The record., 1917-04-12
AS PRICES RISE
High COST or LIVING
HITS The RAILROADS
Service Will Be Crippled Un-
less Relief Comes Soon.
EXPENSES Up, RATES DOWN

WastefuI and Conflicting Regulations
Hamper Railroad Credit. While Ad- |
vance In Labor and Materials Out
strips Revenues, Chairman krutt-
schnitt Tells Congress Committee.
Unified Federal Control Will Improve
Conditions.
Washington. April 2.-The condition
In which the railroads find themselves
as a result of constant increases in
wages. prices of material, taxes and
other expenses. while their revenues
are restricted by legislation. was strik-
ingly described by Julius Kruttschnitt,
Chairman OF the Executive Committee
Of the Southern Pacific Company, in
his testimony during the past few days
before the Joint Congressional Com
mittee Oh Interstate Commerce. which
is making a study OF the question OF
railroad regulation. Mr. Kruttschnitt
urged the committee to recommend a
plan Of regulation which will center
responsibility for regulation and its
results In the federal government. so
that conditions affecting both expenses
and revenues may be made subject to
a uniform policy instead Of the waste
full and often conflicting policies in
volved in the system of combined state
and federal regulation.
Why Roads Need More Money.
Mr.. KruttSchnitts testimony also had
a hearing ON the reasons for the appli-
cation Of the roads To the Interstate
adrance in freight rates. He showed
that while the price Of transportation
has declined in recent years, the cost
OF producing transportation. like the
cost of almost everything else. has rap
idly advanced. This he illustrated by
showing that if freight and passenger
rates had increased during the past
twenty years in the same proportion as
average commodity prices the railroads
Of the United States would have re-
ceived $1.654 100000 more for trans
portation in 1915 than they did receive.
This saving to the public was effect
ed, in spite of an increase of 50 per
cent in the cost of operation of trains.
by reduction in the average passen-
ger rate per mile from 2.04 cents in
1895 to 1.9S cents in 1915. a decrease
OF 3 per cent. and by a reduction in the
average freight rate per ton mile from
$50 mills I'm 1895 to 7.3 mills in 1915. or
I3 per cent. During the same perioG
the cost of operation per train mne
rose from 90 cents to $1.78, almost
doubling. At the same time the aT ef-
age price Of BAG commodities enumer-
ated in bulletin of the Department of
Agriculture increased rs per cent.
Transportation is practically the only
commodity in general use that has not
Increased tremendously in price during
the past twenty years. freight and pas
senger charges being lower than they
were twenty years ago.
Big Saving to Public.
If rates had risen proportionately to
the increase in the cost of other arti-
cles If ordinary use, Mr.. Kruttschnitt
told the committee, the average pas
senger rate in 1915 would have been
2.95 cents a mile, or 80 per cent higher
than it was, and the average freight
rate would have been l.21 cents. or sc
per cent higher than it was. The saw
ing to the public in passenger fares
through this. difference was 1914 600,
600 and in freight rates $1,340.000,000.
Universal railroad bankruptcy under
this reduction in rates and increased
cost of operation, he said, was avoided
only by heavy expenditures to obtain
increased efficiency in train movement,
making it possible to haul more tons of
freight per locomotive. This had re-
duced the average cost of hauling
ton of freight. but the decline in the
average freight rate had reduced the
net revenue Of the roads from eaoG tor
hauled. IL the operating costs Of the
railroads, including the prices of coal,
TABOR and material, continue to ad
vance at the present rate lot Of rail
roads will be in the hands of receivers
by 1918 unless some relief is afforded
Mr.. KruttSchnitt told the committee
Owing to the rise of commodity
prices he said, ''the purchasing power
Of the dollar has fallen 30 per cent and
the railroads are in the position Of be-
;ng compelled by law to accept pay,
ment for their service to the public in
currency worth A. cents On the dollar.
PubIic's Chief Interest.
1.-THE public's greatest interest is in
adequate transportation facilities and
not so much in low rates. AS to most
commodities freight rates form a very
small proportion of their cost. Ex-
Guiding low grade commodities. the
percentage Of the freight rate to the
cost fs so slight as to offer no justifira
ton for any substantial increase In
prices to the consumer. 1t may be
stated with little fear Of contradiction
that the consumer seldom, if ever
profits from q lowering Of freight rates
"Extortionate charges are thing OF
the past. and under the attompt 70 cut
rates to their lowest possible figure
the interest Of the whole public III the
character and standard of Transports.
ton is subordinated to the interest OF
that part of the puLNic only that profits
by lower rates-that is to say. the ship
Ters and their agents and not the gen
tral public. the ultimate consumer