The Washington herald., 1917-05-08
MUST have RATE RAISE
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ton IL taken, threatens the downfall Of
the whole economic situation"
Representatives of the carriers ad-
vanced figures to show that the operat-
ing expenses Of the railroads this year
would absorb practically all of the sur
plus earnings and that the proposed Is
per cent advance in rates would cover
the great rise IN the cost Of operating
necessities.
Samuel Rae, president Of the PennsyI-
vania system, told the commission that
II the 10 per cent increase were granted
It would bring return from all COM
modities. with the exception OF snthra-
cite coal. OF slI2,ooa0oo. to the Eastern
railways, and at the same time the in
dicated increased costs In operation will
be s217, 900 o0oo-eaying a deficit Of s75,ooO,-
900 after the relief sought was granted
War Prices for Coal.
Railroads In the East have been forced
to compete with industrial plants, pay
ing war prices for coal. the commission
was told. A quarter Of all Of the coal
mined in the United States Is purchased
by the railroads for locomotive fuel, and
every 10 cent q ton advance adds ap-
proximately $4,000 900 to the fuel bills of
the carriers.
An increase Of Is per cent in freight
rates on the New Haven system would
be more than absorbed by the increased
cost OF coal alone, President Howard
Elliott. OF the New Haven, said. He also
said that his lines had been pressed by
coal costs to a greater extent than most
Of the Eastern lines.
Figures were produced to show that
coal costs to the Eastern carriers last
year were s1o4,Ooo.ooo and that this year
they would be about SIS. .oo0. 900, based
on an average increase Of "a cents q ton.
All ranks OF railroad workers have re-
cetved advances in wages during the past
year, 1t was shown. 1t was put forth
that the Adamson law had added S36, 0oo,-
coo to the annual Eastern payroll, and
other increases, made necessary to retain
the workers by the advances made in
other lines of industry had rolled up the
total payroll S55,0o0,0oo, with q total in
crease in the cost of employees Of ss9.-
100000. or appronmating a 10 per cent in
crease In wages.
Advance 80 Per Cent.
Prices Of railroad materials and equip
ment have advanced about 10 per cent,
A W. Thompson, of the Baltimore &
Ohio Railroad. told the commissioners.
Materials which last year cost $ls0OO0O0O
would at present rates cost $500 0oo 900, he
said. Operating costs will go up on the
Eastern lines at least s90.O0o000 IL the
railroads continue to purchase materials
and equipment at the normal rate with
current prices, Thompson declared.
Conservative estimates Of the increase
OF operating costs to the Eastern roads
were fixed at t217, 100000 which is a figure
exceeding by s40.oOo.0oo the entire surplus
above dividends earned in the record year
Of 1916, the officials declared. They also
added that new rolling stock, cars and
locomotives, win mean increased costs
Of from 80 to 100 per cent.
Pointing out the steady rise in the cost
Of transportation, the representatives Of
the carriers said that rates for service
had remained stationary for some years.
Although the year 1916 was the greatest
In the history of railroad earnings, the
net income on the Sc, so, 900, 90 invested in
the Eastern roads was only 6.s3 per cent
Average income of record gross earnings
Of the past four years have been but
per cent, the railroad executives claimed
shippers are willing to pay the bill II
given the service" argued F. B. Under
wood, Of the Erie. He pointed out that
no complaints are received over the
freight rates. but that innumerable pro-
tests are lodged because of the lack of
adequate freight facilities.
President Underwood calculated that
the increase in operating expenses for
$50 AS2 NhC present year WOul0
aggregate 15.S per cent He said that
therefore the Is per cent increase in
freight rates was absolutely necessary to
enable the system to meet its OBLIGATIONS.
He declared that plans for new terminals
at New York, youngstown, and Cleve-
land, have had to be abandoned for the
present because the falling off in earnings
has injured the credit of the road to such
an extent that high rates have to be paid
for money borrowed for these projects
Fifteen per cent advance In freight
rates would not alleviate or remedy. but
merely aid the New York Central, Presi-
dent A. H. Smith told the board He
said that operating costs on his road have
been boosted about forty-five millions of
dollars this year by general advances In
materials, fuel. and labor. He added that
for the efficient conduct Of the business
Of the road II would also be necessary
to make an expenditure of $50 0oO, 900 this
year.
Today the hearings will be continued.
and IL is predicted that the decision of
the Interstate Commerce Commission in
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