Monday, Feb. 02, 1925

Costs

Last week, the U. S. Director General of Railroads, James C. Davis,* rendered a report to President Coolidge. Although the books are not yet closed, he was able to make an estimate of the final cost to the Government of operating the railways during the War. The tabulation:

Excess of expenses over receipts during 26 months of Government operation, $1,123,500,000.

Cost to the Government of guarantee of earnings to railways for first six months after their being turned back to private owners, $536,000,000.

Damages of $768,003,274 claimed by the railways for under-maintainance, etc., settled for $243,647,196.

Due short-line roads for deficits sustained because of Government operation of main lines, $15,000,000.

There are also pending 6,000 or 7,000 private suits for damages against the railroads under Government operation, but the cost of settling these cannot be great comparatively.

Against these expenses, the Government secured $195,072,295 from the railways for expenditures in excess of requirements; this, with other items, brings the estimated total cost to the Government down to $1,674,500,000.

Such was the expense to the Government of taking over for its War time needs property of estimated value of $19,000,000,000, a 'business with about 2,000,000 stock and bond holders and the same number of employes, with equipment consisting of 366,197 miles of track, 2,408,518 freight cars, 66,070 locomotives, 55,939 passenger cars, 532 separate railways (exclusive of some 855 short line railways, not taken over) and 25 coastwise and inland steamship lines, with terminals, floating equipment, elevators and other essentials.

With the exception of the private suits for damages, the entire settlement was made without a single lawsuit.

*James Cox Davis, not to be confused with either of the last two Democratic candidates for the Presidency, is a native of Keokuk, la. Once he was mayor of that city; later became general attorney for Iowa of the Chicago and Northwestern Railway. When the Government took over the railroads, he became first General Solicitor of the "Northwestern" and then general counsel of the Railroad Administration. In March, 1921, he was appointed Director General of the railways to settle the controversies arising out of returning the roads to private ownership. Now in his 60's, bald, white fringed, quizzical, he is completing the task. For JO years he has carried a rabbit's foot.