The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1914-12-18
|. {. {. GRANTS RATE
INCREASE TO ROADS
Freight Charges May Be Raised,
Except on Coal and Iron Ore
Shipments,
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even more serious for the roads than
ports that were available earlier. This
TACT and the changed situation caused
by the war are made the real grounds
for the commissions change OF attitude.
Commissioner Harlan, IN his protest.
ing opinion, made his general pos ton
clear in a few words. He believes the
sailroads need more revenue and ought
70 have Il. But he notes that they have
been guilty OF many abuses and OBJ
jectionsble practices. the correction oil
which would add TO their net revenues.
The commission has heretofore strongly
ADVISED them TO strengthen their IMAM
cial posture by correcting these abuses
such as allowances to industrial
roads" tap lines. and the like, spotting
charges. etc.
Mr.. Harlan fears that granting the
advance now may remove the spur TO o.
been the most potent factor in elimi-
mating the abuses.
Clements Dissents Broadly.
commissioner Clements, dissenting
broadly, declares the railroads need OF
money is not under The Law tustif:ca-
ton for raising rates. The Law requires
the rates 70 be Just and reasonable
The burden OF proof is placed by that
law on the carriers 10 prove that rates
are not lust and reasonable and
Mr Clements protests that the roads
have made no effort TO demonstrate rae.
this: they have merely insisted that they
need the money.
Moreover, he protests that the car
riers' need of money has been iigure1
with reference TO the co-cailed book
values OF their properties. which have
long been recognized as generally I'M
trustworthy.
SECURITIES. he says. have been put
cut largely by those hold ng the theory
that there exists no relationship De
tween the securities of carrier and the
Teasonableness of the rates. Now. we
see these securities calling for increased
rates TO make them good.
But the appendix TO the commission
opinion presents tabulauons of data
concerning the financial operations OF
the roads, which determined the de-
cision of the commissions majority.
Thus II lie shown that the book value
OF property investment Of the roads IN
this territory was 81, go 000. 900 in 1900.
and is now IS So. oO0.0OO, an immense m
crease: while net operating incoPc has
Increased only SOC 6Ooeco TO s2so, Odo.OOo..
War Adds Difficulties.
With the nea earnings Of the roads
thus falling out OF step with the invest
ment in them, the European war adds
to their difficulties
The commissions general justification
for its action Is pretty well summarized
IN this paragraph from the majority
opinion:
The conflict in Europe will doubtless
create an unusual demand upon the
worlds loan fund Of free capital, and
may be expected TO check the flow of
foreign investment funds 10 American
railroads. II appears that our railroads
represent the bulk of European invest
nnent IN this country. The rate of in
terest-the hire of cspitsl-has risen
during the last decade, and may rise
SIN further. II is computed that In
the years 1915, 1916 and 1917 the carriers
In official classification territody must
arrange for the payment or refunding
OF securities aggregating over 500.0o0.
GO True, the representa- 'ons OF the
carriers in the 1910 cases. that without
the increases then sought their credit
must totally vanish, proved strangely
az variance with their subsequent eN-
I,erience In the borrowing of many hun
dreds OF millions. But We DO not doubt
that the financial problems of the car
r,ers have been made much more acute
ny reason OF the war and II we are
10 set rates that will afford reasonable
remuneration to these carriers. We must
give consideration 10 the increased hire
OF capital as well as to other increased
costs -