The Richmond Virginian. (Richmond, Va.) 1910-1920, 1920-02-24
Higher Freight and
Passenger Rates
Soon to Follow

Washington, Feb. 23-The rail-
roads of the country, shortly after
they pass into private control on
March /, will ask for and will be
granted increases in freight rates
amounting to about 90 per cent. and
possibly even more,
Under the terms of the Cummins-
Esch bill, which passed the senate to-
day and now goes to President Will
son for his signature, the railroads
are guaranteed rates which will pro-
duce return of five and one-haf
per cent on their capital stock.
To effect this. 1t was learned on the
| highest authority tonight 1t will be
necessary to increase freight charges
all along the line a minimum VI 20
| per cent. Some OF the roads, par
| ticularly those in New Eng land 1t
was learned. will ask for rate in
creasas UP to 30 per cent, which they
say are absolutely necessitated to in
sure them sufficient revenue.
| Passenger fares also may be jumped
/ up. although the increase is not ex-
/ pected to be in proportion to a 20
| per cent raise in freight charges This
ia explained by the fact that in great
/ " increasing passenger fares, which
directly affect the individual, the rail-
I
might arouse such a storm OF public
dIsa pprovai that congress might prac-
Iticallv be forced to enact legislation
providing for some form of govern
ment control.
| In this connection II IS known that
some of the principal roads originally
| intended to represent to the intersta te
commerce commission that they
| would need an increase in passenger
70 ~ al CT
| larger freight rates, to guarantee their
revenues. This exorbitant demand.
! however has been abandoned, il is
, understood on the ground that ii
would eventually kill the goose that
LAYS the golden eggs.
! There is no further doubt in the
1 minds of officials in close touch with
the railroad situation that the inter-
state commerce commission win hs
compelled to allow the roads a good
+! 20 per cent increase in freight rates,
and possibly. even a small increase in
passenger fares
4 A high official OF the railroad ad-
/ m inistration said tonight that no such
increases would have been necessa ~
had the roads been continued under
Il government control This unitication
of control and operation, he explained
reduced the tremendous overhead ex-
penditures made necessary by fndivid-
Il ual operation of each road, such rs
Twill exist after March 1.
Il That such an increase viii be a
staggering item in the already high
cost OF living is also the opinion oil
railroad administration officials Its
effects may not become apparent tc
the general public for sometime. be
cause of the fact that the increase.
will be so well distributed all alonn
the line But the shipper will be
compelled to charge more to trans
port all commodities. 1t Is pointed out
land the producer will also add an in
crease. which In turn eventually viii
be tackled on by the wholesaler, com
mission merchant and retailer.
1t is thus conservatively estimated
that the cost OF all the necessaries 81
life will be from I'VE to ten per cen
4 higher as a direct result of the com,
4 ing increase in freight rates, and
possibly passenger rates.
Director Hines today sent to caci
| of the regional directors telegram
4 requesting them to be prepared t.
. hand over the country's railroads q
their private owners at 1901 A NJ
] March /, in accordance with TIL,
presidents proclamation.
4 Director Hines called upon pr~si
! dent Wilson today, and is u,\ ~
stood to have left with him menu
randur on The Cummins- TEscn rail
road BILL which will enable the uresi
I dent thoroughly to understand All il
/ points when the bill comes to hin
for his approval or disapcroval.