Every evening, Wilmington daily commercial., 1920-04-10
TELLS WHY FREIGHT
RATES MUST co Up
Vice President Elisha Lee of p. X.
r., Says Efficiency Demands
Increase.

In talk made last night before the
Philadelphia chapter of the American
Institute OF Banking last night, Vice
President Elisha Lee of the Pennsylvania
Railroad made comprehensive analysis
of the deterioration Of railroads under
government management and gave his
views of what is needed to bring them
back to their normal state of efficiency
for the public service. MIR. Lee was for
merly connected with the Pennsylvania
system as general superintendent here.
During the last five years, said Mr.. Ice,
an Is per cent increase In traffic Of all
kinds has cost the Pennsylvania 100 per
cent more dollars and required 81 per cent
more men TO handle il. The chief causes
for this condition he ascrbod 10 tho gem
eral lowering of tho sense OF personal
responsibility which. unfortunately, seems
inseparable from working for the gov
eminent; loss of many of the system s
best mon IN the war, some temporarily
and others permanently, establishment Of
tho eight-hour day, inauguration of a
rigid seniority rule regarding promotions
and lay-offs without reference TO diff
ferences in individual ability; abolition
of piece work in the shops, and diminution
of disciplinary powers Of officers brought
about by sanctioning OF appeals TO Wash
ington.
MIR. Lee said that predictions that the
olght-hour day would bring increased eff
ficiency have not been borne out by re-
suits, and 'the reverse has unmistakably
come about" He said the seniority rule
has been carried to illogical extremes, pro-
tecting the Inefficient and careless and
discouraging the willing and ambitious.
Mr.. Lee shows in detail how the great
increase IN wages and operating expenses
has not been equaled by corresponding
increase in rates and earnings. No less
than $500, 100000 is needed immediately
he said, to put the Pennsylvania system
into q position where il can handle traf-
TIC offered. An increase of from 25 TO 80
per cent in freight rates is imperative
An increase in freight rates" con-
tinued Lee, will not in reality add
to the cost of living. The cost of trans
portatlon is even now being paid in full by
the public but il is only partly being paid
In the form of rates, the balance being
made up out of taxation. BY this / mean
that any deficit which existed during the
period of government control or which
may result during the six months period
dating from March /, 1920, is made up
out OF government funds received through
taxes.
''If we arrange in the future so that
this cost shall be paid altogether in rates,
which is the correct economic condition,
the railroads will be able TO raise the large
amount of new capital needed at lower
interest charges than would otherwise be
possible Furthermore the efficiency of
transportation will be SO greatly increased
that the real cost of service in the long
run will be lessened. Service which is
cheap measured merely by the cost per
ton mile, is not necessarily cheap when
measured by its effect on the commerce
of the country"
MIR. Lee stated that it would be un-
wise at the present time to lower rail-
road wages and that the roads could
stand 'the existing wage scale if we
had the old-time loyalty and personal
efficiency. A further increase in wages,
he pointed out, would simply check
against the proposed increase in freight
rates and so make mandatory a second
rate increase which would have to be
placed upon the public.