EIGHTEENTH ANNUAL YEAR BOOK — PART VH 425 



but I would be losing traffic. People would get into the habit of sending 

 traffic over the other railroad, and I would have to commence all over 

 again to get it back. The same is true of terminals. The company that 

 loses the terminal, while its competitors are getting the use of it, is 

 losing something tangible in the shape of business which it has had in 

 the past and wants to maintain in the future. Here and there they will 

 eliminate competitive service, but when it gets' down to a fundamental, 

 systematic unification of ouT railroad system, you see it will be very 

 difficult to secure adequate results under private operation. You appoint 

 a railroad dictator, and he commences taking off the service from one 

 railroad, and substituting another one— how long will he be apt to hold 

 his job under private operation? 



There are certain advantages of government operation during the war; 

 I am not speaking of government ownership. "We are now sending thou- 

 sands of engines and cars to France and Russia. One great factory, I 

 understand, is sending eighty per cent of its output to Europe by the 

 direction of the United States government. Now there is a balancing of 

 respective needs. It is necessary for us to operate our transportation 

 system efficiently, as well as it is for France or Russia.. We are entitled 

 to and must have some of the equipment, while those countries must have 

 some. The government would be in a better position to determine the 

 relative needs in Europe and America, and consequently to direct what 

 portion of the cars and engines should stay in the United States and 

 what portion should go abroad, if it was operating the United States plant. 

 There are great advantages in standardization. One celebrated manufac- 

 turer of automobiles, it is stated, has been successful chiefly because he 

 has adopted one standard type of machine, and the manufacture of the 

 parts so standardized that they can be distributed all over the country 

 far in advance of their use, eliminating the necessity of construction of 

 new machinery constantly. Would it not perhaps be TVell to similarly 

 standardize the type of car and engine and other facilities, one railroad 

 not dictating a different type from another? 



Another reason in favor of government operation is this: England 

 has learned the wisdom of preventing one additional burden being placed 

 upon her citizens during the war. Within one day after England was in 

 the war, she took over the operation of the railroads. The annual dividend 

 rate on the principal roads of England is less today than it was before 

 the war, with only a few rare exceptions. The average annual dividend 

 rate is approximately the same or less. The reason why it is less is be- 

 cause they took the average of several pre-war years, if I am correctly 

 informed. 



If you have private operation and private credit, in order to compete 

 with the money market of the world when the rate of money is constantly 

 climbing skyward, you have to advance those interest rates and those 

 dividend rates in order to get the money for these needed improvements. 

 But if the government secures the money and controls the expenditures, 

 the government can secure the money at a less rate than the railroads 

 could, even before the war. 



I would like to ask (not committing yourselves to government owner- 

 ship) how' many in this audience favor the proposition of government 



