The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1914-12-19
Coal, Coke and Iron Are Elk.
empted From Operation of
New Schedule-War Cited
as Cause For Raise
COMMISSIONER CLEMENTS
DISSENTS FROM RULING
Findings Of Original Report
Mo dified in View of
u, Changed Situation"


years fight OF the eastern railroads
tor general advance of Ave per cent
in freight rates was won with the aid
OF the European war, today, when the
interstate commerce commission al
lowed the increase with few excep-
tons. The commission made 1t plain
its action was taken to relieve the
commercial crisis brought on by the
world war.
The exceptions from the increase
Will include rates on bituminocs coal
aud coke, anthracite coal. and iron
] ore, and rail-lake-and-rail. Lakeland
rail, and rail-and-lake rates.
A fiat five per cent increase is al
lowed on joint rates between official
classification territory--the east on
one hand, and southeastern territory
TO southwest and points on or east
OF the Missouri river, on the other;
Interstate rates to and from New Eng
land from and TO points in trunk line
or central freight association-mid-
west-territory; on rates TO and from
| New York; ana TIN oughout official
classification" or eastern territory.
The increase will affect practically
every railroad in the United States
| by adding approximately S50,000,000
annually to their combined revenues.
The railroads have stated that such
. additional revenues would strengthen
their credit and give stability to their
securities sufficient TO enable them
TO weather the financial gale OF the
val.
The commission scored the rail
roads for misrepresenttng conditions
in their previous applications for in
ereases. The representations of the
carriers In the 1910 cases, that with
out the increases their creoSt must
vanish, proved strangely at variance
with their subsequent experience In
the borrowing OF hundreds OF mil
lions" the commission said.
But We do not doubt" the com
mission continued. that the financial
problems of the carriers have been
made much more acute by reason or
the war. and IL we are TO set rates
that will afford reasonable remnnera-
tfon 10 these carriers, We must give
consideration 10 the increased hire
OF capital as we'll as to other In
creased costs"
The opinion was written by Chair
Imam Harlan. Commissioner j. c..
elements dissented. taking the view
pf Louis d. Brandeis. counsel for the
commlssion. that the advance rate
was simply "a war tax for the exclu-
five benefit OF the railroads. Glenn
-nts seriously doubted the legality OF
he increase.
The carriers are suffering now
more from want OF freight to carry,
than for higher rates" he said.
Generally the commission held:
Joint rates between official CLASH
ication territory (the east on the
pne hand and southeastern territory.
he southwest and points on or east
I1f the Missouri river on the other,
nay be increased not to exceed five
er cent OF the division OF the rate
hccruing TO the carriers in official
Justification territory. II these in
reases involve a change in the rela-
ionship under the long and short
haul rule between intermediate points
nd more distant points outside OF Of
icial classification territory, relief
rom the fourth section OF the act
must first be secured on regular APP
blication."
Effect Of War.
THE conflict In Europe said the
Commission. will doubtless create I'M
Usual demand upon the worlds loan
fund of free capital and may be eX-
bected to check the flow OF foreign
Investment funds TO American rail
loads. II appears that our railroads
represent the bulk of European in
cement in this country. The rate
bf interest-the hire OF capital-has
isen during the last decade and may
Use still further. IL is computed that
Ia the years 1915 to 1917 the carriers
hust arrange for the payment or re-
Funding OF securities aggregating over
a 500, 000, 900.
while we differ as TO the relative
importance to be attached 10 the va
loue considerations presented. We
gree in the conclusion that by virtue
ID the conditions obtaining al present
Il is necessary that the carriers rev.
nues be supplemented by increases
throughout official classification ter
litory. Whatever the consequences
the war may prove TO be, we must
recognize the fact that il exists, the
act that IL Is a calamity without pre-
edent. and the fact that by IL the
ommerce OF the world has been disar-
anged and thrown into confusion"
For the fiscal year just ended,
bio Commission continued, the net
perating revenues as shown by the
arriers are lower than was estimated
M anticipated when the original re-
1ort was issued Not since 1908 have
le net operating revenues been so
DIV as in theIhscal year ending June
tstS From whatever comparative
tandpoint used. the net operating rev
nues OF the last fiscal year must De
egarded as unduly low.
Revenues Low
While the gross revenue In that
ear declined only about 3.4 per cent
ne net revenue shrank approximately
"a per cent.
The fact remains that II the In
rease I'm depreciation and better
aents accounts i'm the last fiscal year
Yer the average for five years were
Added 10 their net operating income
Mr. the last year. the results OF op-
ration would still fall. far below
AZ return uponeth amounts carried
pom the books as an investment IN
Property.
THE like may be said as to the
.cent enlargement in expenditure on
badway. newer type steel cars and
locomotives. M
erhe testimony shows that while