New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-07-26
Lower Railroad Rates

The American Farm Labor Fed
-, Grafton, which claims to represent
:. a million and a quarter American
farmers, in its appeal for lowering
1.of railroad rates makes but one
- definite suggestion.
y 1t asks for the repeal of Section
!. 15-A of the new railroad act. This
provides that when rates are fxed
u the railroads shall be allowed, above
and taxes, " per cent on
their present value. The fedora
tion thinks this too generous, but
.ssd does not recommend a substitute
What would it have?
= Nor does it note that the recent
0 railway income has not Melted 5m
per cent on value-hovers around
= per cent. The Interstate Commerce
has not met the obliga-
), tion which rests on it, and hence
present criticism of the section is
academic. The section now is as if
it were not.
Nor does the federation note how
=, carefully the commission has kept
: away from railway valuations. It
o has collected some figures, but it has
e avoided any definite total. What
i@ are the railroads worth? On the basis
fnlof the present value of their securi-
ties, something less than $20,000,-
q 600, 900; on the basis of cash cost,
probably $4,000, 100000; on the
basis of replacement, probably
Z $40, 900, 100000; with reasonable
allowances for increment, such as
5 Farmers have gained on their land,
probably $35,o00,o0O,O0O But
= these are all mere estimates. There
has been no formal entertainment
gsof value, and most of the investiga-
stion which has been made is already
!. archaic.
- But taking the estimate of S2O,-
1000, 100000 as the least the courts
you'd consider non-confscatory,
and assuming that the courts would
,srequire an allotment Of at least Az
per cent on this, little figuring
> shows how little would be avail
able for rate reduction should l
per cent be taken from the present
IT theoretical allowance of 51s per
cent. The sum coming to the rail-
niroad owners would be lessened
only $780, 100000 year. If this
: entire amount went to shippers the
resultant reduction would be but
3 microscopic.
The federation ignores the con-
vtlition, as do SO many others, that
= the share of railroad incomes now
reaching owners is small. Were
there now proper maintenance ex-
uspenditures the expense of railroad
operation and taxes would be close
aAto 95 per cent of gross income,
against go to 70 per cent a few
years ago. No longer is it pos
sible to extract any considerable
'a'fat from railroad owners. They
lo4have been reduced to leanness. If
:. rates are to be lowered, EXCEPT as
to commodities, where a lowered
rate means more net revenue, then
Wit must be by lessening the cost of
!. railway supplies and labor, or by
= improving the railway plant. Why is
2 the federation unwilling to point
e out these facts to it's membership?
~ Not only is the federation per-
- : sssuaded, apparently, that the railroad
I owners who get now SO little get
too much, but it regards it as an
economic absurdity to single out
e the railroads and give them a
Dosguaranty. Of course. Yet its
re- aversion to government interfer-
. ence disappears as it asks the gov
!, ernment to fix lower rates! It Is
rather late to find fault with sim
4 ghng out the railroads. The prac-
:. = s1ice began many years ago, and it
never has been said that the rail
!. : roads asked for it.
~ Not by reviving the doctrine that
9 the railroads are rich and their
owners can be safely and Justly
~@piucked is the difficult railroad prob
Is lem to be solved. The interests of
farmers and railroads are mutual
not antagonistic. The war cries on
which generation of demagogical
politicians did business are out of
date. Taking, The last twenty years
as whole, those who have put |
ssnoney into. land have done better
than those who have invested in |
railroads.
Yet We discover an organization
which would be accepted as intelli-
gent and fair seriously saying that
because agricultural prices went up
from 100 to $50 per cent, while rates