Evening journal., 1919-04-18
the NEED ron ANOTHER ADVANCE IN RATES.


carly and substantial advance in rates must be made
"A II the Railroad Administration is 10 stop ping up
large deficit says the Railway Age This fact Is clearly
demonstrated by the statistics OF earnings and expenses
for the last five months for which they are available and
especially for the months Of January and February The
Glass railways earned in February net operating in
Of only sOOOOOOO whereas the net operat
ns income earned by them in February, 1915 1916 and
1917 si70OOO0O In other words. in February they in
deficit for the government Of S370000O0 Their
deficit in January s36OO00OO. The armistce was
signed early November. In the four months mmedi-
ately following IT, the railways should have earned
25oOOOOO operating in order TO have covered
the guaranteed standard return TO the companies. They
actually earned only siiiOO00OO
Il is useless to try TO dodge the plain Implication Of
these figures During the FIRST four months following the
signing Of the armstce the railways earned only "a per
cent Of the guaranteed standard return TO the companies
During the first two months of the year they earned only
30 per cent Of the standard return guaranteed TO the
companies 70 is not conceivable that the results through
out the year would continue to be bad but t is prob
able that existing rates should be continued the deficit
for the year would be at least sOOOO00OO In some re-
spccs The conditions have been abnormaly unfavorable
For example traffic has been declining very greatly. On
The other hand Of the most important conditions
were abnormaly favorable Never in the history Of rail-
road operation in America there four winter months
when the conditions conducive TO economical
operation that they were In the four months under
view.
The statistics reflect situation which It is hardly an
cxaggeraon TO describe appalling The standard re-
turns guaranteed TO the companies based upon the
average operating earned in the three years
ending on June 30 1911 Therefore TO say that the rail-
ways are earning only about one-thrd Of their guaran
cdeed standard returns equivalent TO saying that they
arc earning only one-thrd much net operating income
ais they earned i'm those three years. Nothing is to be
gained and every TO be lost by not squarey facing
r,- f1a ur1nn rqfl-
road manager is bankrupt and that the railways should
now be returned TO private operation many of the conf
panles would be banAruptod.
The margin between earnings and operating expenses
must be greatly increased This be done by reducing
operating expenses or by advancing rates, or 10y BOTH
We believe that the basis of present wages op-
Grating expenses be reduced but do not believe
they can be substantially reduced under government
Grafton II is impossible under This system TO create the
n, eded competition and emulation between the officers Of
individual lines and % re-eslablsh the needed discipline
among employees.
III view of the results Of operation within recent
months however 10 is perfectly evident the Railway
Ago has said before that with present and present
rates the railways cannot be made under either govern
men private operation 10 earn adequate net operat
ing income If the government continues to operate them
WILL unless rates advanced continue TO incur large
deficit Unless rates advanced many Of the companies
the railways should be returned TO private operation,
would be ruined.
The Railroad Administration should not continue TO
impose additional burdens upon the taxpayers by conn
uing TO operate the railways at heavy loss. Already
the deficit which lt has incurred and which the tax
payers must pay exceeds s3O0OOOO The burdens under
which the taxpayers staggering are heavy enough
The rates should Immediately be advanced at least topper
cent and as as practicable legislation should be en-
acted under which the railways and will be resorted
TO private operation Furthermore. that the advance
in wages to The train service employees has been made
advances wages large classes OF railway employees
should be stopped. With the railroads in the condition
they are the public has right TO insist that no
advances TO large classes Of employees involving in
in expenses Of many millions year shall be made
until a very different relationship from that existing
has established between earnings and expenses