roads, and the large-scale publicity of the Association of Railway Executives, the defense of the railroads against the wide-spread charges of their critics was not adequately put before the public. The work was not sufficiently diffused. The belief was widely held that the railroads were operating under a guarantee from the Government which would give them 6% on their capital stock. Needless to say the railroads enjoy no guarantee of any kind, and the statutory rate of return aimed at (but not assured) in the Transportation Act applies to the roads in groups, not to the individual companies. Besides, the ratemaking rule relates to property value and has no reference to capitalization. It is believed by many that the railroad officers, while in the service of the Government during the period of federal control, deliberately conspired to increase costs and otherwise to discredit governmental operation. The author was in a position to know the facts and can state with assurance that there was no ground for the charge so often then made and now often repeated by spokesmen for those who favor the Plumb Plan or nationalization. Too many of the public accepted as true the charge that interlocking directorates controlled the purchasing agents of the individual railroads and forced them to purchase equipment and supplies at prices higher than could have been had if such influence had not been present. Here, too, the author knows from personal knowledge that no such influence was or is exerted on the typical railroad. It is widely believed by the general

public, and particularly by railroad employees, that a gigantic conspiracy existed (and now exists) among Wall Street financiers which cripples the local managers in the conscientious administration of the properties. While it is true that maintenance programs, betterments and purchases of new equipment must be cut according to the available financial cloth, and that the financial headquarters of a substantial number of railroads are in New York City, it is not true that on the typical road the New York financiers control or interfere with local management in the conduct of operations other than in formulating a general financial policy in harmony with the earning power and credit of the individual corporation.

These misconceptions growing out of misrepresentations and half-truths disseminated by those who are honestly opposed to the corporate form of railroad control, or by those who are selfishly or professionally actuated by a desire to discredit railroad management so that Government ownership or the Plumb Plan may take the place of private management, are cited merely as illustrations of misrepresentation which the railroads should correct. The list might be indefinitely extended, but the few instances will here serve as well as many. Such charges, as well as those which truthfully reflect upon the management of the railroads generally or upon the actions of individual officers, should be completely answered by the facts. During 1921, when they had a bearing upon the insistent demands for

rate reductions, when the railroads were earning but little more than one-half of the statutory rate of return on property value, it was particularly important that the public should have been taken fully into confidence and not misled by failure to see or hear a complete and frank answer. On the part of the railroads there was a failure, generally speaking, in not keeping a finger locally upon the pulse of public opinion.

What was then needed, and what is now needed, is a decentralization of railroad publicity. There is room for centralized effort on a small scale when special opportunity offers, but the really effective results come from the local touch between the officers, agents and employees of the individual road with the local public which it serves. This is not to say that the executive officers of a railroad should undertake barnstorming expeditions, nor neglect their more important duties for speech-making. They may reserve their statements for large audiences, but each president should insist upon the painstaking carrying out of a policy of taking the public completely into confidence through local contact by subordinate officers. This assumes, of course, that the policy includes also a plan under which these subordinate officers are kept fully informed. It is a mistake to assume that it is useless to answer incorrect or misleading charges. Failure to answer may be mistaken as proof that the charges are well founded. The facts should be placed fully and frankly before the thinking and openminded public. Fortunately, the majority of the

public is of that type. It hears much in criticism of the railroads; it hears too little of the answer.

The foregoing discussion of public relations leads naturally into a subject somewhat similar in nature the change in attitude toward railroading as a career for ambitious men.

Two tendencies have recently been apparent in railroad organization. Here and there throughout the country we read of men, who have been prominent and successful as executives in transportation, transferring to other forms of corporate activity. The number is not large but the tendency is unmistakable. The second tendency is for college-trained men to pass by the railroad field in preparing for and finally deciding upon their life work. The railroads, therefore, are losing some of their best executive, traffic, engineering and operating experts, and they are not attracting the type of young man best fitted by general and specialized education to develop into broad-minded and resourceful officers. These tendencies, if not checked, will have a demoralizing effect upon railroad organization.

The reason for the change in attitude on the part of some of the railroad general officers, and the lack of confidence on the part of the younger generation in transportation as a field of opportunity, are easily found. The men who have grown up in the railroad business, and have attained recognition as successful managers, are chafing under the increasing restrictions upon personal initiative. There is now much smaller

play for individuality than in the period when they attained their early successes. A large part of the joy in the work has been taken out because of the steady transfer of authority from management to commissions and boards. The Interstate Commerce Commission and the State Commissions control the revenues and now have wide powers over operating methods. The Labor Board establishes the rates of pay and determines the conditions of employment.

Then there is the widespread criticism of the salaries of railroad executives. It is difficult for them to understand why the responsible head of a large public service corporation should be pilloried because he receives from $35,000 to $50,000 per year, when his personal friends who are executives of large industrial concerns, and who carry lighter loads of responsibility, are paid much more and are held in esteem because they can command such large salaries. The public appears to be quite willing that Charlie Chaplin should receive $1,000,000 per year for his contributions to the mirth of the movies, yet they find fault because the president of a railroad company, employing 100,000 men and representing an investment of hundreds of millions of dollars devoted to public service, is paid $50,000. This public criticism of salaries, coupled with the loss of opportunity for the exercise of personal initiative in management, has placed a few of the railroad executives in a receptive frame of mind

The number of railroad presidents who receive more than $50,000 per year is exceedingly small.