The Washington herald., 1920-05-25
MUST ADVANCE Z
FREIGHT RATES
Howard Elliott Tells COM
merce Commission This
Is Only Remedy.
ROADS IN DIRE NEED
Higher Rates Imperative to
Attract Investors Even
On 73o Interest Basis. =
ROADS IN DIRE NEED

The nations railroads earned only
per cent on their property invest
ment last year, Interstate Commerce
Commissioners were told here yes
terday at the opening Of a hearing
TO hH new freight rates.
This statement was made b,S
Howard Elliott, chairman ofthe rate
committee of the Association or
Railway Executives, who began the
argument on behalf Of the roads fors
general freight rate increase to-
falling fi.Ol7 .OOo. 900 annually. .,
Railroad executives and ShIpner-
from all parts OF the country crowd.
ed the Interstate Commerce Conn
mission hearing room for the OMEN.
ing session. Hearings probably with
continue several days. More than
twenty executives and shippers have
asked permission TO present data.
Facilities are INADEQUATE and
service is not being given to tho
extent that is essential, either
freight or passenger" continued,
Mr.. Elliott. y
The railroads have felt that the,
wisesI way TO obtain additional
revenues nDw h'Cdod was through
an increase in freight revenue and
have made their calculations ac-
cordingIy. 90
The country cannot count on
any large contribution &, the nee
earnings through a saving in cIs
pcGses."
Elliott called attention 10 tho fart
that roads now must lay per cent
Ia borrow money. wheT' as furmeTlt'
they paid only and g.
The rate increase now beinE askn
cd to insure a per cent return are
figured on the basis Of nresent or.
Grating costs" Elliott said They
take no account Of increased opers
ating expenses that will accrue N
the Railroad Labor Board grants
100000 employees wage increases,
toaling $1,000 900 annually. "
this is allowed. the roads will have
to be given additional rate in
creases." he added
The price Of transportation" said
Elliott. has not increased nearly
as much as the cost of producing
it. Expenses generally have in
creased 100 per cent but revenues
only 20 per cent.
Now there is congestion and dlr=
hculty everywhere. Fuel. building
materials and raw msJerials for
manufacture are tied uptand indus
try is threatened and the sluEEfsP
movement Of grain and food Of all
kinds makes the feeding 0f our peo-
pie more dificuIt and more costly"
Following his direct testimony
Nv. Elliott was Cross-eNa mined ~
Clifford Thorne. reTresontinE shir-
pers: 8. II. Cowan. re0resentinc
Texas cattle rsisers. and Glenn
Plumb. Of the Plumb Plan League .
Ill
investment banker. was next before
I've commission n" do o-larod ovcnts
OF the next few months would de-
mrmine whether the roads wrrr -
he owned hv the government or by
private interests.
'Hirher rates AZ" needed hN
said to attract investors N rafl-
road securities which must he sold
{" allow an increase of transDorra-
tion facilities"
The per cent return guaranteed
tn" roads in the transportation act
will prove wholly inadequate
Strauss said he believed
Under the transportation act tho
Interstate Commerce Commissio1
must fix rates which will yield the
roads a return of 6 ner cent on thei-
valuations. Anv deficit below this
per cent must he paid to the roads-
by the government under the act
The railroads now are Confninc
their requests for rate increases to
Z freight tariffs. No increase in pas
senger rates is asked or recommends
! ed by the roads.
Chairman Elliott presented tho
commission with this statomcat.
showing the financial condition of
. the roads for the year vnded OctoE
! her 81. 1913
Property investment. S2o.GlG.57a.-
3ss
Six per cent return would have
I been Sl236.99l4O2
Adjusted net operating income.
S2ls.el74O7.
Deficit below per cent return.
lSI.Ol7.776.995
Total freight revenue. sr.sS3a2s.-
,492.
Total all revenues. s. 2aO. .aEI .oa2.s
New freight rates must he 27S
per cent higher on tho above basis
II tho roads are 70 hc able TO pay
per cent on their property invest
ment. Elliott told the commission.