New-York tribune., 1920-08-03
Haste in Adopting New
Schedules to End Drain
on Treasury Before US.
Guaranty Ends, Sept. l
Taxes to Pay Third
OF Wage Increase
Railroad Labor Expert
Sees No Cause for Price
Raise, Except ON Coal

WASHINGTON, Aug. (By The As
sociated Presso.-The new passenger
fares probably will become effective
on August 20 and the advanced freight
rates on August 25, according to a pro-
gram outlined tonight by Alfred r.
Thom, general counsel for the Associ-
alton of Railroad Executives.
Simultane neously with the effective
ness of passenger fares, the increased
charges for Pullman travel and the
new rates nexccss baggage and milk
also will be put in force.
Cost Reason for Haste
One reason for the haste to put the
rates into effect is the realization by
government officials that by the end Of
the year government control will have
cost the country a billion and half
dollars.
Railroad rate experts have begun the
preparation of blanket rate schedules
increasing the transportation costs on
percentage basis. These will be pre-
sented to the Interstate Commerce
Commission five days prior to the pro
posed effective dates. The rate sheets
will be supplemented by printed tariffs
containing rates for all territories and
on all commodities as soon as the phys
ical task of working out the multitude
nous details can be accomplished.
Local Officials to Compute Rates
Until this work is DONE local rail
officials will compute the new rates and
charges for their respective territories
on the basis of the existing rates, plus
the percentage increase authorized by
the commission.
While this method Of putting new
rates into effect would be unusual,
tion OF the commission that the higher
charges be put in force cat as early a
date as practicable"
By putting the increased rates into
effect prior to September | the drain
on the Treasury under the guarantee
provisions of the transportation act
likely will be ended before expiration
Of the governments guarantee Of earn
ings to the roads. Officials estimated
to-day that by Sente mber the guaran-
tee provision would have cost the gov
ernment approx mately $3.50, 100000 for
the six months since the passage of the
present railroad law.
Increased Wages in Taxes
The government has been obliged to
continue the S75 ,OOO,0 600 monthly rental
payment which was in effect during
Federal control, as we'll as to meet def
cts, not covered by the rental amount
sustained by the individual carriers
Included in the charges which will fall
on the Treasury in these deficits is tn t
portion Of the sGOOOOO,OoO wage award
covering labor costs from May to
September I, when the guarantee eX-
pires This was officially estimated q
$206, 100000. Thus the American people
viii pay one-thrd of the incrca sed
wages for railroad employees this year
in taxes.
With the amount guaranteed the car
riers this year and the claims of the
lines for compensation under their CON
tracts with the railroad adminstra-
tion. the roads Will have cost the gov
ernmcnt approximately billion and
a half dollars since the President took
over the properties December IS, 1917.
Return of $3.50, 100000
Operation Of the roads after Septem-
ber |. under the new rates, will yield.
according to accountants and tariff
experts of the carriers, an annual re-
turn Of about $3.50, 900 900 While
these figures were of preliminary
sort the railroad experts believed the
freight revenues to be derived under
the new charge would amount to
81 300, 900 900, and the income from pas
senger traffic $3.50 900 600. Thei. esti-
mates, it was explained. were based
on the assumption that intrastate rates
would be increased correspondence with
the advance authorized by the Federal
commission in interstate rates.
The need for increases in intras sta te
rates was set forth in d report 1or-
warded to-day to various state railway
aud public utility commissions by tie
three state commissioners who sat with
the interstate Commerce Commission
during lis hearings and consideration
of the rate case.
States Urged to Act
Reasons requiring an increase OF
interstate rates are very persuasive
of the need for increase in intrastate
rates. declares the report
"When all matters are considercd,'