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About The commoner. (Lincoln, Neb.) 1901-1923 | View Entire Issue (Jan. 1, 1919)
The Commoner JANUARY, 1919 48 Dual Ownership of Railroads ! Mr. Bryan. Outlines Plan The railroad problem Is by far the largest of the reconstruction problems now confronting the nation. It represents an enormous capitalization; it reaches into every part of the country; the number of its employes amounts to nearly one tenth of the male voting population of the country. It is interwoven with banking and other, in dustries; the men who are in control of the rail roads are influential in business and often active In politics; directly or indirectly, it brings pres sure to bear upon a large number of persons who are actually on its pay roll. To understand the subject it is necessary to know not only the railroads as they are, but also the railroads as they are planned. The more important roads were taken over by the gov ernment as a war measure, but the act which authorized this limited the control to a period of twenty-one months after the conclusion of peace, so'thatf affirmative action is necessary in order to continue government operation. Director General McAdoo has suggested that the period of control be extended until the first of January, 1924, in order that government operation may be tested more fully and nnder normal condi tions. But this proposition, as might have been expected, has aroused a prompt protest from those who represent the controlling railroad Interests. I need not discuss Mr. McAdoo's proposal therefore, because It is not likely to be accept able to either side. The railroad magnates, knowing the pecuniary value of private ownership to those in control, will not consent to delay, and the friends of government ownership will see little advantage in a test made under the direction bf those who personally favor private ownership. If govern ment ownership is to have a fair test, the test must be made by -those who believe in it and want it to succeed; and even then it would have to meet an opposition from railroad interests which will disappear after government owner ship becomes the settled policy of the country. The situation divides itself into four proposi tions. I. A return to private ownership as it was be fore the government assumed control. This is improbable. The railroads are opposed to. it, the President has announced his opposition to it, and the advocates of government ownership are, of course, opposed to it. It may therefore be dismissed for the present. Its consideration is only possible as a compromise in case no other Plan can secure the support of a majority. Weak as it is, it has the strength inherent in an exist ing system before any proposed change secures the cupport of a majority. II. WHAT RAIROAD DIRECTORS WANT The plan supported by the railroads contem plates a return to private ownership under a so-called unified system of control, with the iederal government exercising exclusive super Vision over all railroad traffic, intra-state as well as inter-state. The railroads have for years had Jius change in view. In 1916 they secured the incorporation in the republican national plat form of the following plank: Inter-state and intra-state transportation has Decome so interwoven that the attempt to apply iwo, and often several, sets of laws to' its regular uon lias produced conflicts of authority, embar rassment in operation and inconvenience and ex BVBtl Ale Public. The entire transportation tinnn?1 Six0 country as become essentially na latinil" t ther-efore favor such action by legis to iha0T' "necessary, through an amendment rL,if iConstIt,utlon of tlle United States as will Til a placinS under federal control." Jen! n?mcratic party was sileQt upon the sub ihaRi, fUe, natinal committee did not em eleetinn Vi l88ue in the campaign. After the lay . 1 railroads immediately proceeded to of ennti i t?8 for securng this centralization com",!r Hearings were begun before a joint VeS whiat,Waonlngton' and thQ ra"road law canitoi nr. 00ea after railroad interests at the of th Pe801tod elaborate arguments in support the war wl C.?ntro1 plan 0ur nation entered the nnnu . the hearings were completed, and 6 actlvties of the railroads in this direction were suspended, but the demand now mado by the railroads for return to private ownorshin includes this change. The situation was bad enough when super vision was divided between the fedoral govern ment and the several states; It was hard enough to secure effective regulation or fairness in rates when the people spoke through representatives who lived near them and assombled at tho several state capitals. No one acquainted with politics during tho last twenty-five years can have forgotten tho reign of corruption. Tho free railroad pass was one of the means employed until it was eliminated by both state and national legislation. Investiga tions have shown upon what a gigantic scale corruption was organized. Newspapers owned by tho railroads were conducted by -individuals who represented themselves as the real proprietors. Political economists holding positions as in structors in universities, were on tho payroll of tho railroads and were used to deceive tho public, and politicians were controlled through secret retainers. The railroad influence was rampant at Washington and completely domin ated many states. If it was a scandal under tho old systom, what may wo expect if all authority is centralized at Washington and the railroads are given so largo a stake in the election of a president, senators and congressmen? The President appoints tho inter-state com merce commission; it would mean hundreds of millions a year to the railroad managers to have the commission filled with their friends. 