New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1920-08-01
Roads Fought
For Billion i'm
Rate Increase
Shippers Opposed Demand
as Excessive and Were
Supported in Position
by State Commissions
Unified S ystem Urged
Counsel for Shippers Told
Interstate Board That
This Was Only Way to
Solve the Rail Problem

WASHINGTON, July BIN present
ing their original applications for
freight rate increases the railroads
commended before the Interstate Com
merce Commission that S1,107,oO 900
was necessary to advance their income
TO the 6 per cent basis permitted by
the new transportation act. Shippers
and state commissions generally agreed
that some advances were necessary,
but they opposed both the total and the
method of application.
Passenger rates, the carriers pro
posed, would be left unchanged, and
their program of advances, applicable
throughout the country, did not take
into account. any wage increases made
by the Railroad Labor Board.
The advances as proposed were:
Eastern roads, 3O.4 per cent, to yield
an advance in all revenues of 21.1 per
cent, or s544, 5000.
Western roads, 239 per cest. to adj
vance all revenues II per cent or $685.
S93, 900
Southern roads, 800 per cent, to pro-
vide 20.7 per cent larger revenue, or
$3.50, 770,oOo.
Ask Separate Treatment
Apart from these advances. thirtv-
eight roads in the Southwest asked
separate treatment from the Western
classification and a rate increase of
1928 per cent.
Alter the wage award was announced
inc carriers proposed to the commits
SION further increases in freight tariffs
and higher passenger and Pullman rates
TO absorb the $626,000,000 additional
granted the workers. Freight rates,
they proposed, should bear an add
uonal per cent advance, amounting
TO 1888 ,37O,675. AS modified finally the
carriers full proposal was for total
advances on freight and switching
charges as follows:
Eastern roads 1915 per cent. to
yield an advance of S726, 100000.
Western roads 1908 per cent 70
yield $475,000,COO
Southern roads 1891 per cent. to
yield S154 100000.
he carriers also proposed 20 per
cent increase IN passenger rates to
'N-N "-o'.N-' : 90, or Sl1I .bOS.JSD Tor
Eastern roads; S92 1872 500 for Western
roads and 29.826,4O1 for Southern
roads. To provide the remaining $50
100000 to meet the wage increase tho
carriers proposed so per cent sur
charge on parlor and sleeping car
rates to yield $43 500 ,344; an increase
OF 70 per cent in excess baggage rates
to yield 81 420,99 and an advance on
MIX rates proportlonate to Che freight
rate increase to yield $500 ,089.
In the hearing of the original appli-
ca'icn OF the roads for freight in
creases to yield S1,017, 900 900 an
estimated valuation of s20,616 600 600 100
placed on the transportation system
by thetr owners was questioned by both
Shippers and state utility commissions.
who complained that book value" was
unrelab!e, while the carriers contend
ed that their figures were conservative
especially because of rising cost of
materials and equipment Increases in
passenger rates, and flat freight in
creases instead of the percentage ad-
Nanccs, also We're advocated by ship
pers to eouallze the burden of anv adj
vance.
Fall in Net Income
Setting out the necessity for the in
crease. the railroads asserted that the
net income of all of the country's
roads fell from $1,O56, 900 900 in 19lf
to So10,O00,000 in 1919, while their in
yestment was increased more than Sc :
900 100000. Operating expenses. the
roads sand, have increased 99.1 per cent
SINCE 1916 and revenues 36.37 per cent
Operating expenses, it was added, are
now 80 per cent Of the revenues
against GS per cent in 1916.
Arguing for the increases. the rail
road executives said the 100000 OOC
OF added revenue was necessary if the
roads were to handle tie nations com
mercc satisfactorily. They contend ed
that savings promised by them could
not be effected at once because the
roads were not returned to them in INC
same conditions as they were when
taken over and because Of unsolvcd
labor difficulties.
Clifford Thorne, Of Chicago, repre-
senting shippers, recommended to the
commission that the roads be unified
for operation as they were in 1917
declaring that only in this way could
they solve the existing transportation
problem.
Mr.. Thorne also argued that the rate
advances asked were ycessive, as the
carriers had not made any provision
for more efficient operation or for de-
creascs in the cost Of materials. He
also argued that the companies set toe
high value on their properties and
that they were capitalizing land grant
cd them by Federal and state govern.
mcnts without cost and asking the
people to forever pay tax on these
gifts.