The sun., 1919-06-28
WHY THE RAILROADS SHOW
A DEFICIT.
The Lines Of Increasing Cost by Unit
and Decreasing Revenue By Unit
Have Met and Crossed--A Predic-
ton Of Nine Years Ago verified.

| 30 much that railway rates have got
into the high cost Of living as II Is that
the high cost OF living has got into
| railway rates.
The theory that railway operation
has changed from the law Of increas-
ing return to tho law OF decreasing re-
turn Is not new. 1t was advanced
| by a statistical witness in tho 1910
advanced rate case Of the Western
railways. though little attention was
paid 70 It at the time. Even the rail-
ways did not then give It serious re-
gard, and in their argument OF the
case, which was decided against them
by the Interstate Commerce Commits
sion, they laid slight stress upon the
point.
In ,hn cnurs. ~ ,ha haar,ns yhnvv-
.,,nr =. .,t..o..a ~. .,.r, .ra ,,or.
| '"o e.
OF less estounoeo' at'ention Oh sec
rotary Lane, then a member or the
Commission. The witness had sought
TO show by numerous analytical tables
| that ronpar,nr 1910 with 1901. all
| oxnnn... GO. ,nnr..tn. nv ,,nit
| -S,,- -.
wmie revenue was ueet eess w ae
| that tne Gay was ineVitapie' anu hot
| far distant, when these lines would
| meet and Cross, and that when they
did. corporate chaos was the doom of
IN. =. rr,.r,
s,.s -,,,...n. -, A.. pouro.A
| Il,
administrator ior nuho.eus Va hA
| lions to meet operating oencit SHOWS
| that these lines have met ana crossed.
| After the attorneys had examined
and cross.sxamined the theory. Com
| ,,,,,s,on.r ~. x.,,,h n taroer ornsn
- re.
Va .ie si'uo.ion 'iiaA e"s -.
'ook tne Withess u" h~"e, e"N .
| preliminary discussion, closed MS ex-
/ animation as follows:
cou,,,..,or.r--supnesa that rates
| ~sr. ,ne,.a.sd. inorsassd 40 that
ri,n,r . .hort tim. you hsd &c. ooo. 900
| ~ .urniu. ar 500 ooo. 900 of surplus,
| tha, vou,a not IN any vav prevent
| ,n,, ,nr,r~ Ia ssa,n for another in.
| ers... In ,s,s. - ther. was a demand
| o.. n,sh.. ,v. "a, a. ina mart of the
! man wovia ~
| wt,,....Not 20 IN. trnraased cost OF
| ..,,.i,. 90. r.nt n.ioxv IN. inorease in
| rsy.n,. I,,h. oost NJ s.ryioe per unit
| e. ,nnrs..,n. In a isrss, ratio than the
| ,r.ora n.r unit then the income 10
| h.tn. eaten nm and thar, IN but one
| .aa =. ,h.,. ga ,ha, nnust be Guarded
| .r.,n., ard nrsvsnted II the expense
| nsr mi, 4. WHARF ~ should be, the
| air a, ,,crsass below that Of the ratio
| =, ,ror.a,. In A. rninr, them rates would
n. ,.a,c.d
rour,,..,.r.. sa,, .. eondit,ona are.
| VIM .ut,er hscau.s YOU have cot too
| 80. h,.,n...,
| w,,,...-w. ~r,ii eontipue To autser
| rh. 80. nu.,ns.. ma s.t the more We
| III, .,s.-
| Coun,..,or.r-rAs misfortune YOU
,ahor una.r 4. n.v,nr too much trafnc
| "a hsnai.7
| vt,nn..-v.. .,r undsr prssent
| ..n,,,,.n. ~. ,o.. mora mon.v avery
| fr.,xs,
Comr,,.,,on.r-A, thu country de-
v.,or. v,,h your rs,,road ssrv,os there
| Iii, y, 49,. tr.,,n, dsi,v.rsd Ia Won.
s,d ,h.r.,o,. v,th ths condition. a.
49, o.. az n,s..,t necss.sri,v rates
r.y. %, 70 h. Increased. Now I re-
| .ord ,h,t a. .sr,ous matter to this
~. western countrv II there ia
:. nro.r.,,,v. increase in railroad
| 49,. 80 No .tahi,itv than oertainly
w. mn., ana ,oms easis upon which
| a.. SO .nrL IN. prohl.no out upou an
n,,sr liz.
IL o
AVID ,h. tonnase increases. II takes an
additional investment of capital all the
~hiie TO hanole thet ihereAsea 'onn.
80 'na. you Nv -. ms". an, 40 ,hs
.a :. ,,sr...,n. ara m. cos, of
handIinr Il Is increasing, and the unit
revenue Is decreasing, why It seems to
me. as the witness states. the two
lines are bound to meet.
"itness-The return on eapi'A 70 70.
yucca anu as sun ." $500 ~
Ha ~. sms,r.s.
mmissloner-And there "a no time
YOU can FIX whom we would get to the
rate that would be regarded as the
maximum
| Witness-"eh' MT commissioner
when the pe'ple nno SCI .ns "s 80,
~ o. o. '' 80. @ ~ oo., - ,hsm.
wh.n IN. farmer stop. Increasing the
price of his products to everybody, and
the manufacturer the price Of his. and
when the general cost of living stops
going up then the cost per unit VIII
oy the operation Oh ha'atai Avs como
I'm " ' ' p", xom 90, ,nOrss.s
~. ors a, n h.. ssen Increased out Of
ali Proportion TO the other. In a short
time, without increasing the other cor
respondinsly.
| IT.. -oS,o.,ioo,;o,., ~ ,h;s t.s,,
orw ~ IN. yssrs 400 havs h,sn IN
nor,sor,a h,y t,,ieIlad Ths, m. trouble
~ Tho RAILWAYS have been aupmente,