Five Mile Beach weekly journal., 1917-04-06


Hamper Railroad Credit, While Ad-
vance In Labor and Materials Out
strips Revenues, Chairman krutt-
sohnitt 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
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 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
yolved in the system of combined state
and federal regulation.
Why Roads Need More Money.
Mr.. Kruttschnitt's testimony also had
a bearing on the reasons for the appli-
cation of the roads to the Interstate
Commerce Commission for a 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 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 1915 than they did receive
This saving to the public was effect.
ed, in spite of an increase of SO pei
cent in the cost of operation of trains
by a reduction in the average passen
ger rate per mile from 2.04 cents in
1895 to 1893 cents In 1915, a decrease
of 3 per cent, and by a reduction in the
average freight rate per ton mile from
$50 mills in 1895 to 7.3 mills in 1915, or
ID per cent. During the ame period
the cost of operation per train mile
rose from 90 cents to $1.78, almost
doubling. At the anne time the aver
age price of 346 commodities enumer-
ated in a bulletin of the Department of
Agriculture increased lis 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.
'7 Big Saving to Public.
If rates had risen proportionately to
the increase in the cost of other arti-
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 1.21 cents, or 66
per cent higher than it was. The saw
ing to the public in passenger fares
through this difference was $314,000,-
600 and in freight rates 81 $40, 000, 000.
r 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-
at the present rate a lot of rail
roads will be in the hands of receivers
by 1918 unless some relief is afforded,
Mr.. Kruttscbnitt 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 * cents on the dollar.
PubIie's Chief Interest.
1.-The public's greatest interest is in
adequate transportation facilities and
not so much III low rates. As to most
commodities freight rates form a very
small nrOnOrtiOn of their cost Ey-
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 a thing of
the past, and under the attempt to cut