Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-05-05
ROADS, NEEDSPUT
AT S1,017,QDQ,oDO
Seek Freight Rate Advances
to Raise Their Income to
6Per Cent.

Railroads of the United States
through the Association of Railway
posal to the Interstate Commerce
Commission that freight rates be in
creased to bring in an income Of Sl.0l..-
600. 900 additional. necessary 10 raise
their income to the per cent basis pro-
vided in the transportation act.
Advances in freight rates proposed
by the association were: Eastern
roads. 30.4 per cent to yield an adj
vance in all revenues Of ell per cent.
or so44000.000: southern roads. 800
per cent. to provide 20.7 per cent
larger revenue: western roads. e3.9
per cent.
Formally Opens Rate Case.
Negotiations have been going on
between the commission and the rail-
| road executives for two months past
and presentation of the figures
| marked the formal opening Of the
| rate case. While detailed statements
i submitted TO the commission covered
only the eastern lines. estimates of
the needed increase Of the western
and southern groups accompanied the
initial suggestions on which the COM
mission is to determine an entire new
rate structure.
Daniel Willard. president of the
| Baltimore end Ohio and Cha irman Of
the executives rate committee for the
eastern territory, laid before the COM
| mission rate figures for la eastern
lines. Similar statements showing
| the requirements of the western and
southern carriers will be supplied the
| commi ssion in few days.
| Tell Of Drop in Iacome.
In their petition the roads asserted
that the net income of all the roads
fell from s1.O56.000.000 in 1915 to
$510.0O0.000 last year, while their in
vestment has increased more than
$1,000. 100000. These figures were sub
mitted to serve as a basis from which
| the commission could work in derei-
| government guaranty. Mr.. Willard
placed an estimated valuation of $780,
I616.000,000 on the transportation sys-
tenn of the country. The statement of
the executives declared that while
there has been an increase in operating
the roads basis Of revenue for the
same period has been increased only
3631 per cent. Operating expenses o!
the lines are now 80 per cent Of the
revenues as against IS per cent in
1916.
two years face the renewal Of nearly
$250,000.000 in maturing obligations.
Mr.. Willard said. THE carriers must
now reassume the burden and risks Of
operation in q period of uncertain
conditions affecting business general
ly," he said. Demands for additional
facilities and extension were never
50 pressing as now. The cost of new
capital is more than Z per cent per
annum, even to those railroad COM
panies whose credit is the best
Sees No Hope Of Cost Decrease.
Mr.. Willard urged the commission
not to use statistics on revenues and
expenditures for 1919 in future calcu-
latfons. since much Of the traffic was
incident to rehabilitation Of the Army
and to other unusual conditions. He
said there is nothing in the existing
situation to justify the expectation
that either wages or material prices
soon would be lower. On the other
hand. he said, the public expected 8
Investment of the eastern lines wa.
placed by Mr.. Willard at $a.368, 0O0. 600
which would earn 1852, 121 900 at 6 PEI
cent. But for the year, ended October
81. 1919. the net return was onl!
SIS. 00s.00G, he said. leaving $4,000. 90
to be supplied through advanced rates
Computation of the eastern roads
requirements. however. Mr.. Willar,
said, did not take into consideration
pending wage demands nor a possible
readjustment in the contracts between
the rail lines and the Pullman an,
express and other companies.
Touches on Roads Condition.
He touched on the question of tn
roads condition also. to the extent tina
there was possible undermail
tenance which may have occasioned al
understatement Of expenses for 1919"
Mr.. Willard warned that unless ade
Quate transportation service was pro
vided serious consequences would b
brought on the whole public. includin,
shippers and carriers alike" II
argued that the commission should ge
and use all information and "resolv
all reasonable doubts in favor of tn
higher rates and charges shown to b
necessary. for on that side lies safety