of material, such as steel that would otherwise have gone into rails and equipment, wood such as would have gone into cross ties and trestles, etc.
B. The inability to secure labor to conduct the work, due to its absorption in war activities, it being estimated that nearly 15,000,000 men were either in actual service or engaged in the support of those who were, or in the production of war materials.
C. The plight in which the Director General found himself, in first having made a large increase in the wages of the employees, without providing for additional revenue through an increase in rates, then relying upon the belief that there would be a sufficient increase in business to safeguard the situation, and his subsequent resort to a reduction in working forces and application of material, to save himself through a decrease in expenses.
D. There was a great deterioration in the morale of the forces, which the roads are finding very difficult to correct, especially as the railroad organizations are entrenching themselves behind the authority of the United States Railroad Labor Board. The effect of this is lasting and its cost is difficult to estimate, but it will run into substantial percentages as affecting expenses.
“T have seen no figures, except very rough estimates, but the indications are that the deterioration during the 26 months of federal control and the six months of the guaranty period will not exceed one billion dollars nor be less than $750,000,000.
“Attention is called to the fact that many items, such as land, sub-grade, interest during construction and other overheads, do not depreciate and, therefore, other items have shown a very large depreciation to reduce the total to 4 per cent. Therefore, cost of
