The Birmingham age-herald., 1911-01-03
Brief Is Presented |n Inquiry
 Into Freight Rates
REFORMS IN MANAGEMENT
MT. Brandeis Says That Railroads Should Not Raise Rates to In- crease Income But Manage
 Their Roads Better

Washington, January 2.-High stan- dards of efficiency, not increased freight charges are the paramount needs today of American railways. This proposition is the essence of the brief filed today with the interstate commerce commits sion by Louis D. Brandeis of Boston. counsel for the traffic committee of com mercial organizations of the Atlantic sea- board, in the investigation by the com mission of the proposed advances in freight rates by carriers in official classi- fication territory-that part of the coun- try east of the Mississippi and north of the Ohio and Potomac rivers.
 Railroad managers, MT. Brandeis con- tends, in an effort to meet existing needs should not look without but within. If their net income is insufficient" he says the proper remedy is not higher rates resulting in higher costs and les sened business but scientific manage ment. resulting in lower costs in higher wages and increased business. If their credit is impaired the proper remedy is not to apply the delusive stimulant of
 
 ganzations by introducing advanced methods and eliminating questionable practices. Thus they will maintain credit | by deserving it.
 | The proposed advance in freight charges 1 by the lines in official classification ter ritory would affect only the class rates. The total freight tonnage of the lines for | 1nnn oD1 this tonnage less than per cent moved under class rates, yet of the freight reve- nue of these railroads for the calendar year 1909 nearly P per cent (S103, 271 ,s23) was derived from class rates. These 1 rates govern in the shipment of over 1000 articles of commerce, including most of the necessities of life and articles of competitive commerce. The proposed in- creases vary from 8 per cent to 2s per cent, averaging approximately Is per cent. The Great Question
 l MT. Brandeis indicates that he con- siders the great question involved in the investigation to be the statement of President Willard of the Baltimore and Ohio, that the tendency of rates will be | to continue upward
 l That is that there will be a progressive | increase in rates.
 "As an alternative to the railroads practice of combining to increase rates,' | suggested MT. Brandeis. i've offer CO., operation to reduce costs. Instead of a dangerous makeshft we offer a construc- | tive poilcy-scientific management under which as costs fall. wages rise" | The consumer, he points out, should beware of the vicious circles of ever in- creasing freight rates and ever-increas- ing cost of living"
 The last places the burden of proof of the reasonablenes of the proposed ad- vanoes upon the railroads. Mir Brandeis maintains that the roads have failed ut terly to sustain their burden of proof; have failed so completely that the appli- cation of the railroads for approval of the new tariff should be denied. COntensiOn of Railways Tn a discussion of scientific manage ment," 1t is maintained that the conten- ton of the railways that the possibilities of economy in railroading have been practically exhausted, Is contrary to all human experience in other lines of ac- tivity Advances in the art of transpor- tation have been relatively few and some of those have been forced by law against strenuous opposition.
 It is indicated that scientific manage ment demands the separation of planning from performing; changes the relations of the management to the labor; demands preparedness; analytical study for the record of industrial performance and standardized methods and equipment. It the plant and equipment and of material It also increases the emoluments of both capital and labor. It eliminates graft too, in the opinion of Mir. Brandeis, In the purchase of supplies and in the cost of construction of work. Publicity, he ar gues, is an essential condition of free dom from graft.
 It is maintained In the conclusion of this part Of the brief 'that at least s1,- OOO,ooO day could be saved by the pur- suit of methods of scientific management" of American railroads
 Argument of Brandeis
 In response to the contention of 'the railroads that the proposed increases in class rates are reasonable. MT. Brandeis urges that no evidence was presented to sustain the contention that nc incerase in any class rate properly can be made without giving the shippers an opportuni- ty to be heard and that the pending in- crease was fixed without affording the shippers such an opportunity.
 He argues further that the injustice and inequality in the existing classifica- tions are such that no horizontal advance in rates could be made without great hardship to the shipper in communities affected; that the proposed increase seri- ously distorts on some railroads, the rela- tion of long distance to short distance traffic; that the imposition of the burden of the increased rates on class rates ap- pears to be unjust; that the proposed in crease would seriously contract the mar ket of the manufacturers and merchants of the Atlantic Seaboard; that 1t would seriously increase the cost of living and that 1t would reduce the volume of long distance tonnage and hence the expected gross revenue of the railroads. As to the