Evening star., 1920-05-24
INCREASE Of RAIL:
REVENUE MUST Be
PR0N|DEDBYL.C.c C. C.
Alternative of Reversion to
U. S. Ownership Faced at
Hearings Begun Today.
ALL INTERESTS SENDING
REPRESENTATIVES HERE
Necessity for $1,o17, 900, 900 More
In Earnings Is Presented by
Operators in Rate Plea

Increasing the revenue of the rail.
way system of the United States
with reversion to government control
as possible alternative-is the prob
lem which faces the Interstate Com
merce Commission today.
Representatives of every interest
concerned in the operation of the
countrys railways and representatives
OF the public attended the opening
or the hearings by the Interests tafA
commerce Commission on applications
Tor increased freight rates.
In order to meet the 6 per cent re-
turn on their properties. guaranteed
in the transportation act. it will Be
necessary to increase the earnings of
all the roads by 81 OF, ,o00, 900, the op-
orators have claimed.
Salary Increases Not IneluaeA.
The $1.0l7.0o0.000 additional revenue
sought does not take into account any
increase In wages which the Railroad
Labor Board may grant the 2,0OO, coo
railway employees. Howard Elliott Of the
ASSOCIATION Of Railway Executives told
the commission in the course OF his tag-
dmony this morning.
Mr.. Elliott made the opening presen-
tation OF the roads case this morning.
speaking for the railroads OF the coun.
Try as q whole Frederick Strauss of
New York followed Mr.. Elliott to pre-
sent the financial aspects Of the ease.
ana Daniel willard, president of the
Baltimore and Ohio. opened the arxu-
ment for the eastern territorial group
Of roads.
Tho hearings are expected to iast
about two weeks, the railroads con-
sumng at least week in Offering their
evidence OF the necessity for higher
Need Feeliag of seeurity.
Events in the next few weeks. or
months, will determine whether gov
aSain-despite popular opposition-
was the warning sounded to the COM
mission by Mr.. Strauss. The main thinx
at present he said. was to estahlish 4
feeling Of security in the minds az in
vestors.
Government guaranty would nec-
essarily be followed by government
ownership" Mr.. Strauss declared
But the peoples aversion to row
ernment ownership 10 Of no svasl
viii uiie,s nrs916. sgoS Policies are adopted -
Whether government ownershiu
shall come against the win Of TIE
people. or whether . system OF pri-
vate ownership shall once again ob.
the American transpurtation sysfem
was reEardAd a. second to none in
the world, will be determined by fhe
events OF the next few months or
weeks
"Only TIVE ways1
Low nominal rates merely are Of
no use to the shipper, Mr.. StrauSa
asserted. II the trafic is mot move6
in sunident quantity. What the shin
per neede. he argued. is the speedy
movement OF his goods. and there
are only Two ways In which It can
One is by an increased charre for
the shipment Of the goods, he said.
ana the other IL by an appropriation
out OF the national Treasury by =
levy on taxpayers to cover the de6cit.
Railroads at present can offer no
inducement to the investor combining
safe bonds with speculative value, Mr..
meager number Of railroad stocks
that sell above par. Mr. Strauss point
cd out that in order to have railroad
stocks sell at a substantial premium
the earningt of the roads must be
large enough to permit the payment
OF dividends which will compare ia
vorably with dividend rates on stocks
of industrial and other concerns.
The recent remedial Legislation is
good as far as it goes" he concluded.
The return OF s per cent per annum
will, I believe, turn out to be wholly
inadequate. ass time may demonstrates:
but a beginning has been made on
sound lines, and as time goes on Con-
gress will realize that the rate of re-
turn on railroad property will have to
to be had in other industries. or else
government ownership will inevitably
result"