Daily capital journal. (Salem, Oregon) 1903-1919, 1917-05-07
Would Still Be Losers.


Five of the big eastern systems esti
mated that, even with the desired rate
increases, they would stin be "behind
the board, " as a result Of the far high
er operating costs.
The lines argued that, despite the rec
ord 1916 earnings, the return ON invest
ment in the eastern lines was but 6.53
per cent, whereas the average income
on property investment for the past
four years of record gross earnings was
only five per cent
For some years. the roads said, the
rate of income has been steadily drop
ping, due to the fact that rates of serv
ice have been practically stationary,
while costs of operation have continued
their upward trend. Moreover, the quail
ity of service has been efficiently
heightened, the roads contended.
Detailed reports were submitted by
day, tending to show differences in
the five largest eastern systems to-
day, tending to show differences IN the
estimated increases in expenses for 1917
end the increased revenues from the
requested rate advances, as follows: )
| Estimated increases.
| Pennsylvania Estimated increase in
expenses $51 100000, rate against an in
crease asked, $39, ,141, 900.
! New York Central - $42, 900,
against, $33, ,247, 900.
| Baltimore & Ohio - $16,600,000,
against $12,786,000.
New Haven-$12, 300, 900, against So
100000.
Erie-$10, 100000, against $6,9l5,000'
Urging the Is per cent freight in
crease, Alfred H. Smith, president OF
the New York Central lines, declared
the railroads might break down unless
revenues were increased.
After pointing out that prices as a
whole were higher, Smith said:
"The railroad must pay rising prices
FOR what is used and it can with the
greatest difficulty raise its own rates
| to offset these. But such a process,
equity in the property is slowly but
surely extingrished and if it is con
tinued the finest transportation machine
will eventually be broken down.
/ He asserted the roads would be put
to extra expenses by having to bulid
tracks at mobilization camps and erect
additional terminal facilities for hand
ling troops.
Say It Is Necessary.
In increase in freight rates for the
railroads is absolutely necessary If con
ditions surrounding the railroads are
not to become menace to the country
i Samuel Rea, president of the Pennsyl
vania railroad, told the committee.
The roads, he said, face inadequate
facilities and insufficient credit anc
this menace cannot be overcome with
i out substantial increase in receipts.
! Rea declared that if the entire ad
vance the roads ask were granted, tht
Pennsylvania still would be $12,000,U0(
worse off in 1917 than in 1916. Although
I the roads are mentioned as asking
/ Is per cent increase, Rea said the in
increase would approximate 1881 Pc
cent, because less than 15 per cen
4 would be derived on increases on coal
ore and coke.
Rea gave increased expenses of th'
Pennsylvania this year at $5l,S92,000
, due to extraordinary increases i'll cost
I of material and labor.
/ Howard Elliott, chairman of the New
: Haven, declared Is per cent increas
, would not pay the increase in the Goa
bill Of his road He said the most hi
E road would expect from the increas
4 would be $3,500,000 and that indication
7 are that his coal bill will be increase
$6,000.000 over last year.