Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1921-07-30

for supplies, already purchased, ac
cording to my estimate, about $225,
000, 200. They haven't the money to
pay this. 1t is impossible for them to
accumulate from their operating reve-
nues anything like this sum.
"If. however, the Government pays
| them what is due them II will enable
them in a year or six months, perhaps,
/ 10 pay their debts and re employ thous-
ands Of men who have been laid off as
result Of depression in business and
| conditions which have been forced upon
them.
There are large numbers Of cars in
bad condition. | may say that this
also applies to locomotives and other
equipment. All these should now be in
process Of repair so as TO be in read-
ness when the anticipated revival Of
the transportation business sets in .
Which. need not add" continued
Senator Cummins, 1--WE all hope will be
not long delayed.
ut would also, and this is equally
important he continued, "cnable the
railroads to put to work at least 200,
600 men who have been laid off since
January last, which in itself would be
large factor in revival of business"
There has been a vast amount of sur.
mise and criticism over the accepted fact
that while the transportation act guar
anteed the railroads per cent during
the first six months of private operation,
following their return to their owners,
they have not earned anything like this
amount In fact there has been largely
a deficit.
Rate Increases Granted
The conditions were that under this
act the Interstate Commerce Commits
sion was directed to 80 adjust rates that
they would enable the roads to earn 51h
per cent on their valuation.
In conformity with this the Commits
sion last August granted an increase OF
about 80 per cent in rates. The un-
fcrseen intcrvened in the way of n gen
eral depression in business and trans
portation. In addition there was
greatly increased cost OF operation as
the result of increased wages granted
employees by the Railroad Labor Boards
decision All of this wns wholly unfore-
seen, and has brought about condition
whereby il was impossible for the roads
to earn anything like the 512 per cent
specified.
In response to my inquiry as to his
Nlt"S vi lut ldllAOuu lubOl blLuullOu
Senator Cummins said:
II have nothing to say on that sub
ject at present. We must recognize,
however. that wages must come into
harmony with all other things. 1t is
question Of what wages have to buy
and the cost of these necessities.
The cost of production of anything
must not exceed the price which these
things will bring, their cost to the con-
sumer. Wages must huctuate within
reason.
Limits 10 Wages
II am in favor OF high wages" said
the Senator. but still there are limits
which cannot be exceeded in point of
economic necessity
II is we'll, in connection with Senator
Cummins' lucid explanation of existing
conditions in the railroad world. to re-
call what may be regarded as the crux
OF President Harding's plan as ex-
pressed in his special message to Con -
gress this week.
You are asked" he wrote, "to ex-
tend the authority Of the War Finance
Corporation SO that it may purchase
those railway funding securities ac-
cepted by the Director General of Rail-
roads.
mo added expense, no added invest
ment Is required on the part of the
Government. There is no added liabil-
ity, no added tax burden. 1t Is merely
the grant Of authority necessary to
enable most useful and efficient Gov
ernmcnt agency to use its available
funds to purchase securities for which
Congress has authorized the issue and
turn them into the channels of finance
ready to float them"
There the matter rests for the
present.