The sun., 1919-10-18
DEFENDS REFUSAL
TO INCREASE RATES
Hines Asserts Railroad Ad-
ministratiOn Was Justified
in Course.
Specidl Despdfch 10 TIE SuN.

WASHINGTON, Oct. 17.-Defending the
attitude OF the Railroad Administration
against an increase in railroad rates by
the Government to meet the situation
to be confronted by the railroads when
they are returned to private control.
Director General Hines issued state
ment tonight declaring that the Asso-
citation OF Railroad Executives had taken
position fundamentally unsound with
respect to the basis for such increases.
He said that use of the temporary rate
making power of the Government to
say what the railroads shall receive and
what the people shall pay for tranSporta- =
ton after Government control is not
justified.
His statement follows:
THE suggestion of the railroad execu-
tives that the Railroad Administration
make increases In rates can mean only
one thing, and that is that the Railroad
Administration shall make these In
creases during Federal control for the
sole and exclusive benefit of the railroads
under private management after the end
OF Federal control. This Is true because
the conclusion has been reached with
the approval of the President that II is
not in the public interest to make an
immediate increase in rates for the pur-
pose OF increasing the revenues of the
Railroad Administration during Federal
control.
"A fundamentally wrong conception
is involved in the claim that the Presi-
dent ought TO exercise the emergency
rate making power conferred upon him
for the purpose of deciding as between
the railroads and the public what the
former shall charge and what the latter
han af aho
end. The theory of Federal control
was that the Government would guar
antee a rental during Federal control
but not afterwards, The idea OF course
was that after Federal control the per-
manent statutory procedure could be
looked to by the railroad companies to
secure for themselves adequate com.
pensation.
THE resolution OF the railroad execu.
tives in effect takes the position that
they are not willing to resort TO the
permanent statutory provisions to pro-
tect their interests, but instead they
want the President to use his emergency
power so as TO provide for their com
pensation after Federal control.
''In addition to having guaranteed
them their return during Federal control
there is no duty whatever, either Legal
istration to institute for the benefit OF
the railroad corporation rates which II
believes TO be ineXpedient to initiate for
its own benefit, On the contrary the rail-
road companies have the power to pro-
tect their interests In this matter Just
as fully as they had In the past, and
they ought to resort 10 It unless they
choose to stand on the rates as they are
with regard 10 the position sug.
gested by the railway executives thai
the Railroad Administration ought to in;
crease the rates because of the Railroad
Administration action In increasing tht
expense, this could not be true as to in,
crease In expenses which would have
taken place II the Railroad Administra,
tion had not been in existence In view OF
the extraordinary increases in expense;
OF all forms of industry under private
management.
There is no basis for demonstrating
that the increases In expenses of the
Railroad Administration were dhe tC
any cause other than those which af
fected all forms OF industry and henc,
no basis for claiming that temporary
emergency power OF ratemaking durinE
Federal control should be employed fol
the exclusive purpose OF meeting then
after Federal control shall have ceased
III the Railroad Administrator
deemed II expedient TO increase rates fol
its own benefit It would still be tru,
that the increases II would make in or
der to defray expenses of unified opera
tion of all the railroads in the country
might be very different from the in
creases which would be necessary tC
protect the separate railroads or sep
arate territorial groups of railroads II
different parts of the country"