Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1919-07-14
RAILROADS TOLEW
INCREASED TARIFFS
Executives Say Further Tax Is
Necessary If Systems Escape
Receiverships.
MAY DEMAND rs PER CENT
Former Advances Have Failed to
Absorb Heavier Operating Costs
Due to War Prices.
MAY DEMAND rs PER CENT
ny j. FRED. ESSARY.

Pect IL that the American people will
be subjected to further tax of Is to
20 per cent in transportation costs
either before or soon after the gov
ernment surrenders the railroads to
their owners. Many railroad execu-
tires are convinced that this tax will
have to be placed as high as 25 per
cent If some of the railway systems
escape receiverships
Already two horizontal freight rate
advances have been made in an effort
to place the railroads Of the country
upon self-supporting basis, but that
Is not enough. total Of approxi-
mateiy $1,000. 100000 additional revenue
has accrued TO the railroads from the
Eastern Is per cent advance and from
t she genera % per cent raise. but that
ing cost which has been laid upon
the roads as result of successive
wage Increases and the wartime price
of materials
Must Make Up Deficits.
1t is indicated by review of official
earnings figures submitted to the In
terstate Commerce Commission. accord
ing TO statements made by railway
$500 100000 a year must be made made unI ~.
This cannot be accomplished by reduc-
ing wages. The railway employees
would never stand Tor that 1t can
not be accomplished by economy in
buying materials. The railroad ad-
ministration has proven that much 1t
can only be accomplished by charging
for service.
The fiat 25 per cent increase in
freight rates ordered by Director GEN
eral McAdoo has netted TO the rail-
roads somewhat more than $750.0OO. 900.
On that basis. IL Will be necessary to
Jump the rates Is per cent at least.
In order to raise the s50oooo,o0O which
must come from somewhere. IL the
per cent will be the probable amount
OF the fre!ght.rate increase.
forecast of advance returns to the
Interstate Commerce Commission indi-
Gates that the railroad deficit for May
VIII be close to s3?.o0o.ooo. as compared
an fonr dee, In the
five months deficit will not be less
I than $alS,ooo.oo0. or as much as the
total dencit for the Class I, raiiroadt
ment operation. These fgures do no,
| include minor expenses OF the rafl.
road administration itself. which viii
make the total, somewhat higher.
Lose Heavily In Mny.
| Operating revenues for May. as sc
far reported. were S4o7.942,OOO. an
| increase of % per cent over 1918
operating revenues were ss5O,s6l 900
Sis, 900. an Increase OF l per cent
and the net operative; income waa
s3s,530.000. loss of AGA per cent The
standard return. or May average net
period, was s77,4 1000. This le..es a
government deficit for the month of
S38,S96.000.
May freight traffic. while 1875 pei
cent under the record figure for May
1915, Is only one-third Of per cen,
below the test-period average for May
so that this years returns are closely
hot "a ny-
crnment took control of operation
Passenger traffic is more than 80 per
cent in excess OF the test period. due
largely, the railroad executives con-
tend. TO troop movements. and with
the higher rates for civilian passen-
gers. is producing about 20 per cent
greater revenues.
For the first FIVE months of the year
the net operating income of the rail-
roads Is S104.+45.0o0, as compared with
ss!7 $4,000 earned in the same months
TO be made up by the government
II is shown that the five months
freight and passenger traffic is about
per cent in excess Of the same
largely to the higher rates in effect
the operating revenues for the period
are sl,923. 100000. as compared with
s1.36s. 100000 in the test period, gain
OF $560.o0o.0 600, or Al per cent.
Expenses Have Advanced.
Railroad expenses. however. have adj
vanced in much greater proportion
The operating outlay for the. five
months of 1919 amount to s1.72S.000.-
900. as compared with s963, 600, 900 in
the test period, an increase Of $780,
100000. or 20 per cent. The additional
operating costs for five months. there
fore, are about s200.000,000 in excess
of the additional revenue.
Railroad operating officials believe
that operating expenses are now On
about an even keel at the high level
reached several months ago. after the
last big wage advance. This is indi-
Gated by review of the average daily
expenses for the first five months OF
the year 1919. This shows that. while
in the last three years OF private on
Grafton the cost of labor and materials
used in operation averaged s6,410.0oC
an increase of s5.070,Ooo. or 10 pei
cent, In the daily cost OF PRODUCING
transportation. As the 1919 traffic is
about per cent in excess of the traf-
hc for the three-year test period
cost OF operation is 20 per cent This
| It Is pointed out. is at the rate OF
S1.70o 100000 wear in excess of the
| operating costs in the test neriod.
n year, to he made up nv rate in
| creases. is somewhat larger than the
estimates of Director General Hines
1t should be added. He has stated
that the deacit will scarcely he more
averaging more than s4o.oo0.ooo 2
month. however. it seems certain tha
| the half-billicn mark Will he reached
| And IL II is, that sim must come FROM
| the Federal Treasury while the rond'
from the shinper. after the Treasury
| is closed to the railroads.
MASCOT MAKES TRIP BACK