The Birmingham age-herald., 1917-07-08

New York. July 9.-(Special.) )-James s. Harlan put his finger on the vital spot in our railway situation when in hand Ing down his minority decision in the freight rate case, he said: What the country as a whole needs. as all par ticipating in the hearings seemed to agree, is much larger terminals, more tracks, more cars. and more locomo- lives" To enable the railroad to in- crease their terminal track and equip- ment facilities Mir. Harlan strongly fa- v9red the granting of the full 15 per cent increase in rates for which the railroad had applied. That the com mcrce Of the country has been moving under intermittent embargoes for the past two years is a matter of painful knowledge to shippers and consumers from one end of the country to the other. Certainly what is needed Is ad- ditionai facilities. That is granted. But
 would the problems of the railroads be solved in the way MT. Harlan so
 strongly favors? If he is right the ma jority of the interstate commerce com
 mlssioners are very wrong in the con | clusicns they reached.
 Before arriving at a decision in a mat i ter of such vital importance, dealing with So many highly technical points | the warfaring man is likely to ask few simple questions. When that is done | it can be learned that for the past two years the railroads have steadily estab- lished one new high record after another | in the amount of business handled Mir, Harlan points out the country has been q. | dous volume that it has been necessary | to create breathing spells for the rail- roads bx issuing freight embargoes, that | Is by refusing to take new business until | existing congestion had been relieved. In brief the railroads have been called upon to move more business than they can
 handle. And as MT. Harlan says, What | the country as a whole needs is much larger terminals, more tracks, more cars and more locomotives"
 1 Next the warfaring man Is likely to l ask: If freight rates had been increased l 15 per cent would the railroads now be
 able to get the additional facilities need ed? The answer Is no, not if the in- | crease had been 30 per cent instead of 1 15. It is not question of earnings or credit; under existing conditions the rail- roads simply cannot afford to go out ! into the open markets and compete with I warning governments for money, equip
 ment and supplies.
 1 Only a few days ago Russia and l France bought 475 used-up, broken down locomotives from three of our railroads. paying more than the original cost and
 in addition paying a fancy price ~A have the locomotives rebuilt Why? Because /, they were needed to carry on the war. l That is why pig iron is now selling for l s5J q ton, again $14 in 1914; why finished
 steel products are now selling for s119 a 1 ton compared with s30 three years ago; why Mikado freight and passenger loco l motives are now selling for S460o0 and
 s4a0o0 respectively, against s26,40o and S24,500 only two years ago; why the cost | of freight and passenger cars and other railway supplies has doubled since the ! war began
 1 Tn it's monthly circular issued this
 week the National City bank in discuss ing the question of costs points out how 1 the requirements of this government and it's allies for steel, oil, coal, copper. etc.,
 are seriously interfering with business.
 It is then added:
 | "The steel mills are so completely sold
 up that there Is but little product or ca pacity available and the consumer who Is trying tn break in for early accom- mediation has a hard time in getting his 1 wants supplied at any price. He and others like him make the prices by bid-
 ding against each other, and in desper- ate efforts to find some manufacturer who can be tempted to push lower priced work to one side to serve them"
 Tn money it is the same. England and France and Russia are bidding for large
 sums, and offering per cent and bet ter. A railroad simply cannot afford to sell long term bonds in such a market. earnings have nothing to do with it.. Last year Bethlehem Steel earned S6 per cent on it's stock, and is now earn ing over 300 per cent. Early this year plans were announced for making ex- tensive improvements and additions. and a long-tcrm mortgage was created to raise the needed funds. What happened
 was that when the Bethlehem directors
 started to sell the bonds they found
 they could not afford to compete with
 foreign governments. So despite the 300 per cent earnings, the amount of money
 to be raised was greatly reduced, and
 short term notes were sold Those notes
 despite the 300 per cent earnings are to-
 day selling lower than the notes just is-
 sued by the Baltimore and Ohio railroad
 In other words, Baltimore and Ohio
 judging from the price at which its
 short term notes are selling in the open
 market, has better credit than Bethle-
 hem Steel or the rich and prosperous
 International Harvester company.