The Birmingham age-herald., 1919-06-14
INCREASED EXPENSES

INCREASED EXPENSES
 ''The other reason is, that the expenses having increased a great deal more than the railroad rates have been increased, aside from this loss of business, this deficit would be due largely to the rela- lively higher cost and not relatively 10 low revenue The relatively higher cost is perfectly apparent when we ind that the wages which are being paid to the railroad employees are on an average ot about 52 or 53 per cent in excess Of what was being paid in December, 1917.
 Along with that increase of 52 or o5 Der cent in wages they have an increased cost of 35 to 40 per cent in material. The railroad administration, just like every other business, has been confronted Wlth
 it's own high cost of living and that hlsh cost of living as compared with the iatter part of the year 1917, as suggested by the percentages I have given, 52 or B per cent
 n wages. and 35 to 40 per cent increase
 m materials and to offset that we nave the increase of 25 per cent in rates, II IS reasonably clear I think, to everyoody' hat a 25 per cent increase in rates VIII not take care of a 40 to 50 per cent n- crease in expenses, or perhaps an aVerdSe of 47 or AS per cent increase In expehses' including both wages and materials, uii less there is an exceptional increase Ill business, which can De aohe at ah ceptonal profit.
 | INCREASED RATES DEMANDED , | .aThe resultof that is that freight rates l ,t the present time, instead Of osfns | higher than ever before, are lower than | before. when tested by the value fot the | init transported and the amount or | transportation which that article trans l ported will buy That leads a. great many l people to urge that there fought 10 De | an immediate increase Tn ffates m oruef | 70 meet the situation. I Nave had in my experience, which is rather unique, varl- ous shippers who have come to me and | urged that railroad rates ought to be il'- | creased to take care of this sltuatioh | don't suppose that condition has ever | existed before in this country, where the | shipping public has voluntarily asked i that the rates be increased.
 | My position on that subject has been that if is important for us not to increase l rates more than it is absolutely neces- | sary. that it is very desirable for us tc form a better idea than it is possible foi us to form at the moment as to the ex tent to which the present detlcit Will DC eliminated during the increase in pusl- ness because an increase in business car
 ried on at the present time will, produce
 nore than an average profit, for a very
 large part of the expenses of the rail road administration will not be increased hv an increase of business. So there is | a reasonable promise, therefore, that large part of this deficit will be wiped out as the business increases ana d' not think it would be in the public In terest to make an increase in rates whicl would be unnecessarily higher than would be required to take care of the present deficit
 MY position on that subject has beer l matter and to avoid any premature ac
 ton, because of my feeling that railroa'
 rates are so pervasve in every line o
 industry that any unnecessary increase il |, | rates is likely to result in an unnecessar.
 increase in the cost of living.
 l T think it is reasonably clear that tn
 present deficit is not due to any i'm
 nrovident expenditures on the part 0 ] the central administration of railroads but is due to the fact that the govern | ment, in order to protect the peopl | against any unnecessary increase in rate
 and any unnecessarily starting in neF | cycle of high cost of living, is carryln
 this deficit and they are continuing sue P rates which, compared with the cost c , everything else, is the lowest rate tn
 country has ever had
 s1,2OO, ,OOO,0 APPROPRIATION .Another matter 1 want to speak abou l is this railroad appropriation. The rail l road administration asked this Congres for an appropriation or $l,AVV,oU,VU. is very natural disposition to assum = that the roads be advanced that muc |, government money which has been an
 will be lost as they think through tn
 operation of the railroads by the govern
 ment The fact is, beginning with fed
 eral control, we got an initial appropria
 tion of s5o0,O0OOO0 from Congress. Tn
 appropriation now asked for is $l,2o00Oo, 600, making a total of $l,70O,000,000 Onl. part of that represents a loss of $4s6,
 OO0 OO0 the deficit to which I have re