The news scimitar. (Memphis, Tenn.) 1907-1926, 1920-08-06
The Railroads.

me advance IN ITelEnt anu passenger
rates authorized tho other day by the
interstate commerce commission was
not merely for the purpose OF meeting
the Ss25 900. 900 increase in the an
nual budget made necessary by the
wage award OF the labor board The
rate raise followed up the wage in
crease, and took care Of Il, but tina.
was only one OF the items 1t covered,
The rate raise Is expected TO bring in
to the roads OF this country an ad-
lion end half dollars.
The interstate commerce commission
did not suddenly get magnanimous with
the peoples money and authorize reve-
nues In excess Of what the roads had
demanded The roads wanted even
more than they got. In fact, they got
something like 30 per cent OF what they
asked
The roads were not paying expenses
even before they figured on the new
wage scale for their employees. They
were not paying expenses even with
what equipment they already had, much
less when they figured in the cost OF
improvements that ,uould no longer be
postponed.
The interstate commerce commission
seems TO have desired to put the rail-
roads on their feet. II took the word
Of the federal reserve bank officials
for the fact that the disorganization
OF the railroad system OF this country
was the worst single fact in our whole
economic life. It proposed to make
the roads capable OF handling the busi-
ness of the country.
The roads are entitled to such rates
as enable them to make reasonable
dividend on their Invested capital. The
six per cent they want to make Is less
than what money will bring In many
other lines OF perfectly safe investment
today.
Unless the roads can assure their IN
vestors Of such dividend. they will
get no capital. Before the commission
awarded them the rate increase, they
had tried almost in vain to get capital
for their schemes on terms they could
afford to consider The roads OF the
country had managed TO raise in the
bond market just 10 per cent Of their
needs.
The revenues under the new ratcs
will attend 10 all the items. They viii
take care of the increase In wages from
this time on; they will take care Of the
back pay owing from May 1; they will
make up some recent deficits; they
will obvlate any immediate further
deficits, and they will enable the roads
to assure investors OF dividends so safe
that they can get the required sums
of new capital on which to buy rolling
stock and improNe their present equip
mcnt.
II is said that the manufacturers OF
rolling stock are all ready and set to
turn out orders for the roads with all
speed They are not caught by sur
prise In the present situation, and the
shortage in freight cars may be made
up before the people believe it.
On the whole we can see some sense
in a serious argument conducted recent
" by responsible trade journal 10
the effect that the increasing OF freight
and passenger fares for the benefit OF
the roads out OF the pockets OF the
public would be the greatest economy
that the country could possibly practice
under the circumstances
We hope that win prove to be the
case We are sure there are good
brains in the railroad business. and
we should imagine that by this time
there ought to be some good hearts.