Imperial Valley press., 1917-04-23
As PRICES RISE
HIGH COST OF LIVING
HITS the RAILROADS
Service will Be Crippled Un-
less Relief Comes Soon.
EXPENSES Up, RATES DOWN

Washington, April !; The condition
in which the railroads find themselves
as result of constant increases In
wages, prices of material, taxes ana
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 on Interstate Commerce. which
is making a study OF the question OF
railroad regulation. Mr.. Kruttschnitt
urged the committee to recommend
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
fu. 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 bearing on the reasons for the apph-
cation of the roads to the Interstate
Commerce Commission for general
advance 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 pas
twenty years in the same proportion as
average commodity prices the railroads
of the United States would have re
ceived SlG54 .00O.OO0 more for trans
portation in 1915 than they did receive
This saving to the public was effect
ed. in spite of an increase or Va pei
| cent in the cost of operation OF trains
! by a reduction in the average pasSen
! ger rate per mile from 2.O4 cents III
1895 to 1.9S cents in 1913. decrease
Of 3 per cent. and by reduction in, the
/ average freight rate per ton mile from
$50 mills in 1895 to 7.3 mills in 1915, OF
! l3 per cent. During the same period
! the cost Of operation per train mile
rose from 81 cents to $1.7S. almost
doubling. At the same time the aver.
age price of 346 commodities enumer
ated in bulletin of the Department OF
! Agriculture increased 115 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 art1-
cles Of ordinary use, Mr.. Kruttschnitt
/ told the committee. the average pas
senger rate in 1915 would have been
295 cents a mile, or 80 per cent higher
than it was, and the average freight
rate would have been 1.2l cents, or 66
per cent higher than it was. The saw
ing to the public in passenger fares
through this difference was 1914, ,OOO,-
600 and in freight rates 81 $40, 100000.
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 each ton
| hauled. If the operating costs Of the
railroads, including the prices OF coal.
labor and material, continue to ad-
vance at the present rate lot Of rail-
loads will be in the hands of receivers
| by 1913 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 50 per cent and
! The railroads are In the position of be-
! ing compelled by law to accept pay
ment for their service to the public In
currency worth AZ cents on the dollar.
Public's Chief Interest.
."The public's greatest interest Is in
adequate transportation facilities and
not so much in low rates. AS to most
commodities freight rates form very
small proportion Of their cost Ex-
Guiding low grade commodities, the
percentage of the freight rate to the
cost is so slight as to offer no justifca
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 a lowering OF freight rates.
"Extortionate charges are thing OF
the past. and under the attempt to cut
rates to their lowest possible figure
the interest Of the whole public in the
character and standard Of transporta-
ton is subordinated 10 the interest OF
that part OF the public only that profits
by lower rates-that is 10 say. the ship