The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-06-30
Director-GenerM Illness, GrappIe
with the Railroad Problem.

DirectOr-Gen Illness, GrappIe
with the Railroad Problem.
WALKER d. HINES, Director General
Of Railroads, has fought a good fight
not merely for the roads operating at
desperate losses under Government
control and for the Treasury trying
yalnly to cover the murderous deficits.
He has fought good fight as well
Tor the shippers and for the Ameri-
can people, who in the last analysis
must foot all the bills.
With n clear comprehension of the
economic situation of the whole coun-
try the Director General has never
sought to disguise from anybody the
truth that heavier costs put the brakes
on business in general, while the rail-
road business in particular depends
on general business. With the sound
sense of the, practical railroad man
he has wanted reasonably high traf-
fic rate that would permit the car
riers to pay their own way with full
Train loads. He has not wanted an i'm.
moderately high traffic rate that would
result in half empty cars hauled on
the main lines and in idle cars crowd
ing the store yards.
Mr.. HINES has been wise enough ia
see and frank enough to declare that
it was economic lunacy to try to force
the railroads. bleeding to death, To
pay steel and, coal prices fixed at in
0rdinately high levels so as to keep
the steel industry and the coal indus
Try thriving on an artificial basis
Not only is coal consumption one OF
the colossal expenses of operation for
railroads; 1t is a transcendent factor
in all manufacturing industries. For
Mr.. HINES to have assisted deliber.
ately in the imitation of coal prices
for example, would have been for him
both TO magnify his operating ex.
penses and to make it the more diff.
cult for Industries to produce and sell
the goods which, If railroads are to
live, they must haul to market.
Mr.. HINES has been catholic enough
to conceive and daring enough to con.
tend that in such a predicament as
they are caught-the vicious circle OF
higher wages TO equal higher prices
and then still higher prices to equal
the higher wages--the American peo-
pie would be better Off to stand more
taxes to meet the railway deficits
than more and heavier rate increases
TO avoid the deficits
His argument has been that nc
freight rate going into the cost Of n
commodity at the point where 1t ID
shipped can come out In anything like
the same amount at the point where
the commodity is received by the ulti.
mate consumer. Put billion dollar.
of new freight. charges into the com
modities at the start of the journey
on the way to the industries and Il
energies from the mills and factorle,
on the way to the jobbers a probable
billion and quarter. Out of the
hands Of the jobbers and brokers OF
the way to the wholesalers 1t become.
probable billion and a half. Out ol
the hands OF the wholesalers on tho
way 10 the retailers 1t becomes prob
able two billions. Out of the hands 81
the retailers on the way TO the ulti
mate consumers 1t becomes probabl,
three billions. Starting at that bill
ion, perhaps the freight increase land!
with a crash upon the public even 4
possible four billions, Just the freight
Just the freight increase!
1t has been for this reason-the
multiplying OF railroad rates into
commodity costs--that Mr.. HINES ha.
contemplated for an alternative meas
ure the taxes as a public burden
easier to hold within bounds.
Nevertheless, reluctant as he ia Il
ask a sinking transportation business
TO pack load of stiIl heavier traffic
charges which may knock 1t down al
together, the Director General feels
that the stupendous operating deficit
threatening the very Treasury may
compel the Railroad Administration
to fall back on the old. old trans.
portation principle. so notorious In the
wicked private management days. Of
taxing the traffic what 1t will bear"
1t is a fact that In spite Of inflated
prices there is traffic which flows as
abundantly at present high rates al
It flowed before at low freight rates
1t is a fact that because of inflated
prices there Is traffic which will no,
flow freely at the present freight
rates. 1t is a fact that there is traffic
which will scarcely flow at all. So lei
he traffic that viii pay anyhow pay