1 They have sometimes attempted to name these ap pointees', even when the federal government con trolled only inter-state rates. How much more arrogant they will be if all power is exercised by the federal government. Senatorial contests Will become much more exciting when the rail roads pit their candidates, secretly controlled, against a candidate whom they cannot bribe. And what will be the fate of the man who sues the railroad? His lot is hard onough now. It will be worse then, when to tho delays which are now excessive Is added tho distance, which will amount to denial of rights. III. ; NOT PREPARED FOR FEDERAL OWNERSHIP The third proposition Is the nationalization of all railroads. If the people must choose between private ownership, on the one hand, with all the evils inherent in the private monopoly and all the dangers involved in a system of corruption nation-wide and the injustice which would bo involved in private ownership under federal, not state, supervision, and on the other hand direct government ownership, they will, when informed, choose the federal ownership. But I think that they are hardly prepared to make that choice now. In the first place, they will be appalled by the new indebtedness which would have to bo Incurred. With a bonded debt of sixteen billions and a half, which, we are in formed, may rise to twenty-five billions beforo the armies are demobilized and the war bills have been paid, the people will hardly be willing to add twenty billions more in order to pay for the railroads. " - Then, too, they will be frightened by the mag nitude of the bureau necessary for federal opera tion a bureau with a corps of employes almost as numerous as those now necessary for tho management of the business of tho federal gov ernment. They will be alarmed, also, by the possibility of a partisan use being made of such a large force of government employes. All of these objections could, in time, be answered. For instance, the interest upon tho debt contracted to buy the railroads would not be as heavy a fixed charge as theilnterest and dividends now paid oh railroad capitalization, and it must bo remembered that present capital ization represents considerable more than actual Second, the employes needed for government operation would not be as numerous as those now necessary for private operation, because consolidation would eliminate much duplication in this force. ' Third, the government could not control ofli cials to the same extent that the railroads have botttnablo to coorco their omployog, bccaus.6, th government would have to aot onofily, whtjto'fliU railroads liavo bdon able to act sqortiy . Then, too, tho govornmont'8 poWer to'UBO era ployoB is offset by tho activity of Utoao who fall to secure appointment no mean facttfr in tlic problem and it is possible, by means of im provements In tho civil service, to reduce to minimum tho partisan use that can bo made o( employes engagod in tho public service. But, while the arguments against tho national' Izatlon of tho railroads can bo answorod in time, it Is not likely that tho voters can properly In form thomsolves and reach settled conclusion! boforo foderal operation of tho railroads expire by limitations In tho law. Tho men interested In tho return of the rail roads to private ownership aro organized and on tho alert; they aro largoly In control of the avenues of information, and at tho drat on-! slaught will probably bo able to overwhelm the advooates of nationalization. IV. A NEW PLAN SUGGESTED Tho fourth plan Is, to my mind, tho one mos( easily prosontod and dofondod, namoly, a dual' plan In which tho federal govorment will owrf and operato, not the cntlro railroad systom ol the country, but only a trunk line system sufll clont to give every stato on outlet for its pro, ducts and an Inlet for its purchases. Such a system would effectively regulate Intor state commerce, and yet would cost but a small sum compared with tho nationalization of all railroads. ' Such a system would also moot tho objection? mado to tho establishment of a gigantic bureau at Washington, and tho objections based upon the fear of centralization a real fear in sup. port of which many illustrations can bo drawn from history. The government can easily ontcj upon this partial nationalization by tho appoint ment of a committee to investigate tho advls ability and cost of such a system, and tho report can bo mado after investigation and acted upon before the time set for tho return of tho rail roads to private ownership. Tho dual plan contemplates not only a trunlf lino system owned and operated by the federal government but tho ownership and operation of tho local network of roads by the several states, Tho government could, for Instance, take over one first-class trunk lino between the Atlantic seaboard and the Great Lakes at Chicago; another to tho Mississippi Valley at St. Louis; another to the Middlo West, and lines to the North, South and Central Pacific coast; also North and South lines, and so on. This nationalized system ongaged in interstate! commerce would traverse all tho states. It would compete with privately or state owned railroads In service and in economy of operation, not in rates, because tho government would fix all Interstate rates, dh it does at present. This would givoan opportunity to tost (he relative merits of private vs. public ownership. The government ownod system would have lowev fixed charges because its bonds would bo issued at lower Intorest rates. The rosulting profits could bo used either to extend the systom or pay off the debt. The taking over of a trunk line would not embarrass the owners of branch lines (whether owned by a corporation or a stato), be cause the trunk lino would be open to all on fair and impartial terms. In other words, while it is government owner ship, tho larger part of tho problem Is distributed among forty-eight states and can be extended over a numbor of years. WOULD HARMONIZE WITH GOVERNMENT If tho dual plan is adopted tho government: can, in a short time, put into operation a trunk line system which will make each state Inde pendent in regard to railroads within its borders? because whether these rallroa'd lines be long op short they can find an outlet over tho national system, and the states can put the system oi government ownership into operation as rapldh as public sentiment Is ready, exercising ip the meantime a complete control over intrastate! traffic. ' - The dual plan harmonizes with our form ol government in that it provides for national ownership and operation of a system of national linos, and state ownership and operation of local lines. Where connecting local lines extend through several states joint traffic arrangements can be! mado without difficulty, first, because the ad joining states will be equally interested in n n iS M n ,: -bU-. . tiAt "ft iif1ilu'itL0 -fa ..