DECEMBER 24, 1947
HYDE PARK, Tuesday—In this column a couple of weeks ago, I outlined a railroad executive's arguments for continuing private ownership of American railroads. Now to put before my readers the arguments of a labor leader in favor of nationalization of our railroads.
He writes me that he feels that "the ideal of free enterprise is gradually being destroyed by the growth of powerful and selfish monopolies." He feels that our railroads are not effectively regulated by the Government. He says less than one-half of one percent of freight tariffs are brought before the Interstate Commerce Commission for consideration and action. And his feeling is that this commission has been more indulgent to the interests of railroad management than to the interests of the employees or even of the travelling and shipping public.
The accusation is made that the commission does not follow through and make sure that the railroads comply in the matter of safety equipment or safe operation. The railroads themselves are accused of always waiting until they are "forced" to make improvements in either the working conditions or wages of their employees as well as in the modernization of their equipment.
An example is cited to prove that selfish gain rather than public service is the main factor in the management of railroads. The example is the running time of eight important routes for the shipment of fast freight from California to Chicago. These routes vary in length as much as 450 miles, and yet for all of them the running time is set at 118 hours and 30 minutes.
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It is claimed that the railroads insist on earning on a higher valuation for Class I roads than the actual par value of the railroad stocks and bonds. This is, of course, a very controversial question since there are many different ways of approaching valuation. But the argument is made that the Government could acquire the railroads for approximately one-half the amount on which the owners feel they must earn a return.
And it is claimed that operating costs could be cut—for instance, in the case of those fast freight trains running between California and Chicago. One of the complaints made by those in favor of nationalization is that railroad management is not free to act upon many suggestions for economy and the better running of the roads because they must do the bidding of "financial overlords." My correspondent concludes: "I have therefore come to the conclusion that the only final and complete answer to this problem is government ownership of the railroads."
I wonder what the verdict of the American people is going to be, in the course of the next few years, on the nationalization of industry. I am quite sure that the regulation now done by government could be better done. I am quite sure that we should remove the political influence which is felt in every branch of the Government even when it deals with business where there should be no question of politics.
However, my feeling is that our country is still so young and is so big that it would be well to move slowly and to make any changes only after careful consideration, since I do not feel we have as yet reached the final chapter of our free-enterprise system.