Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1914-12-18
RAILROADS OF EAST
GRANTED INCREASE

The carriers are suffering now more
from want Of freight to carry than for
higher rates." he said ut would not
seem to be out of line with ordinary
prudence and conservatism prevailing In
other lines of industry, IL the carriers
had undertaken to meet this apparently
temporary situation as have others"
FINDS SITUATION CHANGED.
THE findings Of the original report are
modified In the light OF the changed sltu-
alton as disclosed" the Commission de-
Clared
Increases on rates on cement, starch,
brick, tile, clay and plaster, denied in
the former application. were granted to-
day under certain limitations.
IL the various increases involve a
change In the relationship under the
"long and short hauI' rule between inter-
mediate points and more distant points
outside of official classification territory,
"rclef from the fourth section of the act
must first be secured on regular applica-
ton"
"The conflict in Europe" said the COM
mission, Twill doubtless create unusual de-
mand upon the worlds loan fund OF free
capital and may be expected to check
the flow of foreign investment funds to
American railroads
RATE or INTEREST HAS RISEN.
ut appears that our railroads represent
the bulk of European investment in this
country. The rate OF interest, the hire
of capital, has risen during the last
decade and may rise still further.
at Is computed that in the years 1915
TO 1917 the carriers must arrange for tho
payment or refunding OF securities aggre-
eating over S50O,000.000
while we differ as to the relative inn
portance to be attached to the various
considerations presented, we agree in the
conclusion that BY virtue of the condi-
tions obtaining at present II Is necessary
that the carriers revenues be supplement-
ed by increases throughout official classi-
fcation territory.
whenever the consequences of the war
may prove to be we must recognize the
fact that 1t exists, the fact that II is n
calamity without precedent, and the fact
that by 1t the commerce of the world has
been disarranged and thrown into con-
fusion.
''The means Of transportation are fun
damental and indispensable agencies in
our Industrial life, and for the common
veal should be kept abreast OF public
requirements
OPERATING REVENUES DECLINE.
'For the fiscal year just ended the net
operating revenues as shown by the car
rlers are lower than was estimated or
anticipated when the original report was
issued. Not since 1905 have the net oper-
ating revenues been so low as In the fiscal
year ending June last From whatever
comparative standpoint used, the net oper-
atins revenues of the last fiscal year
must be regarded as unduly low.
while the gross revenue in that year
declined only about 3.4, per cent, the net
revenue shranli approximately III per
cent.
"The fact remains that, II the increase
in depreciation and betterment accounts
in the last fiscal year over the average
for Ave years, were added to their net
operating income for the last year. the
result OF operation would still fall far
below a fair return upon the amounts
carried upon the books as an invest
ment in property.
THE like may be sed as to the recent
enlargement of expenditure on roadway,
newer type steel cars and locomotives.
"The testimony shows that while some
maintenance is being deferred. other
maintenance. deferred during the last
fiscal year, is now being made, and that
the expenditures therefore during the
months OF July and August measured up
TO the level OF recent years. The testi-
mony also shows that transportation Is
being reduced through the laying off OF
employees and cancellation of trair
service.
FEARED MENACE TO PROSPERITY.
"It was urged on behalf of the carriers
and investment bankers that the war in
Europe has created a condition which
renders the dlminution of the carriers
net income a menace TO the prosperity OF
the country: that the war has placed an
added strain upon the credit OF carriers;
that rates OF interest will risei that a
large volume of railroad securities is held
abroad and would be dumped upon the
American markets which would not be,
able to absorb them without great fall
in price
with some OF these considerations we
have as a commission nothing to do.
I'VE do not doubt that the financial
problems of the carriers have been made
much more acute by reason of the war;
and II we are to set rates that will AFFORD
reasonable remuneration we must give
consideration TO the increase hire of cap
ital as well as to other increased costs.
s. ORIGINAL REPORTS DEFECTS.
"The suggestion made in our original
report, of methods whereby to increase
net revenue. were not susceptible OF be-
Ing put into immediate operation or cal.
culated to produce immediate financial
results The period which has since
elapsed has been entirely too short for
either purpose. Some testimony was Of
fered on what had been done or under
taken In line with these suggestions, and
estimates were made by trafiie officials as
TO the annual yield to be expected. These
estimates were not based upon any ac-
counting computation and can affoFd
little guide as TO what the results will
prove TO be.
''The original report. besides the APP
proving OF rate increase. suggested ten
sources OF additional revenue.
THE present report. recognizing the
existence OF a new situation since July
%. aequlesees IN a territorial extension
OF the relief granted by permitting the
carriers 10 fle tariffs providing. with GER
tain exceptions. for horizontal rate in
ereases IN official classification territory.
1T Is expected that the constructive
work suggested In the original report for
the purpose OF conserving and augment
ing the net revenue OF the carriers gem
orally will be carried forward without
Interruption
The Commission did not grant increases
on rail-lake-a and-rail and lake-and-. all
rates, It said, because the rail carriers,