The Owosso times. (Owosso, Mich.) 1897-1926, 1917-04-06
AS PRICES RISE
HIGH COST OF LIVING
HITS The RAILROADS
Service Will Be Crippled I'm
less Relief Comes Soon.
EXPENSES UP, RATES DOWN

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 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 it's
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.
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
sdvance 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 II 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 $1.654. 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 80 per
cent in the cost Of operation offrains.
by reduction In the average passen-
ger rate per mile from 2.04 cents In
1895 to 1.9S cents In 1915, decrease
| of per cent. and by a reduction in the
average freight rate per ton mile from
IL 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 346 commodities enumer-
ated in a 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.
II rates had risen proportiopately 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
| 2.05 cents mile, or SO per cent higher
| than it was, and the average freight
rate would have been 1.21 cents, or GO
per cent higher than it was. The saw
ing to the public in passenger fares
| through this difference was 1914 ,000,-
600 and in freight rates 81 340,O00,000.
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 lot of rail-
roads will be in the hands Of receivers
by 1913 unless some relief is afforded,
| Mr.. Kruttschnitt told the committee.
| lowing 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 As cents on the dollar.
PubIie's Chief Interest.
THE public's greatest interest is in
adequate transportation facilities and
not 30 much in low rates. As to most
commodities freight rates form a very
small proportion Of their cost. Tx
GLIDING low grade commodities, the
percentage Of the freight rate to the
cost is 50 slight as to offer no justifica-
ton for any substantial increase In
prices to the consumer. II may be
stated with little fear Of contradiction
that the consumer seldom II ever,
profits from lowering of freight rates.
"Extortionate charges are 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 lover rates-that is to say, the ship
pers and their agents end not the gen.
| eral public, lhe ultimate consumer"