New-York tribune., 1911-02-24


cial Classification territory; bat Com
missioner Prouty, who wrote the OPINION
IN the Eastern case, says:
This argument does not appeal TO US
We doub. the practical difficulty sue'
nested (t1at Of obtaining by loan sum
cient money 70 finance the rcads), and
were II true. it is not apparent that tne
GENERAL public should stand responsible
for the mistakes which have been mace
in financing these railroad systems.
Both the Eastern and Western cases
were brought 10 public attention in the
,p-jnr Of 1910 Just before the enact
ment Of the existing interstate commerce
law. which. in part. became effective on
jane is, 1910. the railroads Of Oflcisi
classification territory. forty-one IN all
and those Of Western Trunk Line Asso-
cistion territory fled with the Interstate
Commerce Commission tariffs making
genera increases in their freight rates
Til, tariffs hlcd by tho Eastern lines
increased the frst class rate between
Kew York and Chicago points 10 cents a
hundred pounds. from 10 cents to 9o
cents. and made proportionate advances
IN the other fye classes. Some advances
also were made on commodity rates, but
the great bulk OF the commodity tonnage
of freight was not disturbed. The pro-
,osAd advances affected approximately
Is per cent Of the total freight tonnage
Annroximately' the same amount OF
tonnage was affected by the increases
nyonosed by the Western lines, but the
lass rates were rot affected IN any way
Commodities alone were Increased the
average advance on about one hunoreo
end eighty different articles being sub
stantiallv 10 per cent, the increase vary
ing from about 4 per cent in some cases
20 so per cent in others
Result Of the New Law
AZ the time the tariffs were FLED the
commission had no authority to suspehu
advances in rates pending an investisa-
,ion of their reasona ableness, but after
conferences with the commission ana
with President Taft the railroad ON
c,als agreed voluntarily TO suspend me
Is, the present law was passed glFine
the commission power 10 suspend rates
Later the proposed tariffs again were
suspended voluntarily, first until Novem-
her / and the until February ], 1911.
The commission found Itself unable
physically 10 finish consideration OF the
cases bv February 1, and again the rates
In finally Withholding It's approvai OF
the proposed increases the commission
holds-and it's decision in both the East
ern and Western cases was unanimous
that the carriers did no. in the proceed
ings sustain what the law imposes upon
,ber-tbat is. the burden Of proof that
absolute necessity existed for the ad-
vances proposed.
In his elaborate discussion Of the East
ern case Commissioner Prouty says that
",hA railroad rates Of this country have
not been constructed IS a rule upon any
scientific basis, and this IS especially true
of the interstate rates
He points out that Tetes~have tec1 put
into effect without special inquiry as 10
the amount Of revenue they might pro-
duce or as 10 the burden the particular
commodity affected by the rate ought 20
bear
1T might not follow" the opinion says
Owen though We were of the opinion
that those carriers -1ere entitled to ad-
ditional revenue, that they oJgnt 70 opT
tain it from an advance of these par
ticular rates"
Commissioner Proutv discusses al
length the question whether the defeno-
ant carriers are justified at this time IN
demanding additional revenues from the
|, public for the services which they are
rendering. In answering the question in
the negative. ne comedies that the in
crease in the labor accounts Of the roads
in the last year has been from . 20 ,
per cent OF their payrolls, aggregauns
for the forty-one lines approximately
$4,000 900 a year The opinion holds,
however, that "the carriers have not, by
showing that the increases in wages
more than equal the Increases In rates,
made out the reasonableness Of the pro-
posed advance in the rates because 1t
is indicated, 1T appears that during the
year ending June 80 1910, the net earn
ings Of these railroads aggregated SOL
100000 more than during the year 1905" "
While il is admitted that this Is not con
elusive against the prcpriety of the ad-
vances, 1T does show that we cannot
conclusively presume from an increase
in operating expense that there should
be a corresponding increase in trans
rortstion charges.
Greater Economy Demanded.
II Is laid down as a principle that mo
general advance in rates should be per-
ritted until carriers have exhausted
every reasonable effort toward economy
in their business" and the opinion is
expressed that railroad operators nave
not given to this subject the attention
which il deserves.
After considering fully the question Of
Just how far freight rates properly can
be increased on account Of the tex
tremely expensive Improvements re-
quired by the passenger service cf the
lines and analyzing thoroughly the fnan-
cial end operating methods OF several
important Eastern railroads, including
the Pennsylvania, the New York Central.
the Baltimore & Ohio the Lake Shore
and the Michigan Central. the opinion
says, in conclusion
1t seems rlain that they have not sus-
tanned the burden which the statute casts