Evening journal., 1920-03-10
S200,0OO,OOON
Freight RAISES
Under New Railway Law
Rates Will Be Increased
20 to Is Per Cent.
MUCH REVENUE
is NECESSARY

WASHINGTON, March i0.-Roilroa,
freight rates win be increased from p
20 25 per cent September 1. when thl
financial PROVISIONS Of the new rail
road law becomes effective. Practi.
cally all estimates made by railway
men and Government authorities here
on the effect Of the fixed return pro-
visions OF the new law run between
these figures. This means a general
freight rate increase that will aggre-
gate about 200,000. .00d-a year In addl-
tional revenue for the railroads.
Much has been printed recently
about the prospect OF rate increases
now that the roads are back in pri-
Nate control. Statements have been
made that the railroads would ask IN
creased rates, and that rate cases
were TO be heard by the Interstate
Commerce Commission probably re-
sulting In increases. Under the law
u Is not necessary for the railroads
70 ask rate Increases, and rate cases
designed 20 generally increase rail-
road revenues are beside The question.
Present rates are continued until
September and otter that rates are TO
be fixed by the Interstate Commerce
Commission on a basis that will give
10 the railroads a return as near as
possible to 3 f-2 per cent. on the
aggregate value Of property devoted
70 the uses OF transportation. The
commission may FIX them so as TO
give an additional one-half Of per
cent. for non-reducing improvements,
II in the opinion Of the commission
this is necessary.
In the present test period the rail-
roads earned an average OF S9i7. 100000
year in net operating income. In
1918 under Government control they
earned only s5l600000O.
Under the new law the commission
must IND the value OF property de-
voted to transportation use. This
value. as carried by The commission In
It's account at present, is about s2O.-
o00O00000. 5 10 per cent. return on
this would mean net operating rev.
enue for The roads Of si.i00OO0OO0. or
an approximate 25 per cent. increase.
The Interstate Commerce Commits |
sion win begin hearings March % 10 |
iermine how or in what manner the |
financial provisions OF The new act |
shall be applied Hearings will be \
given 10 all persons interested in rate |
adjustments which should be made |
and the figures that are TO be used in |
representing the fair value Of rail- |
road property in The uses Of transpor-
talon. The commission also viii /
consider the number and boundaries
OF the rate districts into which the |
country is 20 be divided.
While % per cent rate increase
appears to De necessary TO raise rev
enues up to the 10 per cent, level
The volume OF tranlc will be a con
siderable factor in fnal determination.
Increased traffic would make for in
creased earnings from the present /
rate basis and this will be given care |
ful consideration. it Is expected.
Railroad men are prepared to press
ne issue as to amounts 90 be allowed /
Tor maintenance Of property In max |
ing the new determinations. Under
government control maintenance ex-
lenses have been kept 10 the pre-war
eNel and many railroad executives
IRE Of the opinion that this has re-
suited in large amoun, OF deferred
naintenance That must be met.
one OF the most important OF the
questions to be determined by the