The Republican. [volume] (Oakland, Md.) 1877-current, 1917-04-12
AS PRICES RISE
HIGH COST OF LIVING
HITS The RAILROADS
Service Will Be Crippled Ijn-
less Relief C0n3S Soon.
EXPENSES Up, RITES DOWN

Hamper Railroad Credit, While I'D
vance In Labor and Materials Out.
strips Revenues, Chairman Krutt-
schntt 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 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 tie 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
plan Of regulation which will center
responsibility Cor regulation and its
results III the federal government, so
that conditions affecting both expenses
and revenues may be made subject to
uniform policy instead Of the waste
fu! and often conflicting policies in
volycd in the system of combined state
and federal regulation.
WAY Reads Need More Money.
Mr. Kruttschnitts testimony also had
a bearing on the REASONS for the apph-
cation Of the reads 20 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-
ceiyed S1GJ4.000 900 more for trans.
portation in 1915 than they did receive.
This saving to the public was effect
ed. In spite Of an increase Of 90 per
cent in the cost of operation of trains.
by reduction in the average passen-
ger rate per mile from 2.04 cents in
1873 to lbs cents in 1915. 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, or
l3 per cent. During the same period
the cost of operation per train mile
rose from % cents to SITS, almost
doubling At the same time the aver
age price of 3I6 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 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 1.2l cents or &c
per cent higher than it was. The saw
ing to the public in passenger fares
through this difference vas $314OO0-
600 and in freight rates $3.50, 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 ii 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 adj
vance at the present rate 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 80 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 40 cents on the dollar.
Pubic'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 a 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 iustifca-
ton for any substantial increase in
ices to the consumer. 1t may be
,tated with little fear Of contradiction
that the consumer seldom, if ever.
profits from a lowering of freight rates.
"EXtortiunate 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.
pers and their agents and not the gen.
eral public, the ultimate consumer"