Webster City freeman. [volume] (Webster City, Hamilton County, Iowa) 1884-1946, 1919-06-16
ANOTHER Rail
BOOST COMING?
Director General Finds His
Railroad Finances in a ~
Bad way for Divi-
dends. ..
FREIGHT RATES LOW?
Organized Crime is Back of
Attempt Upon Life of
Palmer.
FREIGHT RATES LOW?

BY ]. f. JONES.

Washington, ID. c., June 13-Th
director general of railroads, Wake
d. Hines, is now earnestly considerin.
the problem of what advances in rail
road rates the government must maxi
to provide for the greatly increased
cost of railroad labor, as well as Iabo
in industries supplying coal, steel ant
other material to the carriers. 1t Seems
inevitable that the government mus
soon advance rates sufficiently to pro
vide $4OOOOO,OOO to $50O.0O0,0O0 addi
tional revenues.
The increased cost of railroad Labor
since 1917 is $1,000. 100000 a year: tht
average annual earnings per man have
risen from $1,000 to $1,000. The in
creased cost of materials consumed il
the, production of transportation is
more than $5OO,0O0,OO0 year and the
workers in coal mines, steel plants
and the other industries producing rail
road materials. 1t is fair to say that
of the $1,5OO,OO0,OO0 added to. the cost
of producing transportation all but a
very small part is in wages.
To meet this increased operating cost
the government has thus far increased
railroad revenues through advances in
rates by about $1.OO0,O0O.0O so. tliat
there is left $5OO.OO0.00O of increased
costs that have not been provided for
For the time being the deficit is being
met out of the public treasury. OBJ
yiously this cannot long continue. The
railroads today, on the present dis
located basis of costs and rates, are,
taking them as whole, barely earn
ing the interest on their bonds and
practically nothing for their owners.
When the government took control OF
the railroads for war purposes it was
provided. on the recommendation OF
the president, that there should be paid
for their use about $500 100000 a year
or little more than 5 per cent on the
value of the properties. In TIE first
year of government control the net
operating income fell to about 4 pei
cent, and this year without an increase
i'm rates it is likely to be less than J
per cent.
Return of The Railroads.
The return of the railroads to their
owners on such an inadequate income
basis as is shown by the director gen
oral of railroads in the hearings before
congress, would. it is pointed out, not
only mean the reduction or elimination
of a large part of railroad dividends,
but would undoubtedly mean default in
interest payments on many railroad
bonds. As Senator Cummins, chair
man of the senate interstate commerce
committee. has said, a return OF the
roads to their owners without proper
financial reimbursement would not only
mean railroad bankruptcy but would
undermine our whole financial struc-
tnre.
The director general of railroads III
an address few days ago in the west
stated that ON the various, railroads
the increas ed cost of labor and mater
ials was from 80 to 30 per cent, while
the increase in rates was less than 20
per cent. He suggested that to rSestab-
fish the equilibrium between rates ana
costs il might be necessary to find $500
DOC, 600 Of additional revenues through
an advance in rates
In putting the figure as low as S"Oo-
DOC, 600 the director general undoupted
w has in mind the possibility OF greater
efficiency in railroad labor and some re-
duction i'm the cost Of coal, steel ana
other products consumed in operation
As for a reduction i'll the cost OF ma
tarials If must he borne in mind that
those increased costs for coal, steel ana
other materials are based on new
level of wages. and the coneensus OF
expert opinion is that there VIII DC
little change in the level Of prices for
some time to come.
The general advance in railroad rates
made year ago by the director general
was on the assumption of possible
total increase in wages of $3.50 ,OO0,ooO'
hut since the Lane wage board mace its
report, S65O,0OOOOO additional i'll
<reases in wages have been granted
and it is understood that further
wage increase may be made in the neal
future.
Director General Hines states that
railroad transportation charges to the
public are still so low. compared with
all other things. that freight rates are
really the cheapest thing in the co'n-
try. American freight rates, even wlth
n further advance -of - per cent or ~
per cent. would still he the lowest in
the world.
Organized Crime.
Emboldened by such successes as
have attended the |. W. w. and the
Tom Mooney agitations, the anarchists