Omaha daily bee., 1910-04-14
Freirht Rate Problem.


raise the general level Of freight rates.
Their spokesmeh are reiterating
through every avenue Of reaching the
public ear reasons from their stand
point for demanding such a raise.
One writer says the cost Of living has
all but taken the profit out of the rail-
road business, and he sees in in
creased freight rates the only saving
clause. There are always two sides
to every question, but It will be diff
cult to Justify higher freight tariffs
by the assertion that railroad earn
ings are disappearing so long as the
reports of net profits continue to tell
their eloquent stories of annual stock
dividends.
OF the fact that the general cost
Of living has materially increased the
cost OF railroading there is no doubt.
The railroad employe who received a
maximum wage raise three years ago
of II per cent has to meet with 1t
the greater raise in food prices and
the railroads are confronted with the
clamor for again advancing wages
and, one writer argues, without cor
responding advance in rates. This
writer proceeds to show that along
with wages railroad equipment and
material have gone up from 20 per
cent for track spikes to 116 per cent
for cross ties and that locomotives
have jumped from $4,000 to $780,
900, freight cars from. $500 to $1,000.
He asserts that approximately 20 per
cent Of all gross earnings go into
wages and maintenance.
While some of these statements are
Undeniable, others are not. In the
first place, 20 per cent is more than
the average amount that railroads
pay out for wages and maintenance
altogether. In the next place, the To-
comotive that cost $12, 900 is not the
type which today costs 100000. nor
is the new 1000 car identical with
the 500 car. The new locomotive
and the new car are as much greater
in earning power as they are in price.
They are what makes possible freight
trains of sixty and seventy cars in
stead of thirty and forty. Consolida-
tion and concentration is the policy
of the railroads. not only in their
financial, but in their physical opera
ton as we'll. They cut off large out
lays in wages and maintenance, and
this is one way railroads have Of de-
! Tending themselves against the rapac-
ity of the higher-cost.living problem.
Enormous Increases in taxes is like
wise cited in this list of advances.
But it should be said that It has only
become fashionable of late to tax
railroads, partic ilarly in the west, as
they really should have been taxed
long ago. In many western states
they have only begun to bear their
share of the burden of taxation. The
increased taxes cannot be used with
as good effect as increased wages and
equipment in showing why rates
should rise.
Out of all this fog the observing
spectator may perceive one distinct
ray Of light yet which has been lost
sight of by the railroad spokesmen
and that is the handsome enlargement
of passenger earnings, which, while
the small SIDE of the railroad bust
ness, must be taken into account in
striking the balance. With the elm.
ination of the pass even in states with
the 2-cent fare, passenger revenues
have increased tremendously. Travel
improves under the impulse of gen
eral prosperity Just as does freight
traffic, which is reaching proportions
which, unless the railroads expend
vast sums for terminals, will swamp
them in the next few years.