The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1907-09-15
Wholesale CUTS
IN RATES AVOIDED
BY COMMISSION
Advances by Railroads
Likely to Cause
Complaint
Question of Capitalize
ton Coming Before
Congress.

That The Interstate Commerce Com
mission viii not attempt basic reduc-
tons Of rates or reductions on any
general scale may be accepted as prac-
ideally settled. The commission will re-
assemble. probably about October !, and
enter upon the hard work that lies be-
fore 1t. II viii ind itself pretty sharp
" criticised in some quarters because
there is a tendency on the part Of the
railroads TO increase freight rates
rather than TO reduce them In fact,
this tendency has been noticeable since
the rate law went into effect. and there
mas been a disposition to take the COM
mission TO task for II.
But on high authority, it is learned
shat no general re auction in freight
rates may be looked for. The reason
IS plain. The railroads VIII be enabled
10 point TO increased cost of labor and
Snakeriols, and this will undoubtedly
- accepted by the commission as solv-
&nE the broad problem, whether the
lcommission should proceed on the theory
many OF the principal basic rates are
zoo high. The commissions view,
jEather. will be that il they have been
TOO high in the part, they can hardly
es held so now, under present condi-
atoms.
To Take Up Discrimination.
The commission will devote itself to
cases Of determinations in rates. It
will not, Of course. overlook cases
brought TO its attention, where individ-
1ual rates are obviously too high. How
far 1t viii 80 when confronted with
questions involving determinations IN
whole sets Of rates. as between locali-
ties, is a matter that is not yet deter
mined. but il will De impossible for the
commission 10 get around this much
longer.
Cases in which there have been large
increases Of rates will call for deci-
sive action Of some sort by the COM
mission. Thus. the lumber rate from
the Northwest promises TO be a source
Of trouble. The rate fixed by the Hill
roads has been very low. lumber being
carried to the Mississippi valley and
farther East at astonisningly low rates.
This has been possible because low Iun-
Der rates have been preferable TO maui
ing eastward from the Pacific coast long
trains Of "empues."
The development of the country has
tended to Increase the general freight
from the Pacific coast to the eastward.
and a large Increase in the lumber rate
is threatened.
Attitude on Capitalization.
Much interest viii surround the rec
concentrations Of the commission in its
annual report. It viii favor control of
the capitalization of railroads as 10 fu-
ture issues Of stocks and bonds Sup
posedly it viii go al far as the Presi-
dent went in his Indianapolis speech in
urging that a physical valuation Os rail-
roads be made when necessary in the
performance OF the duties of the COM
mission.
Around these subjects viii I'm all prob
ability rage a great debate in Con-
gress tlHs winter and 1t is OF interest
TO know that the President will find
there is powerful resistance in Con-
gress to the idea he advanced at IN
dianapolis that railroads should not be
allowed to go ahead in the future cap
italizing unearned increment.
Argue Against Presidents View.
Against the Presidents proposition, it
VIII be argued that unless roads can go
On capitalizing unearned increment and
charging rates accordingly, new rail-
roads viii be absolutely shut out Of ter
Titory where, through development,
value of right of way and terminal prop
erty increases heavily.
It viii be held that the old-established
road can charge freight rates on the
basis OF a comparatively low value of
right Of, way and terminals The new
road would be forced to buy right OF
way and terminal property in a market
that took account Of increment, its in
vestments would be heavier than the
competing established road and conse-
Quently its freight would have to be
higher than the rates Of the old road.