Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1921-05-10
KRUTTSCHlVI'l|'| I
IS WITNESS IN
R. R. INQUIRY
Excessive Operating Ex-
pense Big Trouble, He
Declares.
Gives Five Remedies For
Cutting Down Expense
Considerably.

Washington, May 10.-rhe trouble
with the railroads is excessive operat-
ing expenses, IAN abnormal amount"
OF which is the cost Of labor, Julius
kruttschnitt. chairman of the board
OF the Southern Pacific railroad. de-
clared today before the senate inter-
state commerce committee, who was
the first witness at the opening Of the
congressional investigation into the
whole transportation situation.
Mr.. kruttschnitt suggested five
remedies which he said were "easily
applied and productive Of great
economies" They ares
Stop the use OF common carrier
purposes of highways built with pub
lie moneys. without adequate tolls and
proper regulations.
Make inland waterways built or
improved at public expense, carry
themselves as to interest on cost and
maintenance by regulating the com
mon carrier traffic on them and by
imposing regulation the common car
rler traffic on them and by imposing
adequate tolls.
Keep the United States govern
ment out of the business of operating
steamships and stop the lavish ex-
penditure of public money to provide
coast to coast ocean transportation in
competition with transcontinental
! railroads.
Tolls for use of the Panama canal
should be sufficient to pay interest on
its cost, operating expenses and main
tenance.
DO not deprive transcontinental
carriers of coast to coast traffic by
inf1exibly enforcing strict long and
short haul clause"
| Mr.. Kruttschnitt read prepared
statement which opened with the as
| responsible for business depression.
1 widespread propaganda is being
carried on to arouse public sentiment
against present freight rates" The
fact is that ever since the rates have
been advanced the cost; of transport
! ing commodities is far less than the
toll. taken by the commission mer-
chant and the pelailcs. :. .---4-s-----s
| The wi..;ess told the COMMITTEES
that the general defation and;the fall
OF prices had caused sta agnation Of
| business.
i 1.-The trouble with our railroads has
been intensified by the results of &c
months Of an experiment in govern
ment ownership and operation. The
word ownership is used adyisedly as
the federal railroad administration
rated the railways as they were abso-
lutely owned by the government and
turned them back to their owners
/ helpless. bound in improvident agree
mcnts in the making OF which their
owners had no voice."
Taking up labor costs. Mr.. krutt-
/ schnitt said the increase of this cost
in 1920 over 1919 was sS73.8l4.65:
and that if the increased scale which
became effective retroactively last
May had been in force during the
whole year of 1920 the wage bill for
! that year would have been approx
| mately $3.50, 100000 or $e,e40.517,-
| 85S more than it was in 1917. the last
year of private operation before the
war.
! The government having strangled
the railroads into something like
bankruptcy" he concluded, lat last
removed it's hands and permitted
! sudden increase in rates that should
have been gradual and started at least
twelve years ago. We should bear in
/ dents epigram more business in gov
! ernment and less government in busi-
! ness
Take Adjour .rncnt.
(! Mr.. Kruttschnitt had not conc:uded
his prepared statement wnSn the
committee adjourned until tomorrow.
I In opening the session. Chairman
ICummins read a summary of railway
earnings since 1918. showing larger
revenues each year. but operating ex-
renditures rising al an even sw;,ter
rate. The tendency eliminated. he
said. when in the year endeu March
II. 1921. the roads received !t.1:j-
e62.000 for transportation services
and spent s5.2S4.3Ss.510 in operating
expenses. After deducting taxation
nd raptol ha Senntor
said. the carriers had MT return
from investment of only $2,Oo0.te0
Il think it is apparent that revenue
can never be increased from higher
rates" Senator Cummins sail III we
cannot raise the railway revenues. the
problem before us is that OF asrer-
tanning whether these railway rev.
enues are efficiently and properly cx-
pended. The gravity of Lha situation
before the American Lcppie is plain
if the transportation Industry III our
contry has become permanently IN
improbable business"
/ The chairman said he prasen;ed his
statistics for the year ended March
] because that was the first year of
private operation after government
control.
j That's scarcely true" >,id Senator
Kellogg. Republican, Minnesota For
) the first six months of that ye.ii, tail-
way operating g-expenses were iisei by
statute. That isn't private 4cuntroi,.
The committee discussed IT'S policy
toward witnesses, and 5Seaa,lr Town
send. Republican of Michigan, de-
n.lnded that "all witnesses hcr,, he
sworn, we've heard too many ccntla-
dictions." Chairman Cummins re-
. marked that applying the oath 10 Wit
nesses was not the usual custom, hut
Mr.. kruttschnitt was sworn.
r Detroit Forest fires were reported
sweeping large areas in half q dozen
Michigan counties. n IKE