Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1918-05-14
Plan BIG
RAISE IN
R.R.RATES
Railroad Administration Off,
ciaIs Figure Increase Of rs
Per Cent Is Necessary to
Meet Higher Costs. >
(By Associated Press.)

Washington, May l3.-Estimates
made today by railroad administra-
ton officials indicate that an increase
of at least rs per cent in freight and
passenger rates will be necessary this
year to meet the higher costs Of fuel,
wages, equipment and other operating
expenses, now set at between $780,
100000 and $750,o00,000 more than
last year.
Recommendations that rates be
raised by approximately this percent
age has been made to Director Gen
eral McAdoo by his advisers. He is
expected to act within the next six
weeks, and to put increases into ef-
feet Immediately. Shippers will be
permitted to appeal to the Interstate
Commerce commission under the rail-
road act ,and final decision will be
with President Wilson.
Biggest Ever Proposed.
Such an increase as is proposed
would be the biggest in the history of
American railways as the percentage
is larger than any ever sought by the
railways under private management
and would apply alike to the entire
country. Both class and commodity
schedules would be affected.
Rate experts of the Interstate Com
merce commission and railroad and
administration now are at work on
new schedules. Any increases to be
ordered will be arranged in manner
to preserve rate relationships between
communities and regions, officials said
today, so that industries and CONNER
cial interests will be subject to the
same degree of rate competition as at
present.
Passenger fares would be raised un-
der the plan suggested to about 3
cents mile, from the existing gen.
eral rate of a little less than 2A cents.
Large Deficit Foreseen.
The proposed increases, it is esti-
mated, would yield about $900,000.000
-$700,000,000 in freight and $780,
100000 in passenger revenues. This
Would leave margin above the esti-
mated increases in operating expenses
eventually, but since the new rates
would not go into effect until the year
is half over, their yield would fall sew
eral hundred million dollars short Of
meeting the anticipated deficit this
year.
1t is roughly estimated by railroad
administration officials that the roads
this year will spend between $3.50, ,000,-
600 and $350,000000 for wages more
than last year, between $l20,000,000
and $150,000,000 more for coal, and
between $lSO000,000 and $250,000,000
more for cars, locomotives, rails. ties,
terminal facilities, barges for inland
waterways and other supplies and
equipment. These figures may be
lowered by later developments but Of
fcials who have studied the situation
closely are inclined to believe that
they are more likely to prove higher.
The estimate of increased wages is
based on the probability that the
director general will approve a gen.
eral scheme of higher pay for work
men in accordance with the railroad
wage commissions recommendations,
which called for an addition of $780,
100000 to the $2,000,000,0O0 payroll of
last year.
Although the question of the exact
prices the railroads are to pay for coal
under government operation has not
been settled, officials in charge of pur-
chases are said to have decided that it
will be necessary to pay at least 65
cents ton more than under contracts
now expiring. Railroads coal con-
sumption amounts to about l75,000,00O
tons year.