New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-08-02
Railroad Earnings.

railroad Earnings.
Less than two years ago the Inter
state Commerce Commission decided
great question in the only way IT
could properly be decided, but d;1
so partly for wrong reasons. Cor
gress had delegated to it the power
to regulate, to fix and to determine
the reasonableness Of rates as rates.
Then arose the question whether Il e
railroads should be allowed all to IN
crease their rates concertedly in a
horizontal manner, and that was a
matter of public policy. The com
mission allowed the increase to take
place, on the ground that the net
revenues of the railroads on the
whole were inadequate TO keep them
generally solvent and enable them
at the same time TO go on increasing
their usefulness as public carrier.
But it gave other reasons. The rail-
roads, to put everything possible
into their case, had pointed TO the
immediate effect of the war upon
earnings, which was very alarming.
end had argued that with Europe
closed TO American corporations as
a source Of new capital it would be
more difficult than ever before TO
obtain capital, and railroads could
not borrow at all unless their rates
were raised to reassure the investors
AS events proved, this profound
emergency existed largely in the I'M
agination of the railroad people,.
The commission adopted it. Rates
we're allowed to be raised. ImmeGi-
ately the secondary effects of the
war upon business began to appear.
Business recovered rapidly, and rail
road tonnage expanded accordingly
As for capital, not only have VIC
financed ourselves in the mean tire,
but in two years we have loaned the
world above S3,OOO,OOO,OOO. AS fol
railroad earnings, they would have
reached a new high level at the old
rates. They now are running 10 e.
80 per cent over last year. There is
no way of knowing how much Of the
increase is owing TO the actual in
crease in tonnage and how much to
the increase of rates. When the
railroads were arguing their advance
rate case labor was with them, for
selfish reasons. Now labor wants
some of the profit. The brother
hoods of conductors, brakemen, en-
gineers and fremen threaten to tic
up transportation unless their wages
are raised, and the railroads so far
have offered front of united re-
sistance to their demands. Yet there
are the embarrassing earnings, and
there is also the fact that the ne
cessity Of raising the wages of labor
was one of the arguments the rail-
roads used to get their own wages
raised. If they say that these earn
ings are owing to an access of war
prosperity in this country, they will
be reminded that they pleaded the
war as a calamity when arguing
their case for higher rates. They
ought not to have done it.
There will be no general railroad
strike. That is as unimaginable as
that the railroads should be suffered
to fall into general insolvency for
want of p. mission from the Inter-
state Commerce Commission to in
crease their rates. 1t is something
that cannot happen. Railroad sol
vency became a question of public
policy, and settled itself. That extra
legal precedent will stand. The di-
vision of railroad profits with labor
would become in the last phase a
question of public policy also, and
would then be treated accordingly.
Transportation cannot stop.