The Pioche record. [volume] (Pioche, Nev.) 1908-1925, 1917-04-13

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 1.-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
lngly 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 study of the question of
| railroad regulation. Mr.. Kruttschnitt |
urged the committee to recommend Il
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.
MIR. kruttschnitt's testimony also had
a bearing on the reasons for the apph
cation Of the roads to the Interstate
| 4 toe
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 past
twenty years in the same proportion as
average commodity prices the railroads
Of the United States would have re-
ceived 81 ,654 100000 more for trans
portatiOn in 1919 than they did receive
This saving to the public was effect
ed, in spite of an increase Of SO per
cent in the cost of operation Of trains
by reduction in the average passen
ger rate per mile from 2.04 cents in
1898 to l.9S cents in 1918, decrease
Of 3 per cent, and by reduction in the
average freight rate per ton mile from
S.39 mills in 1895 to % mills in 1918. or
l3 per cent. During the same period
the cost of operation per train mile
rose from 81 cents to SITS, almost
doubling. At the same time the aver
age price of 34G commodities enumer-
ated in bulletin of the Department Of
Agriculture increased 1l5 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 art-
cles of 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.2l cents or TT
per cent higher than it was. The saw
ing to the public in passenger fares
through this difference was $314.O
600 and in freight rates $l,340,00O,00O.
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 a
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 a 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 81 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 45 cents on the dollar
Public's Chief Interest
The pubic'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-
GLIDING low grade commodities. the
percentage of the freight rate to the
cost is so slight as to offer no justifica-
tion 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 a 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 to the interest of
that part Of the public only that profits
by lower rates-that is to say the ship