Arizona republican., 1920-08-20
ISSUES STATEMENT
 ON CALF. DECISION
 O|V RAILROAD RATES

Following newspaper reports of the recent decision of the California state railroad commission granting the ap plication of the carriers for increased intrastate rates, Henley c. Booth, Southern Pacific attorney, who pre- sented the case to the commission for all of the steam railroads and most of the electric railroads, issued the fol- lowing explanatory statement:
 The California commission in fof- lowing the same percentages as those fixed by the interstate commerce com mission is in accord with a majority or the state commissions that have 50 far acted on the applications of carriers to conform to the transportation act by making the interstate percentages uniform in the states. The. order Of the interstate commerce commission was entered after a very full hearing to which the state commissions were invited and in which most of them par ticipated. 1t was in pursuance of the national plan of rate regulation estab- lished by the transportation act or 1920 which is that the interstate com merce commission shall divide the railroads of the country into groups, value them by groups and establish rates by such groups which shall pro- vide a fair return on the group valua- ton so ascertained.
 The act states that it is expected that such method will produce in the case of some individual roads or sys- tems more than a fair return on the value of the property Such excess Is 1 taken care of by the provision that one-half shall be paid to the United States to be loaned to less fortunate roads for the purpose of purchasing 1 equipment and for other specified pur- poses. The remaining one-half is to be placed by the railroad in a separate | fund which can be drawn upon only | for certain specified purposes and un- der the supervision of the interstate | commerce commission. The plan is I one of stabilization of transportation
 systems, not by state lines or by indi-
 vidual roads. but by transportation
 groups.
 l Tt recognizes that the nation must
 have proper transportation and that | whether the railroads be publicly or privately owned they must be sup l ported either by adequate rates or by public taxation. Adequate rates are economically collected. If a transpor- 1 tation deficit resulting from too low
 rates is paid out of the public treas ury 1t means the continuance of large i part of the present burdensome taxa | tion under which there is inequality l great expense of collecting and much
 evasion or failure to return taxes eff l fected in addition to the furnishing of
 excuses for both large and petty | profiteering.
 "The interstate commerce commis-
 sion used as one of the bases for its order the gross revenues from both state and interstate business of all the | railroads of the Mountain Pacific I group, the territory west of Denver. l Cheyenne, Albuquerque and Fl Paso In the figures for this group, but not separately stated in the commission's | lar fr1fe- for of all the railroads in that group from I both state and interstate business l These included the gross receipts aris- l ing from the operation by the director l general of the Southern Pacific, Santa F'e, Salt Lake, Western Pacific and 1 Northwestern Pacific lines in Califor- nia during that year which were in- I trastate. That is to say, where the haul was entirely within California freight, $43, ,165, ,520.44; passenger, $23,- 30,164.62. Interstate, that is Califor- | nia's proportion of business beginning and ending within the state: freight l s52,592, ,S2101; passenger, $16,574 ,240.72 l These figures show the extent to whicf l the voluntary occurrence and co -op.
 eration of the commission was neces. sary in carrying out the national plan l Smaller roads in California of cours,
 had a much larger percentage of loca or state business.
 While most of the electric road
 not operated in connection with stean
 lines were not subject to the commis
 sion's order, it is we'll recognized an,
 was shown that the financial condition
 of most of them was very much wors
 than that of any of the steam roads
 Of the electric lines. the interstat
 commerce commission said: The op erating cost of these lines have on tn
 whole increased in approximately tn same ratio as those of steam lines In addition to this there was the con trolling consideration that in prac ticaIly all cases these electric lines ar competitive with steam lines whic neeessitates the maintenance of tn same rate level"