Omaha daily bee., 1920-02-25
A Dangerous Railroad
+, Situation
From Kansas City Star.

1t is no longer railroad question that i.
before us; 1t is national question; and if
the people in congress do not wake up to the
lack Of railroad facilities that will be worse
than the panic of 1873, which was brought
about by over-construction of railroads.
Railroads simply must have credit or they
cannot furnish the facilities the public re-
CURES. Railroad credit cannot be re-estab-
lished unless we have an advance in freight
rates sufficient to yield a reasonable return
on the value OF the properties.
The words here quoted were not put forth
to influence public sentiment or to affect the
attitude of congress. They are in confidential
who never was an alarniist. to a friend in Kan
sas City, setting forth in intimate correspond
ence his opinion of the present situation.
Generally the public attitude toward the
railroads has been that they are capable of
taking care of themselves. And the govern
mental activities must be directed to holding
them in check and keeping rates down rather
than to strengthen and expand the transporta-
ton facilities.
Now different condition confront. the
country. country Every shipper know: that traffic is
supplies Of cars and locomotives. The situa-
tion Is much worse than before the government
took control and it was bad enough then.
Every big Industry In the country is handi-
capped by inadequate railroad facilities. Grain
a. last a. frners want to sell. Coal cannot
be hauled from the mines as rapidly as Il is
taken out Of the ground.
The big steel mills are piling up orders faster
than the product can be shipped. There is real
danger of distressed and hampered commerce
and industry unless the railroas expand
Railroad expansion means more capital in
vested in them; but there is little inducement
to invest in new railroad bonds and stocks
when they are yielding less income than in
OF Rilroad credit is shown in the quotations
for their stocks and bonds. Most of them are
Of 1907. w '0'' ~ ''' '''A'''a' pA''''
Financiers and operators of railroads say
that substantial advance in freight rates is
necessary to give them the credit necessary to
attract new capital for buying cars and iocomo-
tives and enlargng their carrying power.
Naturally the public balks at this 1t has al
ways done so, and the governmental agencies
that regulate railroads have always sided with
the public in this attitude. Is it justified? Has
it been carried too far?
julius Kruttschnitt, president of the Southern
Pacihc, recently compiled from official sources
some interesting comparisons Of cost of rail-
road transportation aud commodities. Here arc
some of his facts:
Average freight rates are practically the
same as in 1890; commodity prices have
doubled
The average value of freight per ton ham
died in 1914 was $50; in 1919, $1lo; average
of freight charges per ton in 1914, 81; in 1oio,
$3.50; increase in value of commodities car
ried, $50 ton; increase in freight charge, 80
cents a ton.
Only 1,3 per cent of the increase in the
cost of living in the past five years is az
tributable to advance in transportation
charges.
In the light Of these facts, it appears that
railroad transportation, after ALL is about the
cheapest thing in the country, and the public
must become yeconciled to higher rates if the
railroads are to be enabled to meet the growing
demand for TRANSPORTATION,