The Washington herald., 1914-10-24
RaiIroads and High Cost Of living.


nearly everything than he formerly did 1t is the
experience that runs through all economic, in
dustral, and social life, and no seems to escape
its inexorable demands In common, with all the rest
of u.s. has laid its hand upon the treasures Of the
railroads. but by peculiarity of the relationship OF
government to railways in contradisnction to other
great industries they have been made to feel its
effects to the greatest extent of all Government
serves to itself the right to limit the extent to which
railroads shall make the of living high to Others
but has not given the railways the compensating right
to limit the extent to which others shall make the
cost of living high to them. Nor has government
given consideration to the several processes by which
the cost of living made high for the railroads. Nor
has it. in protection of the railroads, sought to re-
strain such processes
The general proposition of higher prices in their
bearing on the railroads has been admirably stated
by Commissioner, Daniels in his minority opinion in
the rate case while the particular experience of the
railroads has been forcefully set forth by Howard
Elliott, chairman of the New Haven, in his annual
report TO the shareholders of that line This is what
Mr.. Daniels said:
THE worldwide phenomenon of rising prices is
by this time no novelty Since 1906 the average rise
in the worlds price level is estimated by competent
statiscians from 80 to so per cent. 1t has mir
r6red itself in the rising cost of living; it has evoked
and most properly advance in wages and salaries; it
has conceded with increase in the nominal rate OF
interest where part of the interest so-called is but
compensation for the anticipated depreciation of the
capital sum later to be repaid This rise in the price
level must eventually be reconed with in railroadng
For time its effects may be masked by adventurous
increases in the volume of traffic but this temporary
relief in its very is uncertain and sooner or
later the difficulty is to reappear. For time 1t
NAV be crcumvented by extraordinary economies,
but in its nature it is memorable. 1t must be faced
not trihed with 1t is hardly an adequate remedy to
accord to carriers relief only when their returns
have reached the we-ngh desperate level now shown
in central freight association territory Even before
this inadequate return is evidenced higher rates are
warranted Such a solution of the present case would
have done no less than justice to the carriers and
would have promoted the welfare of the community
they serve.
"a living wage is necessary for a railroad as
for an individual A carrier without sufficient re-
turn to cover costs and obtain in addition margin
OF profit large enough to attract new capital for eX-
tensions and improvements cannot permanently
render service commensurate with the needs of the
public Eventually it may come about that railroads
will be owned and operated by the government That
is matter of public policy, which it is not the
province of this commission to consider. But that
such departure from the present policy of private
ownership and corporate operation should be ma
teralv hastened by the reluctance of capital to
invest in these properties would to be a grave
Indictment of our present system OF regulation and
control"
Here is the high cost of railway living stated
! by Howard Elliott:
1t is fair to point out certain conditions which are
national in their effect on railroad net income, con
ditions over which neither the New Haven COM
pany nor any other company, has any effective con-
troll.
Some of these conditions are:
! Increase in rates of interest.
! Increases in rates OF pay.
Increased costs due to changes of working hours
and working conditions
The so-caIled ful-crew law, which makes neces'
sary the employment OF extra and unnecessary men
The Federal valuation of railroads.
The great increase in accounting and special re-
ports to numerous public authorities.
/ The increase in taxes.
i The increased demands for luxurious passenger
facilities, both train and station.
Stationary or falling rates.
Inadequate pay for mail and parcel post.
Increase in rates of pay and rates OF interest a.
compared with 1908 shows an increased annual charge
OF more than S8oOoOoo The various governmental
reouiremeuts mean charge of at least 100000
wear The taxes in 1914 were SIIS2S2952 more thar
in Ioo3 The underpay for carriage OF mail matte
represents more than $4,000 year in gross earn
ings Much passenger train service Is furnished la
heIo anv fair estimate of the cost for the particular
service rendered Without allowing for this loss OF
commemorative passenger trans. the foregoing addi
tional burdens compared with 1908. represent ne
loss of at least 100000 year; loss greater thai
the annual interest on the cost of all outside prop
The conditions which Messrs Daniels and Elliot
describe were the ougrowth OF times of piping peace
The war has accentuated all of them