Norwich Bulletin

HINES GIVES HIS VIEWS ON OPERATION OF RAILROADS

Director-General of Railroads Tells Senate Interstate Committee Why Government Operation Should Be Extended Five Years or the Roads Returned to Private Management Before the Present 21 Months' Period Expires--Believes Eventual Solution Would Be Development of a Few Large Railway Systems, Privately Owned and Operated, Under Strict Government Supervision.

Washington, Feb. 3--Exaggerated complaints against government railroad operation growing out of a natural reaction from war time patriotic tension is a psychological factor which makes it difficult at this time to develop a permanent solution of the railroad problem. Director General Hines said today in testifying before the senate interstate commerce committee.

This is one important reason, Mr. Hines said, why government operation either should be extended five years and time given for deliberate consideration, or the roads returned back to private management before the present twenty-one months period expires.

Citing many cases of complaints against government operation which he said were based on misapprehension or failure to understand railroad practices, Mr. Hines said.

Apparently every hardship or difficulty connected with the war time operation of the railroads proves momentarily to be regarded as a reason why there should be no solution except a prompt turning back of the railroads to all the railroad companies with new legislation which really makes no fundamental changes whatever. I do not believe this state of mind will change until there is an opportunity to look in a understanding way at the results of federal control under peace conditions."

Mr. Hines explained this he believes the best eventual solution would be development of a few large railway systems, privately owned and operated under strict government supervision.

"There can be no solution through the operation of the railroads by the numerous existing railroad corporations with their widely varying financial structures," he said.

"The deep seated suspicion of the public and of labor that there is serious over capitalization largely negatives all representations as to the propriety of any given level of railroad operating income.

"If any plan of private management is to be successful, it ought to provide for the participation of the government and perhaps of labor in the profits in excess of some comparatively moderate return.

"The logical thing to do is for the government to ascertain what the fair return ought to be and to guarantee that to the railroads and then if it wishes the benefit of the increased efficiency which may reasonably be expected from private initiative, it can permit a moderate participation in any profits in excess of that return.

"It is recognized that it is indispensable that capital invested in railroads shall yield a sufficient return to attract additional capital. But the proposed plan of private management involves the whole subject in so much confusion and uncertainty as to make the prospect of obtaining additional needed capital highly unfavorable.

The real object sought to be accomplished can be obtained without all this uncertainty and injury by the government itself assuring once and for all a fair return."