New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-12-19
Continued from page I

an intelligent revision of rates is shown
BIZ the results obtained in New England
while this proceeding was pending. me
New England carriers sought approval
in this case of an increase only IN the
rates on traffic moving between that
territory and other parts OF Otlclai
Classification territory. They did not
propose general 8 per cent increase
in their freight rates. In other words,
the New England lines have vo unfairly
pursued the only rational and reason
able course 10 augment their revenues,
this being the course urged upon the
Central Freight Association lines in
our original report.
"By following the suggestions made
in the origina, report the carriers could
undoubtedly secure more additional net
income than the amount estimated TO
accrue under the proposed horizontal
rate increase and far more than can ac-
crue to them under the relief now &C
corded in the supplemental report.
aside from the objection to our
legal right and power, which perhaps
should be regarded as conclusive, there
are grave doubts whether the facts as
sumed by the carriers, bankers and
others at the further hearing are being
verified by the progress of events. The
apprehension of the bankers and
Others, most strenuously urged at the
tcrther hearing as reason for Cr t.
ny increased rates at once, YVES that
,,1erwi,s our railroad securities held
abroad would, in consequence of the
w., be dumped upon our mar, IS with
disastrous results not only to the rail-
roads but to business interests gener
ally.
"This apprehension the bankers ap-
parently have concluded to have been
so clearly unfounded that, in advance
of any decision by the commission upon
the carriers contentious at the further
hearing, the great financial interests in
control of such matters have not only
caused the stock exchanges, which were
closed at the beginning of the war, to
be reopened, but have now caused the
removal of all restrictions upon trad
ing in such securities, the minimum
price limitation having been with
drawn.
ut also appears from public sources
that since the further hearing interest
rates, instead of increasing as conf
IDENTIFY predicted By the experts VINO
then testified, have shown downwarC
tendency, and since the date of the
original report the average operating
ratios Of the lines in Official Classifica-
tion territory have shown a marked i'm
provement. II at any time hereafter it
should definitely appear that the car
riers require immediate temporary re-
lief by reason of the war and its eff
fects it could be obtained by refiling
of the tariffs heretofore disapproved,
and in that event | should have no diff
fculty in regarding it as a proper exer-
else of our discretion under the act to
decline to suspend them pending inves-
tigation.'
Commissioner Clements's Opinion.
Commissioner Clements urged that
the function of the commission was to
establish rates that are Just and rea--
sonable," without substantial regard
for exterior conditions which might be
either temporary or permanent.
"If the basis of the conclusions of
the majority of the commission sane
tioning these rates in trunk line terri
tory is sound" he says, "and points
to the rule of action for the future, the
burden placed by the law upon the car
riers TO justify increases IN rates is
indeed made light and easy TO carry,
especially when by concerted action
group of carriers, some strong and
some weak. simultaneously propose to
increase the great body of their rates.
There is and has been no adequate
control Of the issuance of stocks and
bonds, and they have been put out
largely by those holding the theory
shat there exists no relationship be-
tween the securities of carrier and
the reasonableness of its rates. Now
we see these securities calling for IN
creased rates to make them good.
"If now to strengthen and maintain
the credit OF the carriers. regardless OF
tn, causes of its exhaustion or impair
ment and without the application OF
the usual tests Cf reasonableness, these
increases as justified, he it seems
to me that we are only at the begin
ming of what | fear v'ill be train Of
demoralizing results, disappointing ant
embarrassing to all Concerned. II IS by
no Leans certain that it would not. in
the long run be cheaper to Il public
to guarante. the bonds of the weak
road. unable to meet their obligation {,
rather than to try to take care Of them
by incre led rates, which inure to tho
st .ng roads as we'll as the weak.
"Up to the beginning of these efforts
70 increased rates there had for many
years been a steady and constantly in
creasing percentage Of carriers paying
d. yidends as ,,ell as in the rate of div
idendS paid. IL appears evident that
carriers are suffering NOR just now
for want Of freight 10 carry than for
want Of higher rates. II is jus' as safe
to prophesy that this is a temporary
condition as TO prophesy concerning
future rates of interest and the dump
ing Of foreign-held American rail ay
securities on our investment markets.
II would not ceem to be Tut of line
with ordinary prudence and conserv-
atism, prevailing in other lines of in.
TRY, if the carriers had undertaken
to meet this apparently temporary sit
uatio. as have others. Such a course,
il seems to me, would have contributed
to their credit, rather than the course
have nursued -