The Washington herald., 1918-05-28
RAIL INCREASE
70 PER CENT
ON ALL RATES
5000, 100000 to Be De-
rived Annually from
Higher Tariffs.

Increases in passenger and freight
rates. to add about sgO0OOO.OOO annu-
ally to the operating revenues Of
the. railways of the United States,
were announced yesterday by Di-
rector General McAdoo. ..
The increases in rates are initiated
to meet the wage increases of $780,
Ooo.000 for railway employees announc-
ed yesterday to take effect as OF
January 1. 1918; an increase in the
cost of coal Of $3.50, ,0o0, 900 over 1917,
and of $321, $4,000 over the year 1915.
and other increased costs of opera
tion which Director General McAdoo
estimates will be from $S30. .o00, 900 to
$3.50 900 more than for the calen-
dar year 1917.
Increase is ID Per Cent.
Operating revenues for the calendar
year 1918 should be about 100000 un-
der present rates. The 800. 900. 200 ad-
ditional will, therefore. amount to an
increase of 19 per cent in all rates, il
applied as a fiat rate. g..
The trouble that faces the railroad
administration Is that the increa sed
freight rates. from which the bulk of
the additional revenue is to be OBJ
tained. will apply for only six months
Of the present calendar year. while
the increase in wages and other oper-
ating expenses will run for the full
twelve months.
This means. without a doubt. a
considerable deficit On the books of
the railroad administration at the
close of the first year of the opera
tion of the railways under govern
ment control. The deficit will be
made up from the revolving fund
granted to the railroad administration
by Congress
On the summary of the report of the
large roads for the three months end
ing March 30 the back pay due en-
ployes under the wage increase will
wipe out the railway operating income
and leave a deficit of approximately
100000. or s20.O0o.0O0 for the first
six months before the increased rates
go into effect.
1913 DefeIt to be Small.
Physical improvements and the DUR
chase Of new equipment at a cost of
500. 100000 have been authorized. and
" PdAu time TO Time
out Of the operating revenues. Luck
lily none of these payments will be-
come due until after the new tariffs
are In effect; so that the total de-
felt for the year, which with wage
increases and without rate increases,
would have mounted to astonishing
figures. probably will not amount to
more than s20,0oo.000 to SIS, ,0O0, 900 at
the most for the calendar year 1913.
Il shall do everything in my power
to put the railroads on a self-sustain-
ing basis. as long as remain d.
rector General under Federal con-
troll" said Mr.. McAdoo in announc-
ing that the. President, at his recon-
mendation. had initiated new pas
senger and freight rates.
Federal Control Was Timely
The fact that, under Federal con-
troll. with the economies that can be
practiced and the increased efficiency
OF service made possible, such drastic
steps are necessary, simply empha-
sizes the wisdom and timeliness of
the action by which. the railroads
were brought under Federal control.
IF the government had not acted
al the time Il did. the country faced
q calamity the effects Of which no
man can tell The railroads were in
a state OF suspended animation, with
sinking spells every few hours, when
the government took control.
IT has required some bold surgery
to resuscitate them. including ampu-
tation, and the infusion of blood from
the strong government. and just now
they se beginning to respond to
treatment.
They will have to be carefully
nursed back to strength under Fed
erai control. but that they win finally
cosr,surp oS PACE ,uo (