The western sentinel., 1920-05-25
FREIGHT INCREASE
HEARING BEGUN BY
THE |. {. COMMISSION
Roads Claim They Must Raise
Over a Billion By Freight In
crease To Stay in Business
THEIR POSITION STATED
Returns At Present Not Sufficient To
Attract Capital, As Few Roads
Can Compete With Indus
trial In Dividends; Claim
Situation Serious

not take into account any increase
in wages which the railroad labor
board may grant the 100000 rail-
way employees, Howard Elliott, of
the Association of Railway EXecu-
tives, stated today before the In
terstate Commerce Commission.
Washington, May 24.--Represen-
tatives of every interest concerned
in the operation of the country's
railway system, as well as the pub
lie, were here today for the open
ing of the hearing by the Interstate
Commerce Commission hearing on
applications for increased freight
rates. The road owners have claimed
that in order to meet the situation,
it will be necessary to increase. the
earnings of all the roads by $1,O17,-
100000
To provide this sum the carriers
have recommended that rates in the
Eastern group of roads be increased
30.4 per cent, those in the South
800 and those in the Western group
23.9.
Method of fixing the valuation Of
the railroad properties, on which
the government guarantee will be
based, will be one of the questions
threshed out at the hearings. All
interested parties will be given an
opportunity to present their claims,
both as to the proposed increases in
rates and the valuation problem
Howard Elliott, chairman of the
subcommittee of the general rate
committee of the Association Of
Railway Executives, was called to
open the case for the carriers.
Increases in freight rates of 3O.43
per cent in Eastern territory, 3O.95
i'm the Southern territory and 23.9l
per cent in Western territory ITO
meet the difference between the six
per cent returns on property returns,
permitted under the transportation
act" were advocated here today by
Howard Elliott, chairman of the
subcommittee of the general rate
committee of the Association of
Railway Executives, in statement
before the Interstate Commerce
Commission.
Mr.. Elliott pointed out that in the
Eastern territory roads for the year
ending October st, returned on
property investments Tess than
one-fifth of one per cent" In the
Southern territory, he said, the re-
turns were less than three-fourths
of one per cent, and in the Western
territory slightly more than two per
cent For The country as whole,
the return was said to have been
slightly more than one per cent
Under the conditions OF private
ownership and operations of rail-
roads with governmental regula-
ton, protection and encourage
ment," Mr.. Elliott said, "the rail-
roads must obtain hearings enough
to meet all obligations and have
sufficient credit to sustain them IN
competition with other forms OF IN
dustry into which people put their
time, brains, energy and money"
Under the new transportation act,
he said, the two pressing questions
now under discussion by the inter-
state Commerce Commission and the
newly created labor board are the
requests for wage increases, exceed
ing $1,000, 100000 a year, and an
additional S1,017,000,0OO needed by
the railroads to meet the present
basis of wages, costs, interests and
nayment of dividends, improve
ments, etc.
Now there is congestion and diff
ficulty everywhere" said Mr.. Elliott
"Fuel, building materials ana raw
materiats-for manufacture are tied
up and industry is threatened and
the sluggish movement of grain and
food of all kinds makes the feeding
of our people more difflcult ana
more costly"
Mr.. Elliott declared that the rail-
road operators were just as de-
sirious of obtaining a fair ADJUST
ment of wages for their 100000 or
more men, as they receive the in
creased revenues. He said there is
man-power, brain-power, courage,
common sense and vision enough in
the country to succeed If all will
null together work long and hard,
and eliminate selfshness, waste and
extravaganza" :.
In justification Of the railroads
position, he said that tho price of
transportation had not increased
nearly so much as the cost of pro
duction. Expenses had gone up at
least 100 per cent, while revenues
had increased less than 40 per cent.
He referred to conditions in Euro
pean countries, where, he said,
freight rates had been raised as
follows:
England, II per cent; France, 14O
per cent; Belgium, 100 per cent;
italy, 40 to 100 per cent; Poland,
70 to 140 per cent; Sweden, zoo per
cent; Norway $50 per cent.
1.-THE transportation act" said Mr..
Elliott, Sin fixing the rate of return
at 5h and per cent for a two
year period might have been suf-
ficient in the past, but is wholly in
adequate to meet the present situa-
ton. The cost of new capital in the
United States today, as is we'll
known, is In excess of Z pcr cent.
The Bank of England discoun. rate
Ii now 7 per cent, a rate which only
seven times in the history of that
old institution has ever reached
that level"
In expressing the desire OF the
railroads to help the labor board
and the Interstate Commerce Com
mission in reaching fair and equit-
able conclusions, Mr., Elliott said
that the officers of the companies,
as quasi servants, realize their part
in adjusting the great questions be-
fore both bodies. They desire an
adjustment of rates that would
meet the letter and spirit of the
new law, make the railroads self
and relieve the treasury
Of Che United States from the ne
cessity of constant appropriations.