bad points and charge the blame to Government supervision. In both they are usually wrong, and designedly so. A striking illustration of this unfairness is found in the accounts of the operation of the Western by the advocates of private ownership. On January 1, 1909, the French Government took over the Western and has since operated it as a Government road. Here is the lurid story of the opponents:

Beginning five years before the transfer, in ten years the revenues increased 31 per cent and the operating expenses 100 per cent and the operating ratio from 56.4 to 85.2. During the last ten years of company management the treasury had to pay an average of $2,894,280, but the first four years of Government ownership it arose from $6,753,320 to $14,752,237. The service was absolutely demoralized. The payment for accidents increased from an average of $500,000 to $2,045,291 in 1911. The number of employees was greatly increased, and out of the over $10,500,000 increase in expenditures from 1908 to 1911 nearly $8,500,000 was for wages and salaries.

A little analysis of their figures shows that 37 per cent of the increase in expenditures occurred under private management and likewise 11.4 of the operating ratio, and these big increases occurred during the last year or two. It must also be noted that the figures given for the cost to the treasury during private management is a 10-year average. The last year or two it was very much higher, and it is necessary to use a 10-year average in order to cut this down. The fact is that in 1908, the last year the Western was under private management, the burden upon the French treasury for all its railroads was $52,000,000. Upon the question of accidents the methods of argument is reversed. Averages are no longer valuable, so the particular year of 1911 is chosen. That is an exceptional year and it is wholly unfair to use it in comparison with preceding averages. Upon the question of increased wages, some of us are not yet convinced that such a result is a public calamity. A large part of this big increase in wages was for delayed maintenance, which fact is carefully kept from view. It will be admitted that the salaried-office class was unduly enlarged the first year of Government operation, but that has since been remedied, which fact is also carefully omitted. The real truth as to the Western is quite simple. It was a failure under private management financially and every other way. The private company threw up its hands and during the last years neither tried to operaate or maintain the road. For a time this policy produced greater net revenues, but the reaction was inevitable. The Government was forced to take over the road and also forced to pay a large amount to restore it to even a poor working condition. The amount of delayed maintenance was enormous and the equipment was practically useless. This accounts for the increased expenses. The road is better than it ever was under private management. Mr. Edward Dudley Kenna says of this railroad:

The Western was the poorest railway in France, and it is still far from the best. But it is now better than it was under private ownership. Of course large expenditures have been required and more will be required before it can be brought to a state of complete efficiency. The recent history of national railroad operations in France proves nothing. That it has been cited by others as an argument against State ownership indicates either a lack of good faith or little acquaintance with the facts.

The CHAIRMAN. Who says that?

Mr. BROOKHART. Mr. Edward Dudley Kenna, former vice president of the Santa Fe Railroad in this country, who has written very fairly on this question of Government ownership.

The CHAIRMAN. Is Mr. Kenna still in the railroad service?

Mr. BROOKHART. No, sir; he retired some years ago; not very many years ago, however. He lives in Chicago now.

The French rates, both freight and passenger, are lower than the American. In 1908 the average passenger fare was 1.10 cents per mile. The ton-mile rate was 1.21 cents and the average haul 78 miles. In 1910 the fare on the State railways was from 1.03 to 1.07 and on the private railway from 1.11 to 1.25, with the density 112 per cent.

You see these roads are operating side by side the same as in Canada.

For the same service the freight rates were also lower on the State railways, but because of the difference in traffic the ton-mile rate was higher. The heavy freight from Paris to the coast went by water. The figures are as follows: State ton-mile, 1.55 to 1.60 cents; density, 293,918; average haul, 71 miles. Private ton-mile, 1.18 to 1.46; density, 819,055; average haul, 96.

The dividends guaranteed by the Government are as follows:

Only about 10 per cent of the capitalization is stocks.

Per cent

11.2

11

10

You see they have nearly three times the density of the private roads and a considerably longer haul.

It is admitted that the people are solid for Government ownership, but the point is made that the ton-mile earnings for New South Wales are 2.20 cents and for South Australia 2.12 as against .75 cents in Canada and .738 cents in the United States. This statement is grossly unfair. In the first place, it is necessary to go back before 1909 to find a ton-mile rate in New South Wales of over 2 cents. In 1912 the rate was only 1.78 cents, the average haul was only 81 miles, and the freight density only one-fourth of the United States. In the same year the American rate was .744 per ton-mile and the average haul 256.87 miles. It is therefore necessary to add over 24 terminals to the American rate and that will raise it to

1.474 per ton-mile. When we consider the other fact that the American density is four times the Australian it conclusively proves that the American rates are actually higher. With this must go the other fact that the passenger fare in New South Wales was only 1.04 cents per mile against 1.987 cents in the United States. With freight rates lower than the United States and with passenger rates only a little over half of ours in 1911, New South Wales earned a surplus of $2,578,000 upon her 3,799 miles of line after allowing 34 per cent interest on the whole cost of the roads. (Dunn, 318.)

