New-York tribune., 1921-03-14
January Income of Many
Lines Less Than Operat-
ing Costs; Returns for
February Show Deficit
Traffic Dwindles
As Rates Hit Peak
Legislation to Enforce
Rigid Economy and Re-
form in Buying Planned
From The Tribune's wash,noto> Bureau

WASHINGTON. March 13.-Failure
OF many railroads to earn operating
expenses in January, and a deficit in
tho returns of the roads as a whole as
compared with their operating ex-
penses, will be shown when the figures
for the first month of 1921 are pub
llshed, according to information which
has como to members of the Senate
Interstate Commerce Committee. Fur
thermore, the February financial
showing Of the lines will be unsatis-
factory.
1t is said the reports of the roads
thus far received by the Interstate
Commerce Commission and the agen-
cies Of the railroads which are keeping
close track Of data show that the ex-
penses are running slightly ahead OF
income.
The financial situation in which the
roads find themselves plus the diff
culties they are having in their efforts
10 reduce the wages of employees are
combining to force the transportation
question to the front as one Of the
most important matters ahead of the
Administration and the new Congress-.
President Harding and Secretary Of
Labor Davis are leaving the contro-
versy over wages to the Railway Labor
Board, but it will be Impossible for
Congress when it meets in extra ses-
sion to ignore large phases of the
whole problem.
High Rates Reduce Traffic
From all over the country complaints
keep pouring in on Congress that
freight and passenger rates are too
nlgh. Reliable information here is to
the effect that the high passenger
tariffs are tending to drive away traf-
lic The same is true of freight rates
State railroad commissions and or
carnations of shippers are extremely
active in mapping out plans to have
the transportation act revised. They
want law passed which will make il
clear that the Interstate Commerce
COMMISSION has no authority OVER
rates within state borders. and. fur
thermore, want the so-celled guaranty
, templates that the rates in the aggre-
gate shall yield o}x per cent return
repealed. 1t is true. s they admit, that
the roads are not actually getting such
return, but it is contended the rates
nave been forced 10 excessive heights
by reason Of this guaranty, and chat
the roads have been hurt rather than
helped by the high charges, while bust
ness and agriculture have suffered.
The proposed investigation into the
finances and operations of the roads by
the Senate Interstate Commerce Com
mlttee, with, perhaps, similar inquiry
by the House Interstate Commerce
Committee, has aroused wide interest
Not only are the railroad executives
preparing to try to absolve tkem selves
from blame for conditions. but the
labor leaders are getting ready to at
tack the methods of financing and
operation and to charge inetficiency
and wastefulncss Shippers organiza-
tions, too, will insist that ways must
be found TO lower freight rates and to
cut expenses of operation by all prac-
ticablc means.
Congress to Order Economy
The opinion prevails in the best in
formed quarters in Congress among
Senators and House members, who are
keenly alive to the situation. that
wages will be reduced and that
Congress will insist on cuts in operat.
ing expenses in other directions. large
( ~ by different methods in buying sup
plies and material. Chairman Cummins
OF the Senate interstate Commerce
Committee holds that the roads must
buy in common, and thus remove the
| element of competition, or else pur-
chases must be made a matter of gov
crnment regulation. At the same time
he declares, the utmost possible use of
| facilities in common among the roads
must be made
This idea has strong support ir
Congress. 1t is likely to be subject
of Legislation in the extra session and
especially SO if the railroads continue
to make poor tinancia! showing while
shippers, livestock men and farmers
cry out against high freight rates.
Advocates of government ownership
OF railroads are coming to the fore
and saying that the conditions are
such as to head the country straight
for that goal Sentiment in Congress
however, is that the present law. with
such notifications IS may be agreed
on, should be thoroughly tested. II
will be tried out and there will be nc
great difficulty in the task If the tinan
cial condition Of the roads improves
and business picks up.
If the roads do not improve in ths
next few months it is hard to foresee
Continued en- page shree)