The Birmingham age-herald., 1920-08-02
Railroads Now to Face
 State Srvic Commission
Continued From Page One)

cent, in western states 5 per cent and in pacific states 25 per cent.
 Rate increases granted the railroads by the interstate commerce commis- sion are designed to give the carriers an annual net operating income of $1,- 134, 100000, or $241 900, 900 more than the standard return allowed by the government and based on the average of the three-year period imme dately preceding federal control.
 This sum is s34oo000 more than the roads made in their record year the total of s1.233, 900, 900 net operat- ing income which they sought in pre- senting their applications to the com mission.
 HUGE TASK
 Rate experts of the carriers will set to work tomorrow on the tremendous task of preparing the new tariff schedules which it is planned to file in time for the increased rates freight, passenger and Pullman-to be- come effective September l. On that date the government guarantee stand ard return of SS93, 000 900 annually will expire under a provision of the trans portation act limiting this to six months after the carriers were re- turned to prlVate control.
 Experts of the commission and the carriers also will undertake to figure the actual money return which will accrue to the roads from the rate in- creases granted which are about g per cent on freight rates, 20 per cent on passenger, excess baggage and milk rates and 50 per cent on charges for space in sleeping and parlor cars.
 $1,500, 100000
 The actual increased amount to he received by the roads as result of tlie rate advances has been roughly esti- mated at $1,500, 1000, 900 until the new tariffs are worked out and put into operation and the exact amount Is problematical With the passenger fares increased one-fifth and Pullman charges advanced one-h half passenger travel probably will be reduced.
 Based on the present passenger traf- fife these increases are expected to yield the roads return of s277, 900, 900, all of which was sought to help ab- sorh the wage advance to railroad workers which the railroad labor board has informed the commission will work out at $61S.000.0 900, instead of the SC00, 100000 first estimated The car riers have figured the increase at $625, ,000. 900, but for the purpose of the rate case the commission used the boards figures.
 The estimated net operating income of $1 ,134, ,000,000 which the roads are to receive as a result of the fare raises represents per cent on the aggregate value of the railroad properties, which was placed by the commission at $1S,- 900, 900, ,000 or $1,400. .000,0 900, less than the carriers estimate. Of the total in- come received by the roads half of one per cent of the aggregate value, or S94,000.000 must be set aside an nually for additions and betterments. Thus the actual net operating income going nito the treasury of the carriers would be 0.000, 900. From this must be deducted taxes and other fixed expenses not included in operating ex- penses before the actual net income l is determined. Admittedly, taxes and most other of such fixed expenses have | increased since the pre-war period on which the standard government return lis based.
 RESERVE FUND
 | Should the commissions decision re- l suit in producing more than the pel cent return on the aggregate value al l lowed under the transportation act one half of the excess would. under | the terms of that act, be placed in the reserve funds of the roads and thu other half turned over to the interstate i commerce commission to establish re | yolving fund to be used for makini