The next unfair proposition is the comparison of New South Wales with Texas. The Texans ought to resent this forever. The claim is also made that private ownership has developed railroads and the country faster in the United States than public ownership has been able to do in Australia. In order to refute these claims, I desire to introduce some maps and charts from the National Geographic Magazine of December, 1916.

They have borrowed their money cheaper than any other country where private ownership prevails.

Senator Cummins put the question to me, Why had not the Government-ownership railroad lines developed in that country like the privately owned railroads in the United States? Here is the answer: Here is a map showing the rainfall of 8 inches, and you would have to take the United States and start in with the desert at Pittsburgh and spread it all over the Mississippi Valley, reduce it to 5,000 population, in order to get a comparison with Australia. As quick as you know that fact you will know that railroads, or nothing else, will ever develop in Australia like they have been developed in the United States until the Almighty changes things down there. That is impossible.

Mr. EscH. Is it not due also to provincialism-that is, each State wanted to keep its own traffic in its own borders and each would have a different standard rail, so as to keep the cars from going into another Province ?

Mr. BROOKHART. That is undoubtedly a detriment to development, but, Mr. Esch, even if you had a perfect system of railroads, like Japan, we will say, and all of one gauge type, that can not develop that country anything in comparison to the United States; it is impossible because of these natural conditions.

I will offer these charts, with the statements under them, giving that description.

(The charts referred to by the witness are here reproduced as follows:)

A comparison of the density of population of Australia, the United States, Siberia, France, and

Argentina.

The squares represent the relative areas of several countries and the dots the population, there being a dot for each 1,000,000 inhabitants. If small squares are formed by connecting the dots, the relative sizes of these will represent the relative amount of land per inhabitant.

More than two-thirds of the territory of Australia has less than 20 inches of rainfall a year. Washington, D. C., has 43 inches; Boston, 43; Chicago, 33; Kansas City, 37; Atlanta, 49; New Orleans, 57; Denver, 14; San Francisco, 22; and Seattle, 36. Being without high mountains, the continent has no summer snows to melt, which renders irrigation, except by artesian wells, almost impossible. Fortunately the configuration of bedrock makes artesian irrigation possible in many places, though the water so obtained is usually brackish.

Now, compare with Texas:

Texas has a population of 15 people to the square mile, while New South Wales and Victoria, the most densely populated part of Australia, have only five, and more than one-third of that in a single city. If the whole Mississippi Valley were turned into desert, with less than 5,000 population, the United States would still be a better railroad proposition than Australia. The maps and charts I introduce are found on pages 488, 512, and 513. Australia can never be developed by railroads until the plan of nature is changed.

The particular figures relied upon to prove that private ownership in Texas is better than public ownership in New South Wales are as follows: In Texas in 1915 the ton-mile rate was 0.995 cent, the average haul 135 miles, and the density 490,666. The passenger rates were 2.42 cents per mile and the average journey 53 miles. In New South Wales the ton-mile rate was 2.20 cents, the average haul 79 miles

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and the density 229,250. The passenger rates were 1.15 cents and the average journey 14 miles. I must challenge the statement that the average haul in Texas is only 135 miles. The only way such a figure could be found would be to take the typical haul of the average railway and cut it off at the State line. This is unfair and entirely misrepresents the actual facts. Perhaps over 85 per cent of the Texas traffic is interstate. This comes into the State from far distant points and it goes out of the State to like points. The proportion of the rate paid in Texas is based upon the long haul and not upon the part of it within the State. The passenger journey in Texas is over 60 per cent longer than the average of the

United States. The freight haul will likewise be longer than the average of the whole country when the actual movement is considered. It is longer than the average in all of the Western States. It may be asked if the same rule would not apply to New South Wales. Again the facts are conclusive. The railroads are built on a different gauge from the other colonies and the cars must be unloaded at the State line. This breaks the length of haul, which does not happen in the case of Texas. It is therefore safe to say that the average haul in Texas is over four times the average haul in New South Wales. This makes it necessary to add three terminal expenses to the Texas rate. Using my minimum figures for terminal the Texas rate is raised to 2.015 cents per ton-mile and using my