New-York tribune., 1920-08-02
Various Commissions To
Be Asked to Grant Same
Advances /. C.. G.. Per-
mits Interstate Business
Carriers Counted
On This Increase
Will Not Add to the Total
Income Provided by the
Federal Board Decision

terstate increases authorized yesterday
bv the Interstate Commerce Commits
sion will be asked of the various state
railway commissions by the carriers, it
was stated here tonight by Alfred P.
Thorn. general counsel for the Associ-
alton of Railway Executives.
Such intrastate rate increases, Mr..
Thorn said, will not add to the total
income provided for by the Federal
COMMISSIONS decision because in sub
mitting their estimates the carriers
calculated on a basis of increases of
both Interstate and intrastate rates.
Applications to the state commissions
are now being prepared by the rail-
roads, and 1t is expected by the rail-
way executives that the increases will
be granted. Should any state commits
sion refuse to authorize them, however,
the carriers. Mr.. Thorn said, will pro-
ceed under the transportation act and
ask q hearing before the Interstate
Commerce Commission to determine
whether the existing intrastate rates
discriminatory or prejudicial to
interstate commerce.
State Representatives at Hearings
1t was pointed out by Mr.. Thorn that
three representatives of the state COM
mission sat with the Federal commits
sion during the public hearings on the
application of the carriers. They will
make reports to the state commissions,
aNd Mr.. Thorn said it was thought that
their opinions would have weight with
:he state bodies.
Since the increases in passenger,
Pullman, excess baggage and milk
rates we're made general for the en-
tire country by the Federal commits
sion the railroads will ask for CORE
spending increases in each state. The
percentage of advances in intrastate
freight rates which the roads will re-
quest, however, will correspond to the
percentage authorized in the territory
IL which the state is located, Thus
Increases requested in Eastern states
would be DO per cent; in Southern
states, % per cent; in Western states,
35 per cent, and in mountain-P Pacific
states, 25 per cent.
Rate increases granted the railroads
by the Interstate Commerce Commits
am annual net operating income Of
100000, or $241 100000 more
than the standard return allowed by
the government and based on the aver
age of the three-year period immedi-
ately preceding Federal control.
This sum is $34,000,000 more than the
roads made in their record year of
1916, but is S99,000,000 less than the
total of S1,233 900 900 net operating in
come which they sought in presenting
their applications to the commission.
Experts Start Work To-day
Rate experts of the carriers will set
TO work tomorrow on the tremendous
task of preparing the new tariff sched-
ules which it is planned to file in time
for the increased rates-freight. pas
senger and Pullman-to become effec.
tive on September /. On that date the
government guaranty of the standard
Teturn of $893,000,000 annually will ex-
pre under provision Of the transpor-
taAon act limiting this guaranty to six
months after the carriers were returned
% private control.
Experts of the commission and the
carriers will also undertake to figure
lhe actual money return which will
accrue to the roads from the rate in
ereases granted, which are about 33
per cent on freight rates, 20 per cent
on passenger. excess baggage and milk
rates and 50 per cent on charges for
space in sleeping and parlor cars.
The actual increased amount to be
received by the roads as a result of
ne rate advances has been roughly
estlmated at $1,500,000,00O, but until
me new tariffs ale worked out and put
iAto operation the exact amount is
fFoblenatical. With passenger fares
increased one-fifth and Pullman
charges advanced one-half passenger
:ravel probably will be reduced.
To Help Absorb Wage Raise
Based on the present passenger traf-
nc, these Increases are expected to yield
the roads return of s277 100000, all
OF which was sought to help absorb
the wage advance to railroad workers
which the Railroad Labor Board has
informed the commission will work out
at s61S,OOO,000. instead of the $780,
100000 first estimated. The carriers
have figured the increase at S625,000,-
VoO. For the purposes of the rate case
the commission used the boards fig
ures.
The estimated net operating income
OF Sl,134, 100000 which the roads are 10
receive under the new increase repre-
sents per cent on the aggregate value
OF the railroad properties, which was
plgced by the commission at $1S,900,-
10000, or $i,140,000,000 less than the
carriers estimate. Of the total in
come received by the roads one-hali
Oh per cent of the aggregate value, OF
$4,000, 900. must be set aside annually
1or additions and betterments.
thus the actual net operating in
come going into the treasury of the
carriers would be $1,040,000,oO From
this must be deducted taxes and Other
hxed expenses not included in oper
atlng expenses before the actual ne
income is determined. Admittedly
taxes and most others of such fixed ex
penses have increased since the pre-
war period on which the STANDARD
government return is based.
Should the commissions decision re
suit IN producing more than the 6 PEE
cent return on the aggregate value
allowed under the transportation act
one-half of the excess would, unde
me terms of that act, be placed in tn
reserve funds of the roads and th'
other half turned over to the Inter
state Commerce Commission to estab
iisn revolving fund to be used TO
making loans to the carriers or TO
purchasing equipment to be leased t.
Six Per Cent Net Income Fixed
The estimated net income to be re
eeived by the three groups of roads i
aNed at Der cent of the valuation
Continued pass 81