The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1920-03-27
THAT "FAIR RETURN"

! The interstate commerce commits
sion in fixing rates which will insure
a fair return to the railroads ap-
parently will be compelled to take into
consideration an increase in the cost
of fuel as well as the ever increasing
wages of railroad employees. The
commission has begun a hearing for
the purpose of obtaining the views of
all interested parties as to its proce-
dure in bringing railroad rates up TO a
level calculated to produce the fair re-
turn which the new law promises. On
the same day on which this hearing
began there was also held in Wash
! ington the second meeting of the con-
ference committees representing the
railroads and the organizations of
their employees that have transferred
their demands for more than a billion
dollars additional increase in wages
from the railroad administration to the
companies. Also, during the week be-
fore the hearing, the president had re-
ceived the majority and minority re-
ports of the coal commission recon-
mending further increases in the
wages of coal miners which will in
evitably result in a higher price for
the fuel which represents large part
of the railroads expenses.
The interstate commerce commits
sion is already confronted with a wage
scale that has been increased during
the period of government control
about twice as much as freight rates
have been advanced and all of the nu
merous wage orders of the railroad
administration that have been made
effective since it's first order, that was
made retroactive to January 1, 1918,
are not yet. reflected in the rate level.
The railroad companies are guaran-
teed for six months the same net oper-
ating income that prevailed in the
three years ending June 80, 1917, and
the employees, by the same law, are
guaranteed for the same six months
period the rates OF pay which they
had been allowed up to February %,
1920.
In the latter part of 1917 and the
early part of 1918 the eastern rail-
roads got a IS per cent increase, and
the southern and western roads a
much smaller one. to meet the ad-
vances in wages which resulted largely
from the passage of the Adamson
eight hour law which went into eff
feet on January I, 1917. The rate in
creases were also intended to take care
of some other increases in expenses.
notably in fuel. On May 25, 1918,
Director General McAdoo issued his
e.
January l, and also his order which
was intended to advance the rates suf-
ficiently to meet both the increase in
wages and the advances in other items
of operating costs which had accrued
while the interstate commerce COM
mission was considering the 10 per
cent case. The rate order, however,
was not made effective until June and
while the wage order was later found
insufficient to satisfy the employees
and supplemental orders continued to
be made up to the end of federal con-
troll the railroad administration con-
tinued to be optimistic for the future
and refrained from raising rates.
THE result was" says the Railway
Age. that while the government dur
ing its operation of the railroads in
creased freight rates about % per cent,
it increased wages about Sc per cent
and the resulting deficit was passed
on to the Taxpayers. Director Cen
eral Hines has preferred to explain
his deficit by saying that the first
rate case was not made soon enough.
and that the failure to make a second
increase was a matter of policy. altho
the increase in the deficit during 1919
as compared with 1918 demonstrates
that the first increase was not made
sufficiently high when it was made"
The fact therefore remains that
wages have continued to increase
thruout 1918 and 1919 while the rates
have not been changed since June,
1918, and yet the demand for new in
creases in wages has already got a
start on the rate case.