The silver state. [volume] (Winnemucca, Nev.) 1909-1925, 1921-12-24
A BATTLE ON RATES
is IMPENDING

Just as certain as time is taken
to make this comment, just that
certain is a freight rate battle inn
pending in the United States. The
present proposed reductions of
transcontinental railroad rates, all
the way from 20 to go per cent,
and an echo from which was heard
at the recent Reno rate hearing, is
dictated by the absolute necessity
that railroads get enough traffic to
employ their plants. Unrestricted
water competition through the Pan
anna canal, with a surplus of vessels
lying in all of the harbors of the
United States, has its full effect,
and railroads have to fight for traf-
fic at this juncture in order to keep
their immense plants employed. As
measured by the number of idle
cars, this plant is working to only
rs per cent of its capacity, and that
70 per cent has to bear overhead
expense and interest on the entire
100 per cent investment. At all
costs the railroads must figure to
load and employ the $4,000 cars
idle six weeks ago.
When it comes to passenger train
equipment the idle investment is
far greater. People have almost
ceased to travel as was their wont
a couple of years ago and there is
no immediate prospect of this move
ment of humanity being revived at
an early date. 1t is doubtful if
the passenger traffic today is so
per cent of the amount handled two
years ago. People are outstanding
their resources and now move about
only when they have to; not in re-
Spouse to the desire for recreation.
To go back to the subject of
freight business, whether the rail-
roads would obtain adequate rev.
enue at the rates asked for to pay
interest upon the investment and
repair and improve badly rundown
property, can only be proved by
experience. With the eight months
ending in August, with a decrease
in revenue on every class of traffic,
they contrived to increase their net
operating income from less than
nothing in the same period in 1920
to &c per cent, but this was accom-
plished by decreasing not on cost of
transportation but on that of main
tenance of way, and equipment,
26.8 and 1872 per cent respectively,
at a time when it was notorious that
expenditure should have been large
ly increased in order to make good
the deterioration Of long period of
years. Last August gross operating
revenues decreased nine per cent as
compared with a decrease of AZ per
cent in August, 1920.
When the roads get enough traffic
to load all their cars they will, if
present conditions continue, find
275,000 of them in bad order and
will probably find, too, that their
trains are in no condition for speed
ing up of movement. Unless costs
of transportation be further re-
duced, they viii then be driven to
desperate expedients to get their
lines in condition to carry the traf-
fic that they will have stimulated by
reducing rates. If they should fail
to recover much of the traffic that
has been captured by water lines
they will have reduced gross rev.
enues without materially reducing
expenses.
The new rates cannot become eff
fective without the concurrence of
eastern connecting lines and the
consent of the interstate commerce
commission, yet with these forth
coming there still remains the
things to be done IN rehabilitating
roadbeds and equipment if rail COM
petition is to be effective in the fight
against ocean carriers.
In the meantime Reno business
minds are much agitated, and cor
rectly so, over the prospect of tide
water rates being placed in effect
that will combine with exorbitant
rates on rail shipments into this
state to seriously interfere with
trade transaction in Nevada.
The one thing patent to the OBJ
serving mind is that the railroad
executives are preparing a titantic
fight for the very right to exist,
as the elimination of the events of
the last five years. and the country
is shortly to see one of the greatest
commercial conflicts of all times.
With billions invested in ships,
now idle, and other billions invested