The Washington herald., 1915-08-12
4
ADVANCE RATES
DENIED BYL. {. {.
Only Few of Increases Asked
by Western Railroads
Allowed.
DANIELS HOTLY DISSENTS
DANIELS HOTLY DISSENTS
Scores Colleagues. in Minority Opin-
ion. for Not Meeting Question of
Adequacy of Revenues.

lOT IilCItdStu IT6lSHl
handed down yesterday. was disappoint-
ing to railroad men. The commission
granted some relief. but it was less than
one-quarter of the amount sought.
The Western railroads, on the ground
that their revenues were insufficient.
| asked for increases on certain commodi-
ties which would yield s7,604.OOo additional
each year. The commission itself does
not say how much the advances allowed
in yesterdays decision will mean. but
Commissioner Daniels, in a strong dis
senting opinion, holds that the revenues
Of the roads will be augmented by not
more than s. 100000. This increase will
amount to only about one-fourth of ! per
cent of the total freight revenues Of
these carriers for 1914, while the appli-
cation, called for advances amounting to
about IL per cent of the total revenues
of this character.
Charged with Inconsistency.
The most disappointing feature for rail-
road men was that the commission failed
TO express any opinion as to the ade-
quacy or inadequacy of the present reve-
nues of Western roads. This was the
fundamental point at issue. and the COM
missions failure to meet it was made the
occasion for a notable attack by Com
missioner Daniels in his dissenting opin-
ion. Never before has a member Of the
commission expressed his opinion so
bluntly in regard to the findings OF the
majority He charges the majority with
Inconsistency and with failure to meet
coura geously this question.
In his decision Mr.. Daniels calls for
the criminal prosecution of men re-
sponsible for the wrecking of railroads,
naming the Rock Island and the Frisco
as examples of financial mismanagement.
Mr. Daniels declares that the time has
come to make guilt personal and no long
er to judge the question of railroad rates
by considerations of individual instances
Of corporate mismana cement.
Commissioner Daniels contends that
the majority of the commission. in fail
ing to meet the question of the ade-
quacy or inadequacy of railroad reve-
nues, takes a backward step from its
record in the recent Eastern advance
rate cases In the latter case the COM
mission held that ''the net operating in
come of the carriers in official classi-
flea ton territory. considered as a whole,
is smaller than is demanded in the pub
lie interest"
Commissioner Daniels contends that
the showing made by the Western roads
was more unfavorable even than that
made by the Eastern carriers Yet. the
commission. as regards the Western car
riers, contents itself" with merely find
ing as follows:
THE relative profita bleness Of their
business taking the roads as a whole.
has declined since 1901, and the main
cause effecting this result has been an
increase in expenditures not offset by
IN increase in receipts"
Views of Majority.
The commission holds in its majority
report:
From the financial evidence we find
that the credit of these carriers as a
whole has not suffered an impairment
not common to comparable industrial
enterprises; that in common with other
borrowers. corporate and govern
mental. these carriers are required to
pay on the average a higher percent
age than heretofore for the use of cap
ital: that these carriers in common
with comparable industries generally
are paying higher prices for many ma
terials and higher wages for most
kinds of labor; that these carriers in
meeting increased costs with increased
prices for service are subject to GER
tain disabilities not similarly encount-
cred by many other industries: that the
relatively equal depression of the car
riers' credit with credit generally is
not evidence of the adequacy or inad-
equacy of their present net revenues;
that their net corporate income can
not be accepted as a measure Of the
adequacy or inadequacy of present
rates: and that the increasing percent
age of bonds to their total capital OBJ
legations indicates a growing disincli-
nation TO invest in their stocks and
growing unwillingness to accept the
prospect of dividends as a sufficient in
proprietorship.
n he rnenfinned the
possibility that particular carriers by
reason of financial mismanagement re-
Elected in their operating methods have
been uneconomical and wasteful in eN-
penditure, and have thus unnecessarily
increased their operating ratios. 1t
does not appear that any uniform re-
lationship can be traced between the
present level of the operating ratios of
carriers whose financial administration
has been culpable and of the remain
ing carriers. Similarly, instances OF
notable increases in the operating ra-
tio do not seem to be confined to roads
such as the Rock Island or the Frisco.
The negative conclusion reached in this
connection is but confirmatory of the
fact that the general increase in the
operating ratio is traceable to deep
seated underlying causes which have
affected carriers generally through in
creased operating costs"
Increases Roads Asked.
Commissioner Harlan also dissented.
holding that the railroads were entitled
to the increase.
The increases which the railroads
asked. IL granted. would have yielded
revenue on the following items:
Grain and grain products, $2,sic. 81: live
stock, 81 ,50o. 900: packing-house products
and fresh meat. s., 5000 hay and straw.
sl75 900: broom corn. 1.s23: coal. $l.2s6.0D
fruit and vegetables. $134.000; rice, $4,000,
and import rates. s55. ooo-a total Of $780,
600.
The commission declines to grant the
increases in carload rates on grain and
grain products considered as one COM
modify, on carload rates on live stock, on
packing -house products and fresh meat.
except between points on the Missouri
River. on fertilizer. On broom corn and
on one or two other items
The increases were granted on bitumin-
Gus coal. except as to South Dakota
points: on rice, on import rates. on fruits
and vegetables. on hay and straw.
The carriers in this proceeding, as did
the railroads in the Eastern advance rate
case, based their claims for additional
yeva ,.r,on the 1rounda of their imam.