of railroad operatives to live and work in peaceful cooperation under private ownership. "Private Operation" a Myth The average stockholder is more careless of his vote than is the average citizen. There never has been a stockholders' management in the popular, democratic sense. What we have heretofore had through proxy representation, has been in the first instance control by speculative promoters for development purposes followed later by exploitive bankers' control. What the country now needs and is preparing to get, is technical control exercised through actual management and modified by popular opinion as expressed through Government representation. Since the departure of the great competitive organizing owners, the roads have been run, are being run, and will continue to be run, by expert operatives, from the track boss up through the engineering and accounting staffs to the President of the road and the Director General; and the sooner this fact shall be recognized by the Government, the public and by security owners, the better for all concerned. The quality now most needed to bring about efficient operation, is esprit de corps in an operation staff composed of representatives of the Government, representatives of the official and classified services and representatives of the owners until these latter shall have been expropriated. Such a staff will in time generate efficiency-not indeed equal to that which existed before competition ended, nor as bad as politics alone can otherwise make it. Efficient service rendered to the public, not for bonuses and tips, as has been proposed, but for just wages and salaries, in a distinguished and honorable public service is what the operatives and the country require and may ultimately expect from the staff. Absolute safety founded on a just basis of values is what the security owner most needs-in other words, a Government bond -and if he delays much longer to press for this, in the hope of securing the elusive chance of speculative profits, based on politically delegated control over rate making, he is likely to miss. his market. Director General McAdoo's recommendation that Government control shall be extended over a period of five years-carrying with it the tacit implication of perpetuity-is still the commonsense indication of the way out. By temporizing, and by camouflaging novel facts at variance with American experience, it soothes susceptibilities, and affords the needed opportunity for gradually bringing about a change in our institutions which otherwise would be regarded as revolutionary. Within the five-year period a national policy can be worked out, fair to all interests, and which will prevent the otherwise inevitable exploitation of owners, operatives and the public. The country may not, however, proceed directly or indirectly to nationalize its railway system. As a resultant of the influences at work, this may finally be accomplished through a series of transmigrations camouflaged as quasi-private ownership schemes, such as those now pending in Congress. Organization of this kind will, however, tend to make Government control more complex and burdensome in deference to a public opinion which will resent any Government assurance of private profit. Coincidently, organized labor will not function harmoniously under any semblance even, of private operation, and rates for service will fluctuate with changing political conditions. The weak points of private and public operation will be accentuated and the advantages minimized by all such attempts at mixed control and divided responsibility. During such an interregnum developing experience will continue to point the way to the one inevitable conclusion-viz., complete Government ownership, operation and responsibility. (In this article I have not referred to the influence of inflation of Government credit upon railroading. This is a most disturbing factor as it is in every branch of commerce and industry, but its principal consequence is to accentuate and make more exigent conditions which would otherwise have worked out the same results more slowly). APPENDIX REPORT OF THE ANNUAL MEETING COMMITTEE The Committee planned for the Annual Meeting of the Academy (39th Year) a two-day national conference on the subject of Railroad Legislation. The conference was held on Friday and Saturday, November 21-22, and consisted of four sessions and a dinner meeting, with the following sub-topics: 1. The Railroads and the Shipper. 2. The Railroads and the Investor. 3. Railroad Legislation (the dinner meeting). 5. The Railroads and the Public. The aim of the Committee was to focus attention, as far as possible, upon the two pending Congressional proposals for railroad legislation, namely, the House and the Senate Committee bills, and the problems of railroad legislation connected directly with those two proposals. With the first edition of the program of the conference there was sent to every member of the Academy and to those invited to attend the conference a copy of a chart prepared by Mr. Richard Waterman for the United States Chamber of Commerce Committee on Railroad Legislation, giving a summary of the seven different plans for railroad legislation which had been submitted to Congress. At the conference itself Mr. Waterman presented a digest, in parallel columns, of the two Congressional Committee proposals. Naturally many aspects of the general problems of railroad legislation not directly involved in the two Congressional proposals came in for their share of discussion by the speakers on the program. This is particularly true of the general discussion of governmental ownership and operation. Dr. Albert Shaw, Vice-President of the Academy, who had expected to preside at the opening session, was unfortunately prevented from being present, and Professor T. W. Van Metre, of Columbia University, very kindly took his place. Professor Van Metre also gave the sub-committee on program very valuable expert assistance and has kindly consented to edit the volume of Proceedings in which the papers and report of the discussion at this meeting will be published. Professor Thomas Reed Powell, of Columbia University, presided at the second session. Mr. Thomas W. Lamont, VicePresident of the Academy, presided at the dinner meeting, at the beginning of which Professor Lindsay, President of the Academy, made a brief general statement concerning the program of the conference. Professor Henry R. Seager presided at the third session and Professor E. R. A. Seligman presided at the fourth and closing session. At the dinner meeting, in addition to the speakers on Railroad Legislation, the following gentlemen were invited to be guests of honor: The Right Hon. Viscount Edward Grey, British Ambassador to the United States. Representatives from the delegates to the International Trade M. Eugene Schneider, Chairman of the French Economic Sir Arthur Shirley Benn, M.P., Chairman of the British Commander Engineer Ferdinando Quartieri, Chairman of the Italian delegation. M. Florimond Hankar, Chairman of the Belgian delega- Commander Giorgio Mylius, President of the Italian M. Eugene Loizeau, Engineer, assistant to the Director of Edward A. Filene, Boston, Chairman of the United States Chamber of Commerce Committee to the International Trade Conference. Representative delegates to the International Labor Confer ence: Professor Ernest Mahaim, Belgium. M. Arthur Fontaine, France. The Right Hon. G. M. Barnes, M.P., Great Britain. Mgr. Dr. W. H. Nolens, Holland. Baron Mayor des Planches, Italy. Professor Adelfor G. Posada, Spain. Dr. Nicholas Murray Butler, President of Columbia Univer sity. |