Evening star. [volume] (Washington, D.C.) 1854-1972, 1908-07-18

classification for increase in freight
rates." said Chairman Martin A. KNAPP
of the interstate commerce commission
eff there rs to be such increase. may be
found. if at all. only in the fact that in
creased cost of operation and maintenance
of railroads has reached point where
them is not possible from the revenue they
now receive.
Three factors enter into the fixing of a
rate schedule. Careful consideration OF
them all is necessary in determining
whether rates are reasonable or not.
1T is well known that the fiscal yeal
ending June 30. 1907. marked the highest
point ever reached in the matter Of trans
portation in this country. Every road
was taxed to the utmost of its capacity
which means that further increase with
the then existing facilities is an impossi
bility
Money Needed for Expansion.
The country does not stand STILL Each
year marks an increase in effort and out
put. and therefore an increased demand
for transportation facilities. If the highes,
point of capacity was reached then II
stands to reason that TO meet the In
creased demand for the years that follow
there must be an increase in those facili-
ties commensurate at least with demand
for them. To provide new facilities takes
money.
In order to invite the investment OF
capital a railroad must be able to show
that it's reyNnues pay costs of operation
and maintenance, costs of new faclntles
as needed and fair certain profit on
money invested. The capitalist is not sat
isfed to know that ii is possible for a
road to do this. He must be assured that
it is certain 10 ID = at II times.
Wages have Zen Ittlt-cod number
OF times by the T, u sa1s in recent years
while freight rat.r :Ns:e practically re-
manned unchanged. Tie wIgeS II en-
ployes form two-thirds of the cCst Ct OPP
Grafton and maintenance = ra'fosd
and this cost may be fairly estimated at
two-thirds it's revenue. Now 1t stands
TO reason if wages are increased or 10
per cent there is big increase in the
cost of maintenance and operation of the
road In just the degree that this cost is
increased is lessened the opportunity of
the road to provide new facilities and
10 bring the old facilities up to fixed
satisfactory standard.
Three Points to Be Considered.
1T is q matter of public interest, first.
that good wages be paid railroad en-
ployes; secondly. that present transporta-
standard. and thirdly, that new facilities
be provided TO meet ever-increasing de-
mand for them.
These three factors affect the schedule
OF rates. But in addition to these it is
also necessary TO the successful operation
and maintenance of railroad that its
revenues be not only sufficient to provide
for these three factors, but. in order to
induce the investment of capital in the
railroad. the revenues must also be suf-
fcient not only to promise. but to abso-
lutely guarantee a fair profit on money
invested
Inasmuch as the cost of wages has
raised considerably in many instances
during the past year or SO. and inasmuch
as the cost OF equipment has also in
creased. while the rates are practically
now what they were before these in
creases occurred. it is not unlikely that
some roads may have to Increase not ALL
perhaps, but some of their freight rates
There is nothing. so far as ] know, to
indicate general increase of freight
rates. Those who profess TO know saw
there is ground for a recasting of freight
rates. especially on certain lines of mer-
chandise which ought TO be charged more
and which can be charged more without
an appreciabie burden upon the consumer
SO that the railroads may fairly hold their
own.