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Hardwood Record — Veneer & Panel Section 



merce of the country cannot stand unrestricted private ownership 

 and operation of our transportation facilities; that our attempt 

 of regulation and control was abortive because the regulating 

 acts were so fatally defective as to give no authority. 



Government Regulation 



When we entered this great world war the government found 

 it necessary to tal<K over our railroads as a war measure, the 

 purpose being to increase the operating efficiency of the railroads 

 to meet war requirements. It has been asserted that the railroads 

 themselves would have been equal to the situation if left to them- 

 selves to work out the problem of transporting troops and supplies 

 and other things to meet government necessities. Whether this 

 be true or not, it is needless to speculate, as we are dealing merely 

 with the facts of the different phases of our railroad problen> 

 as we find them. 



It seems clear that the result of governmental operation of our 

 transportation facilities operated as one system must be highly 

 beneficial to the commercial interests as soon as the congestion 

 incidental to war traffic is relieved and the consolidated operation 

 has had a fair opportunity to demonstrate its value. By reason of 

 this war the government has reached by a short cut supervision 

 and control over all of the activities of railroads which should 

 have been vested in the Interstate Commerce Commission by the 

 Interstate Act but which was not. Pooling of equipment and 

 power gives a needed elasticity of transportation facilities so that 

 it may be used to the extent needed in territory where the traffic 

 is the densest and the requirements the greatest. The consolidated 

 operation of terminals should relieve car congestion and increase 

 car efficiency. Under existing laws there was no prohibition 

 against the pooling of power and equipment or consolidated oper- 

 ations of railroads, but by reason of conflicting financial interests 

 and competitive conditions such operating unity could not be 

 brought about. I do not believe that the commerce of the 

 country has outgrown the transportation service when operated 

 as a unit. I do believe, however, that the commerce of the 

 country could not be adequately served under the old conditions 

 of separate operations of the different railway companies, each 



Advanced Rates 



With the tremendous increase in the volume of business and 

 the disturbance of train schedules by reason of necessary prefer- 

 ence given to war material and transportation of troops, trans- 

 portation costs have increased. To meet such transportation costs 

 an advance in charges is necessary, but we do not believe that 

 such an advance should be greater in measure than is necessary 

 to meet the increased costs. It is estimated that the proposes^ 

 advance of 25 per cent in freight rates and passenger fares will 

 increase railroad revenues approximately one billion dollars per 

 year. To what extent this sum exceeds the increased operating 

 costs we are not prepared to say, but we do not believe that your 

 transportation tax should be at this time increased to an extent in 

 excess of the increased operating costs. If the railways need 

 refinancing, it seems to me that the government might well ad- 

 vance them the necessary funds at a low rate of interest. You 

 as manufacturers and shippers have your increased cost of opera- 

 tion to bear, your war taxes, and in addition you are now called 

 upon to pay a transportation war tax of 25 per cent. If the 

 revenue thus raised is beyond that necessary to meet the increased 

 operating costs and goes to the rehabilitation of the railroads, it 

 is more than you ought to be called upon to pay. The owner of 

 railroad property is guaranteed earnings derived from operation 

 equal to those received for an average of a 3 year period ending 

 July, 1917: thus his profits are secure. The manufacturer and 

 shipper of freight is not guaranteed any profits but on the other 

 hand is called upon to pay this increased transportation war tax 

 irrespective of the results to his business. 



It appears, however, that nothing at the moment may be done 



but to accept these advances until the results of the economy of 

 operations are known and it can be determined to what extent the 

 additional billion dollars is needed to meet increased operating 



The first consideration in the heart of every American is to 

 stand by the Government and win the war. We must all willingly 

 suffer inconvenience and loss for this end. But the burden should 

 be so far as possible equitably distributed. We should ask for 

 a fair and full investigation as to whether this tremendous increase 

 in railroad revenues is necessary to meet governmental require, 

 ments and whether there has been an equitable distribution of this 

 transportation tax. We accept as a probable fact the necessity 

 of arbitrarily putting into effect this great advance in rates without 

 giving the shippers a chance to be heard, but surely we will not 

 be thought to be unpatriotic if we suggest that the owners of 

 railroad property should do their bit in common with the owners 

 of other property. 



Railroads in the Future 



As the law now stands the railroads will be returned to private 

 ownership twenty-one months after the war. It is the duty of 

 the government to see that facilities ample and adequate to 

 efficiently transport the commerce of the country are furnished. 

 Its policy ought to be and undoubtedly will be a constructive one. 

 Greater progress will have been made toward efficient transporta- 

 tion during the period of government operation of railways than 

 has been made by the railways themselves in the last fifty years. 

 In the last analysis the business of the country controls the policy 

 of the government. It is for you to say what that policy shall be 

 in respect to the railroads. Do you want government ownership? 

 Many serious objections are urged against it. Such ownership 

 creates two million additional government employees. It throws 

 our transportation system into politics. It would not do to apply 

 the postage stamp system of rate making or the mileage system 

 in this country. Unless the law that now stands is changed, the 

 railways in twenty-one months after the war will be returned to 

 private ownership. Under what regulation and control shall they 

 be operated? That is for you and other business interests of the 

 country to determine. They must be operated so as to return a 

 reasonable profit upon the investment. Are you going to be 

 satisfied with the present law that gives the Interstate Commerce 

 Commission jurisdiction over the revenues of the railroads only 

 without any voice as to the expenditures or the reasonableness of 

 service or the issuance of securities or other railway activities? 

 Lumber rates have been advanced in the last five years approxi- 

 mately 40 per cent in certain sections. It is now proposed to 

 advance 25 per cent more, 65 per cent in the last five or six 

 years. Can this be continued indefinitely and the lumber mills 



The lumbe 



^f thi 



ry should for 



CO-ORDINATION OF BUSINESS 

 The co-ordination of business with the eovernment in 

 the war was the subject of a talk by John N. Van der Vries 

 of Chicago, member of the Chamber of Commerce of 

 the United States. His address follows in part: 



The value of organization has never been shown more thor- 

 oughly than at this particular period when we are at war. The 

 difference between the European countries and America is the 

 close relationship which exists over there between business and 

 the government. The real modern organization is of French 

 origin. Napoleon was the originator of the association scheme 

 when he organized bodies of business men after he had captured 

 a town, so as to have organizations in the rear which would be 

 of help and back him up in his war schemes. 



Six years ago the United States and Turkey were the only 

 countries which did not have a national organization of business 

 men. The result in this country was the organization of the Cham- 



