Evening star., 1920-01-13
RAILROADS TO ASK
MORE ON FRE|GHTS
R. w. WooIey Discusses Ef-
feet of rs Per Cent Ad-
vance on Living Cost.

The other side" of the railroad
question concerning probable appli-
cation by the roads for rs per cent
increase in freight rates, increasing
the high cost of living to an extent
now undreamed of, is presented in a
statement on federal operation of the
railroads of the United States made
by Interstate Commerce Commissioner
Robert w. Wooley.
The railroad executives are pre-
pared to file application for gen
eral increase in freight rates." Mr..
! Wooley says.
For months their press bureau has
been trying to lull the people into the
belief that this increase will prove a
benefit rather than a hardship and a
peril. i am Informed that the meas
ure of the increase will have to be at
least 25 per cent. Based on 1918
freight receipts. % per cent increase
would mean sS75.0OO,O00 additional
which the shippers would have to pay
annually. This increase, the shipper
passes along to the consumer or back
to the producer of the raw material,
who has to stand the cost of trans
portation to the primary market
How 1t Affects Consumer.
The consumer catches an increase
IN freight rates in the shape of an
accumulation of increases. What the
American people are really confront
private control March / IS first, the
danger of still higher cost Of living
ana. second. the danger Of furthC CIR
labor troubles and greater economic
unrest The consumer is bound TO
catch the increase because he is at
the mercy of the manufacturer the
Wholesaler. the retailer, and general
ly the commission man, as to each
single material which enters into z
hnlshed article and then as to the ar
ticle itself.
Director General Hines stated last
June that the ratio was five-fold.
In other words. he said that if rates
were increased 100000 900 the con-
suner would pay to the extent of
$500. 100000. An increase of SS75.-
100000 in freight rates would mean
S4.375. 100000 the consumer would
pay. This would have the immediate
effect of increasing the living cost
of families of five by something like
S21o per annuT.
Another Phase Discussed,
That fact alone is troublesome and
bodes i'll enough. but with the return
of the railroads to private control the
government releases the only peg it
has for holding in place at least one
end of the so-called vicious triangle,
viz.-the three principal elements in
the cost of manufactured articles
labor, raw material and transporta-
ton. Possibly in six months. surely
within twelve months, the railroads
would come back to the, Interstate
Commerce Commission with just as
good case as they will make on
March for another increase in
freight rates. Where would it all end?
With finances of the world topsy-
turvy. with everything in the fiux.
who could call halt?"
why should this be necessary when
a St a
months ago that an increase in
freight rates at this time would not
be in the public interest, and the di-
rector general has said repeatedly in
the past few weeks that no increase
will be necessary if the roads are re-
spite of the fact that the coal strike
and the steel strike caused the roads
to fail to earn the standard return by
about $55, 100000 in the month of No
vember, and that another falling short
of the standard return, though of smaller
proportions. is to be expected for De-
cember. With an operating ratio of
S4 per cent under federal control due
to economics under unified operation,
this desirable result is obtainable."
Sees "Coxt-PIus' Result.
'In my humble opinion the posi-
tive guarante of income of railroads
provided for in the Cummins bill
WOuiu III eject De lne biggest COST
plus contract in the history of the
world. 1t mears that the Interstate
Commerce Commission would pre-
scribe the way the books of the car
rierc shall be kept, but that the adj
function of collecting
and eXpending revenues would be left
to the executives of the carriers them
selves.
The transportation board is to GER
tify to the Interstate Commerce Com
mission what is made necessary as a
result. Wherever the income falls
short of the guarantee the Interstate
Comm cree Commission is to see that
rates are SO increased as to make this
up, thereby becoming a rubber stamp.
In other words. the railroads. rec
ogniZed as a private industry for rev.
enue purposes, but as a public utility
for service purposes, are never to be
allowed to take any chances. The con-
tinuing mounting of the mounting
spiral is to be made mandatory"