Evening journal., 1914-12-18
RAILROADS Win
five PER Cent.
RATE increase
Continued From first Page.

OOullnutQ. FIOul HlISL rage.
tions obtaining at present, it is neces-
sary that the carriers revenues be sup
plemented by increases throughout Off
cial classification territory. Whatever
the consequences of the war may prove
to be. we must recognize the fact that
it exists, the fact that it is clamity
without precedent and the fact that by
it the commerce of the world has been
disarranged and thrown into confusion"
"For the fiscal year just ended" the
commission continued, "the net operat-
ing revenues as shown by the carriers
are lower than was estimated OF antici
pated when the original report was is
sued Not since 1905 have the net oper
ating revenues been so low as IN the
fiscal year ending June last. From what
ever comparative standpoint used the
net operating 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 shrank approximate
ly 17.7 per cent.
THE fact remains that If the in
crease in depreciation and betterment
accounts in the last fiscal year over
the average for five years were added
TO their net operating income for the
year, the results of operation would
still fall far below a fair return upon
the amounts carried upon the books
as an investment in property.
"The like may be said as to the re-
cent enlargement in expenditure on
roadway newer style 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 testimony also shows
that transportation is being reduced
through the laying off of employees
and cancellation Of train service.
at was urged on behalf of the car
riers and investment bankers that the
war in Europe has created a condi-
ton which renders the diminution of
the carriers net income a menace to
the prosperity of the country; that
the was has placed an added strain
upon the credit of carriers; that rates
of interest will rise; 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.
1--WE do not doubt that the financial
(, problems of the carriers have been
I l.. 90 hrr nf
/ the war and if we are to set rates
that will afford reasonable remuner-
alton, we must give consideration to
the increase hire Of capital as we'll as
to other increased costs.
'The suggestions made In our ori-
ginal report, of methods whereby TO
Increase net revenue,i we're not sus-
ceptible Of being put into Immediate
operation or calculated to produce i'm
Z mediate financial results. The per-
iod which has since elapsed has been
entirely too short for either purpose.
. Some testimony was offered on what
had been done or undertaken in line
with these suggestions and estimates
were made by traffic officials as to
the annual yield TO be expected. These
> estimates were not based upon any ac-
counting computation and can afford
little guide as to what the results will
> prove to be.
"The original report, besides the ap-
proving Of a rate increase, suggested
ten sources of additional revenue.
"The present report, recognizing
the existence of a new situation since
July 20, acquiesces in a territorial ex-
tension Of the relief granted, by per-
mitting the carriers to file tariffs pro-
viding, with certain exceptions, for
horizontal rate increase in official
classification territory.
1T is expected that the construc-