Omaha daily bee., 1908-11-19
UNDER TwO-CENT FARE LAWS.
Instructive Facts Gathered from Rail-
road
Springfield (Mass.) Republican.


Springfield CMassl Republican.
Many of the railroads currently making
their annual reports have been operating
during their last fiscal year under maxi
mum 2-cent fare laws enacted by several
states. 1t may be of some interest to note
the revenue effects of this reduction in
passenger fares during a time when bust
ness depression has adversely affected rail-
road traffic in general.
The Illinois Central company had to re-
duce its ordinary fares from 8 to 2 cents a
mile, and the report for the fiscal year
ending June 30 last states that, partly on
this account and partly because Of business
depression, passenger revenue declined
from the previous year IL per cent. But
the loss in freight revenue was 7 per cent,
as a result Of business depression. How,
then, does it appear that lower passenger
rates caused the much smaller loss in pas
senger revenue? The revenue decline might
nave been much greater in the passenger
department but for the lower and more at
~tractive fares. The number of paying pas
sengers carried declined less than one-half
Of l per cent, while tons of freight car
ried declined SO per cent.
The Chicago & Alton road, under the
same circumstances, suffered a reduction
In freight revenue of about 7 per cent and
a reduction in passenger revenue OF only
about 5 per cent.
The Baltimore & Ohio report notes a
considerable reduction in passenger rates
enforced by legislation in West Virginia,
Ohio, Indiana, Illinois and Pennsylvania
and says that while the number of pas
sengers carried increased 1906, 1858 over
the previous year of prosperity, the in
crease was "unaccompanied with any cor
! HaaHAn1anr n,a...na - ~
ertheless the roads freight revenue de-
clined 10 per cent, while passenger revenue
declined 10 per cent, while passenger rev.
enue fell off only 81 per cent. Is it true,
then. that the Baltimore & Ohio was fis-
cally injured by the lower passenger rates?
President Baer of the Reading railroad
reports that that company has not as yet
succeeded in bringing its case against the
Pennsylvania 2-cent fare law to a judicial
determination, and so has been operating
since September Of last year on a 2-cent
maximum for passengers. Still, he is
obliged to report that while revenue from
merchandise traffic decreased p per cent
during the fiscal year to June 80 last, the
passenger revenue fell off less than 3 per
cent. 1t would seem to be a good thing
for the company to withdraw its suit and
let the 2-cent law stand.
The president of the Chicago, indianapolis
& Louisville railway comments, in his an
nual report, upon the bad effects of the
Indiana 2-cent fare law, in that, while the
number Of passengers carried increased
during the year, there was a decline in
passenger revenue, But he fails to state
that while passenger revenue decreased
about 7 per cent, freight revenue at the old
rates fell off some 10 per cent. He says
that there would have been an increase in
passenger revenue had rates been the same
as before; but this is to suppose the mum.
Der Of passengers would have been the
same II the rates had been higher-a sup
position that cannot, OF course. be enter
tanned.
Some roads, operating in whole or part
under new accent fare laws. report actual
increases in passenger revenue agains.
heavy losses in freight revenue on the
basis of the old rates. II may fairly b,
asserted, therefore, that the railroads hav,
been benefited by the lower passenger rate.
forced upon them against the will OF thell
managers. and what shall then be said o.
the chsracteF OF this management for pro.
gressiveness and enlightenment? Appar.
entity the railroad companies should lool
well into this matter Of the effect of lowel
rates on passenger traffic before decidinl
to increase freight rates in order 10 i'm.
prove their Tevenuef