The distinguished writer upon railroad economies, William J. Cunningham, James J. Hill professor of transportation at Harvard and himself for a time a subordinate executive of the Railroad Administration, does not believe that the experiment was a success. In a recent issue of the “Quarterly Journal of Economics” he says:
Finally we ask ourselves whether our recent experiment in Federal control affords an adequate test of the desirability of a permanent policy of public ownership and management. The answer is plainly in the negative. The results in 1918 were favorable. In 1919 they were unfavorable. They were favorable in 1918 because at that time we were actively engaged in war, every influence of patriotism supported the Railroad Administration, and the organization was held at concert pitch by the critical military needs. The unfavorable results in 1919 may be attributed in greater part to the pronounced reaction from war-time strain, to the serious decline in traffic, and to the disintegration of the organization in a too prolonged closing period. No one should question the expediency of the Government’s action in taking the railroads in the emergency. The centralization of power and the more effective coördination with other branches of the Government in the crisis made possible effective results in the utilization of equipment and facilities, which would have been much more difficult under private management. But it is not proper to treat that period as the test of what might be expected under normal conditions. As regards the unfavorable year, 1919, it would be as unfair to make that a test of government operation as it would be to take the present period of subnormal traffic and disturbed economic conditions as the final test of private management.
Those who advocate nationalization and look upon the results of both years as favorable to government operation must concede that they are to be credited to railroad men who rose to the emergency. The proponents of nationalization who are disappointed in the results of the two years attribute the failures to the fact that the real management during the greater part of Federal control was in the hands of men who were brought up under private management and who therefore could not or would not avail themselves of the advantages of unification.
It is plain therefore that nothing definite can be proved from the results of 1918-19. A real test of government operation is possible only if carried on over a longer period—one in which business conditions are normal and in which political expediency would have normal play. The period under review was so abnormal that the results are valueless as guides to what might be expected from similar control or complete government ownership when normal conditions return.
I do not agree entirely with Professor Cunningham. I am not a “government ownership (or operation) man,” but I feel that the experiment of the United States Railroad Administration, despite the tremendously difficult conditions under which it was operated, and also despite the fact that it was made at a very inopportune and inappropriate time, did have much real value. Unquestionably the time set for the experiment was far too short. Both Mr. McAdoo and Mr. Hines went on public record as saying that there be at least five years of peace to show their plan at its full worth.
But even in twenty-six brief and hectic months many things were developed that should be, that must be eventually, of great value to the present private operators of our railroads. Of many of these things as well as the possibilities for their development, this book will have to tell. The Railroad Administration at least pointed the way to them. In view of that, shall we not be broad enough to overlook its errors and its mistakes, and yet call it a real advance toward the solution of a national problem that advances sluggishly to that end?
CHAPTER IV
THE RETURN OF PRIVATE OPERATION