DECEMBER 2, 1947
GENEVA—To continue the discussion of private enterprise versus nationalization begun in my preceding column, here are the facts in favor of private ownership of American railroads, as presented to me by the head of one of our railroads.
American railroads directly serve 60,000 communities. They employ about 1,360,000 persons with an annual payroll of about $4,200,000,000. In 1921, the average annual wage per employee was $1,820; today it is almost $3,100. The railroads purchase annually about $1,500,000,000 worth of goods, and their aggregate taxes amount to about $500,000,000 per year.
Today they are only one of a number of types of transportation in the United States, but they did much of the pioneering work in the development of unity between different sections of our country. Railroads have helped to build communities, to develop new industries, to improve farming. They are still interested in such development because the general traffic and operating policies of the many companies originate with and are mainly directed by local management, which is familiar with the existing and prospective needs of the communities that the railroads serve.
Railroads handle 60 percent of all our inland freight. During World War II, almost two-thirds of all United States traffic and more than 90 percent of Army and Navy freight was moved by rail.
In World War I, the railroads were taken over by the Government. The average revenue per passenger mile increased 51 percent, and the average revenue per ton mile increased about 80 percent. But during the period from January 1, 1918, to March 1, 1920, in spite of the increase in both freight rates and passenger fares, there was a deficit of $1,616,000,000, which had to be borne by the taxpayers.
In World War II, when the railroads were not taken over by the Government, freight rates remained at approximately prewar level and passenger rates increased only slightly, but the taxpayers sustained no loss. Under private operation, with fewer employees, fewer locomotives, and fewer freight cars and passenger cars, the railroads moved on the average each month about twice as many troops, twice as many passengers, more than five times as much Army freight, twenty times as much Navy freight, and nearly twice as much other freight than had been carried during World War I. In proportion, of course, the taxes paid to the Government were very much higher during World War II, so that this would seem to have been an outstanding record for private enterprise.
The railroads and switching companies of the United States are owned and operated by almost 700 separate corporations, and there are almost 1,000,000 stockholders, who are located in every state in the Union. It is estimated that about 1,000,000 people own railroad bonds, and many others are interested through the holdings of trust companies, insurance companies, etc. The railroads contribute in taxes about half a billion dollars annually under present traffic volume. They are given no subsidy, which is not the case with all methods of transportation.