The Washington times., 1911-02-24
THE RAILROAD RATE AD-
VANCES DENIED.

particular cases against the roads, bu
1t lays down policy which may b,
expected to guide the newly organized
commission in future Plainly, tn,
commission is determined to constru,
the burden of proof provision as tan
| tamOunt to a maximum rate act whicl
declares the present rates the maximum
ones, and assumes that they are prima
facIe fair and remunerative, and must
in no case be increased without affirm.
ative showing of necessity and the Ut,
rect order of the commission.
1t is easily the most sweeping prop,
ositiOn that the Federal regulatory
authority has ever laid down from the
beginning. Moreover, whatever may
have been the anticipations of disin-
terested people from study of the tes-
timony and arguments, there is little
doubt that the railroad people rather
expected a compromise decision that
would give them a considerable part of
that for which they had asked.
The commission simply finds that the
railroads have not made a case on the
facts presented The new law requires
that they carry the burden of proof
that they show that they need more
revenue, and that the proposed in
creases designed to produce it are reas-
enable. The railroads had protested
that unless they could increase their
earnings. their financial stability would
be injured. The commission finds that
they are earning dividends and increas-
ing the surplus at healthy rate. In
the case of group of six Western
roads, all dividend payers, it was
shown that on their own figures their
surplus accounts have been increase
considerably more than 100 per cent in
ten years.
As to the claim that they would ex-
perience difficulty getting money to
build bettcrments and extensions un,
lN79 lllN "NlC litC W lllCItdSt TdlpS,
the commission finds that this fear is
uniustiiied in. view of the fact that
they have sold S4,5OO,OO0,OOO of bonds
in the last ten years.
Finally, as to the railroad insistence
that the cost of living" sup
plies, etc.-has greatly increased in re-
cent years, the commission dismisses
this with the finding that supplies do
not cost more: that labor costs CON
siderably more, and that fuel costs
somewhat more. Apparently the COM
mission was moved, in pushing aside
this cost of living" argument, by the
fact that the railroads now so ex-
tensiveIy control the coal supplies of
the country.
Throughout, the tone of the decision
i, vigorous and distinctly hostile to the
contentious of the railroads. There is
even a charge of something very much
like bad faith when the decision OBJ
serves:
The primary impression of the COM
mission was that these increased rates
were impelled by the "higher cost of
living to the railroads: that they were
merely the OutgrOwth Of the increased
cost of supplies, fuel and labor, but no
sooner was the investigation under way
than these matters were entirely sub
Ordtnated. 1t became manifest that the
purpose of the carriers was not so much
to secure approval of the specific rates
as to discover the mind of the commits
sion with respect to the policy which
he carriers might in future pursue, and
to secure If possible some commitment
on our part as to a nationwide policy |
which would give the carriers a loose |
rein.
If the railroad representatives want
ed to ascertain the mind of the COM
they certainly succeeded. |
They got most direct and unqualified
expression of it.
Not too much weight must be at
tached to pessimistie comments on the
results of this determination. It is |
we'll to recall here that more than a
decade ago the British government
passed an act which had exactly the
same effect that this decision now has
on American railroads: it adopted their
rates, made under competitive
as prima facie just to them.
and provided that they should not be
raised without affirmative consent of |
the railway and canal commission. The
result has. been that few rates have
been advanced since that time; vastly |
more have been lowered. Yet the gen |
eral financial status of British rail |
ways, despite that they are capitalized
more than four times as high as Amer
can roads, has not suffered
Until few years ago the constant
tendency of railroad rates in this coun |
try was downward. Their it turned
upward, and the disposition has been
upward ever since. This is contrary to
The experience of most other countries
IN the same period. Increasing density
Of traffic was always regarded as a
INST ificaf fior for loyer rafaa NATL H.!