Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1918-05-27
lowing COSTS
CAUSE ADVANCE
5Adoo Explains Why In
cfease in Rates Has Be-
come Necessary
FACE RISE ONE REASON

MACE RISE ONE REASON
Washington. May 81
Director General McAdoo today gave
NJ Following statement for publication:
Il The United States has taken over the
x .frHtlroads as war emergency measure.
"a tuey must be operated efficiently II the
WAR Is 10 be carried to "A successful con-
4 {c,uslon, and they must he operated under
I{he high cost conditions the war has
5<Ftated
These conditions are strikinglv Illus
<rAted by the steady Increase in the cost
{Qf railroad coal, as indicated by the fol-
Afwinr table:
5e5s 52s 12s 400 900 600 600 tons sI2J $50 600
:53lI lS4. $40, 900 tons q 212 3@N 200 nN0
2@ptSs ieb' 900 600 tons m 2.95.. ISa. 7UO OOO
y The Increases in the cost Of fuel oil
consumed by the railroads and in the
sccst of other railroad materials and
efupplies have likewise been enormous.
2 These Increases have contributed in
+ tffytfably to the increased cost Of living.
(which in turn has created a demand for
5fpcreased wages for railroad employees
u This subject was exhaustively considered
trecently by the railroad wage commits
:.
Lane. Charles c. McChOrd. ! Harry
Coyington and William r Wilcox. who
8 fhaye unanimously recommended in
fcreases in wages which they estimate
5will add to railroad opera ting costs not
tless than 5000, 600, 600 in the year iN1S
THE Director General has put the recon-
4mendation of the wage commission into
fe1eot. making at the same time certain
u taddltional increases for some classes Of
5ernployes in order to meet practical
tnecessities which cannot he escaped or
postponed
Operating Costs SsGO, 600 900 More
On account of these extraordinary IN
r frreases In operating costs. which have
fcvne about as a consequence Of the war.
* is estimated that for the same aggrc-
gate business as last year. and under
the same conditions except n@ In uriCns
.tsnd wages. the operating expenses for
the calendar year 1918 will he from
fx830.000,0o0 to SS6O,OOO.O0O more than
for TIE calendar year'1017.
~ While these increased operating casts
will be subject to readjustmentg and NAV
be somewhat diminished, yet. on the
other hand. because Of tho abnormal
"a methods by which business must he con-
y ducted to serve the needs Of the war
ffhey may he substantially increasc0 T.
fseen1s clear that the railroads should be
3p7Ade self-sustaininE and that sufficient.
ffevenues should he provided 10 prevent
tfEem from becoming - burden on the,
.tEe4eral Treasury. The iur1,diatr nrar-
tacal necessity is that without delay.
kfncreases in rates should he made ~ pro-
wide for these increased costs of oncra
sfion At best virtually half Of the wear
sti316 must elapse before such increases
lin rates can be made effective. although
4 {fncreases in operating expenses nave
3be<n steadily effective since January /.
f1e1s.
q Therefore. by virtue of the power. dNIr-
< ftnr Federal control Of the railroads.
y which the act of Congress has conferred
tupou the President to initiate rates
Whenever the public interest requires.
(which power, as provided in that act.
1.-THE President by proclamation has de-
vc5yed upon the Director General the
Halter has been compelled for the roa-
sons stated 20 initiate substantial in
creases in freight and passenger rates
2 for Virtually all transportation services
llperformed by the railroads under Fed
& eral control, including. Of course. trans
iportation services within the several
Estates as well as transportation service
across State lines. These increases are
( made with the approval Of the President
and are explained in detail in the copy
B..
3insnt
z Increases Effective Next Month
The Increases in passenger rates will
fhecorne effective on the 10th day Of June,
/ <191S. and the increases in freight rates
<~fll become effective on the 25th day
K 1of June 1918.
n N making the advance effective on
\ THE dates specified a simple form NJ
stariff authorized by the Interstate Com
\ tm4rce Commission must be used. AVID
\ ttffs Will lead to the temporary disrC-
gard. to some extent, Of established
{groupings and differentials. But it is
+ The Intention to observe such groupings
land differentials as far as practicahle.
land hereafter, with as much dispatch as
* ,possihle. restore any important relation
s lahips which may for the time being he
<diSturbed. and conCurrently Herewith
tendeavor to remove any existing dis
fcrfsnination and bring about uniformity
I, &of rate adjustment throughout sections
: where conditions are similar
8 The act of Congress provides that the
q Hfzeasonableness and justness of such
frafes may be dealt with by the Inter
lrfate Commerce CoglmissiOn. 50 that no
3 tinferekts affected will he deprived Of
1.-The opportunity for full hearing and
+ lconsideration, The act of Congress pro-
) <vf6es that the commission. in passing
turon these questions. shall take into
< 'Iconsideration the Presidents finding and
:. {t*r<ificate that in order TO defray the
texnenses of Federal control and opera
y ffion u Is necessary to increase the rail
way operating revenues.
Not For Betterments
IN this connection II Is important to
snake clear that no part of the increase
3 lin ratos now initiated is on account of
& sthe making of additions and betterments
Tor the purchase of new equipment or
tother Expenditures chargeable to invest
( Jmenf account The Increases initiated
<are solely on account of increased bur
<dens tending to diminish railway operat-
T ting ineome
81 IN the nature of things no such far
X 11chlng step can accomplish ideal equal
t1f5on as between the numerous inter-
III @111 necessarily affected and doubtless
domfnission will find ii proper "a
nike establishments to attain nearer
f18cn to such equalization. While, as
~ pfacticable. the rates as initiated
I<HIEned TO avoid unnecessary dis
H1c< Of relative rate bases, the di
(or general will cooperate heartily
[h axe comnission in any readjust
- H.&31fx needed to accomplish still furthel
~ object Of avoiding undue preference!
- 17<1i<1 neYertheless, may develop upoI
49t4IIed consideration by the commits