New-York tribune., 1919-01-14
observation-disclosures K7i7Bfed
ByIMcAd00 in nAnnuayRep0rt
Return to Normal Conditions Should Make Grad
ual Reduction Possible, He Suggests--Return
to Advertising System to Get Business Predicted

bottle is the freight terminal, and if
the promptness with which cars can be
handled there is increased, the con-
gcstion, which has in the past so great
y reduced the carrying capacity OF our
entire railroad system. VIII be greatly
relieved.
in the changes made, or still under
contemplation, the prime purpose has
been convenience and service to the
public. The necessary adjustments
may have caused some temporary dis
location, but The ultimate results Will
be increased efficiency and capacity.
Release of Cars Encouraged
in order to effect the prompt re-
lease Of equipment and discourage
ire improper practice OF using the cars
OF the carriers as storage warehouses,
the national code of demuYrage rules
and regulations was modified and the
charges mere ased, following the ex-
rlratlon of the free time allowed which
Itself has not been changed to SO per
car for each of the first four days. SIS
fer each Of the next three days and
$40 for each succeeding day. 1t was
neither expected nor desired that any
increased revenue should accrue to the
railroads by this means. What was
wanted and what resulted Was a con-
siderable increase in the supply of
equipment, thereby made available fer
ether uses
Referring to the increases in freight
and passenger rates last June Mr..
McAdoo,s report declares criticisms Of
the application Of the famous General
Order No. % before and since were
due probably to a lack Of knowledge
or of appreciation OF the difficulties
that have always confronted the Rail
road Adm inistration. He saws:
'ln order to provide for the increase
in wages allowed, the higher prices
that were and are being paid for all
materials and supplies and the rising
costs of operation generally General
Order No. 2S was issued, effective June
-. 1918, as to freight rates, and June
10, i31S, as to passenger fares and
baggage charges, by means of which
naverage advance Of 25 per cent was
made in freight rates throughout the
country. and passenger rates were
raised to a minimum of 3 cents per
mile where they were previously lower.
Communication fares were also advanced
10 per cent.
Increased Rates Justified
"Those advances in freight and pas
senger rates, made only after
thorough investigation Of the then
full estimate Of the probable results,
were designed, as has been said, to in
crease the net operating re- cnues of
the railroads by an amount soout equal
to the greater cost OF operation, there
by leaving sufficient net operating in
come to insure the standard rate Of
return as fixed by law. without draw
ing upon the governments other
sources of revenue.
Some criticisms have been made of
the manner in which this order was is
sued, as well as its method Of applica-
ton These | believe to he the result
of lack of knowledge Of the complica~
tons surrounding the situation and its
necessities. 1t was only after tic Fed
cral control act had been passed by
the Congress and approved by the
President March 2l, 1918, that any
steps could be taken to meet these
constantly rising costs. To any one
familiar with the rate fabric of the
country and It's application by means
OF literally hundreds Of thousands of
tariffs. containing millions Of items. it
was manifcstiy physical inpossibilitv
to secure the advances by the substitu-
ton of new tariffs with corrected items
IN any period of less than several
years.
Possible Reduction Suggested
"Our efforts, therefore, after confer
ence with and by the generous aid of
the Interstate Commerce. Commission,
We've directed toward some plan which
would not only increase all Of the rates
within the shortest possible time, but
also spread that increase as equitaby
and fairly as possible over the entire
country. General Order No. % was the
result, and experience has shown that
1t accomplished the end that had to be
attained with the least possible dis
turbance of business conditions
Sufficient time has not yet ELAPSED
TO judge of the final effect of these in
creases as related to the net operating
income, but it is hoped that with the
return to more nearly normal condi-
tlons reductions may gradually be
made"
Consolidation OF the express busi-
ness, made necessary by the cXigen-
cies Of the situation, has resulted, Mr..
McAdoo asserts, in material benefits
IN various directions.
"The agreement" he says. "has had
the effect Of requiring express COM
panles to put forth their best efforts.
while it has obviated previous