South Bend news-times. (South Bend, Ind.) 1913-1938, 1920-08-02
NEW RATE RAISES
TO Be EFFECTIVE
EARLY NEXT MONTH
Experts Will Begin Task OF
Preparing Tariff Seized
ules Today.
BY Associated press.


WASHINGTON. Aug. 1.-Rate in
creases granted the railroads by the
interstate commerce commission are
designed 10 give the carriers an an
nual net operating income Of ST.
134.000.00O or $241,0G0. 600 more
than the standard return allowed
by the government and based on the
average Of the three-year period i'm
mediately preceding federal control.
This sum is S34,000.000 more than
the roads made I'm their record wear
Of 1915. but is $4,000, 600 less than
the total of $l,233. 100000 net Oper-
ating income which they sought in
presenting their application 10 the
commission.
Regin Work Today.
Rate experts of the carriers will
be set TO W erik Monday on the tre-
mendous task OF preparing the new
tariff sCredules which ii is planned
10 file in time for the increased rates
freight. passenger and pullman, TO
become effective on September 10.
On that daSe the government guar
antee of the'standard return OF SS93,-
900, 900 annually VIII expire under a
provision of the transportation act
limiting this guarantee 10 six months
after the carriers were returned 10
private control.
Experts of the com mission and the
carriers also viii undertake 20 figure
the actual money return which will
accrue TO the roads from the rate
increases granted. which are about
SO per cent on freight rates. 90 per
cent on passenger, excess baggage
and milk rates and 50 per cent on
charges for space in sleeping and
paTlor cars.
Estimate Increase.
The actual increased amount TO b.
received by the roads as q result of
the rate advances has been roughly
estimated at $500. .OOO. 600. but until
put into operation the exact amount
the new tariffs are worked out and
is problematicaL With passenger
fares increased one-ffth and pullman
charges One-half. passenger travel
probably will be reduced.
Based on the present passenger
traffic these increases are expected 10
WELD the roads a return of $27 600. -
0O0 oil Of which was sought 20 help
absorb the wage advances to railroad
workers which the railroad labor
board has informed the commission
will work out at S61S,OOO,0O0. instead
of the $500. 100000 first estimated.
The carriers have figured the in
crease at 1925. 100000. but for the
purposes of the rate case the cont
mission used the boards figures
Operating Income.
The estimated net operating in
come of s1,I34.OO0.O0O which the
roads are 10 receive as result Of
the rate raises represents six per
cent Of the aggregate value Of the
railryad properties which was placed
bv the CT: ui -ss-Cn At So 4hh. .tHp
or S1.14O..0OO. less than the car
rlers' estimate. OF the total income
received by the roads. ono half Of
one per cent Of the aggregate value.
or S94.0OO,O00 must be set aside an
ruAlIv for additions and bettcrments.
Thus the actual net operating income
gcing into the treasury Of the car
riers would be s1.e40. 100000. From
this must p ededucted taxes and 9TH
or fixed expenses not included in cp-
Grating expenses before the actual
net income IS determined. Admit
tedly taxes and most other OF such
fixed expenses have increased since
the pre-war period on which the
standlrd government return IS based
Reserve Fund.
Should the commissions decision
result IN producing more than the
six per cent return on the aggregate
vof-e allowed under the trauspOrta-
ton act. one half OF the excess
would under the terms Of the act
be placed in the reserve fund and
the other half turned over 70 the
interstate commerce commission TO
establish a revolving fund 10 be
used for llablng loans 20 the carriers
OF for purchasing equipment 20 be
leased 20 them.