Evening star. [volume] (Washington, D.C.) 1854-1972, 1917-04-22
TO ACTION
WITHOUT INQUIRY
Senator Hoke Smith Discusses
Request of Railroads for
Higher Freight Rates.
WANTS SENATE TO PROBE

Senator Hoke Smith of Georgia yes
ton of the Senate the request of the
railroads for Is per cent increase on
freight rates, and the possibility of this
increase being granted by the inter-
state commerce commission. He urged
the adoption Of his resolution provid-
ing for an investigation into the mat
ter by the Senate committee on inter-
state commerce. Finally. however, he
agreed that the resolution should be
referred to the committee before action
by the Senate.
He said he proposed to Immediately
draft a bill amending the interstate
commerce act so that a hearing would
have to be granted on every proposed
increase in rates before the commits
sion could promulgate any increase.
Expresses Views Of Subject.
Discussing the proposed increase in
freight rates, Senator Smith said:
Il regard the tendency of this ap-
plication for an increase of 15 per cent
fiat on the cost of carriage of freight
by the railroads of the country as a
serious menace to the business of the
country.
last six months of 1916 was $1.356.039.-
ss7. That was an increase over the
last six months of 1915 of $15S,647, 173,
which was the largest revenue they
have ever made in the history OF the
country. For twelve months this Wo9id
Fifteen per cent increase would be
s4o6. 900, 600. So this application is prac-
tically a request to put upon the Dust
ness Of this country an additional DUR
den Of s4oe.ooo,ooo annually. .,v.r
to the central group of railroads-that
is. TO those north of the Potomac and
east of the Mississippi-as I under
stand. of per cent.
Since then an increase has peen
given to the western group. which Is
west of the Mississippi. of between B
and 10 per cent. Last year an increase
was given to the southeastern group OF
between Is and 20 per cent This IN
crease was given practically without a
hearing to the shippers. The shippers
had been allowed to come in and to con-
test certain of the charges, and their
contests are now pending as to that
increase.
Shows Net Profits.
For the last six months Of 1915 the
net profits Of the railroads earnings in
come above a million dollars annually
was sSss.S6s.62s. Upon the same rate
for twelve months the net earnings
would be practically $1.400. 100000. The
book value claimed by the railroads of
their properties is about $4,000, 600. 900.
So that the income for the last six
months. accepting their properties at
the book value. which most students of
the subject challenge as excessive. their
net income is Z per cent. Now with a
net income of Z per cent and with the
apparent tendency to increase its busi-
ness, it is proposed to levy an addi-
tiona1 tax upon transportation Of $780,
10000 annually"
Senator Smith said that the Adamson
eight-hour law had been given as a
reason for the proposed increase. but
that no one had ever claimed that this
law would increase the charges Of the
over $60.000,000 and that $780,
O00. 900 was the figure usually accepted.
He said in his own section. the south
eastern, the people are staggering now
under the increased feright rates put on
last year.