The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1921-08-07

have been slowly declining since last
December, but the average cost to
the railways in May, the latest month
for which figures are available, was
| s429, or almost LA per cent more
| than in 1916.
I'm the first five months of 1920 the
| total earnings of the railways were
| SIS IL per cen more than in the same
months of 1916. The total operating
expenses, in spite of the vast retrench-
ments made, We're 100 per cent more
than for the sarae months of 1915.
Taxes were 80 IL per cent more. Re-
suit: In the first five months of 1916
the railways earned s286. 100000 net
operating income, while in the same
months of 1921 they earned only s117,-
100000 net operating income, de-
cline in net operating income for these
months of over Sc per cent.
None of the arguments setting
forth why rates should be reduced
makes any reference to the fact that
while rates are now high compared
with the general level of prices, rail-
way rates for some years did not in
crease while the general level of
prices was advancing. and that the
producers and shippers profited mean
time by the fact that prices were ad-
yancing while railway rates We're not.
1.-THE average railway freight rate
was the same in 1917 as in 1913. Mean
time the average wholesale prices of
commodities had advanced 76 per
cent. In 1920 the average railway
freight rate was 46 per cent higher
than in 1913, while the average whole
sale prices of commodities We're l43
per cent higher than in 1913. AS re-
Gently as January, 1921, average whole
sale prices of commodities were II per
cent higher than in 1913, Only since
then have freight rates been reIa-
lively lower as compared with 1918
than wholesale prices. In other words,
during the entire six years from 1915
to 1920 inclusive, average wholesale
prices were from 1 to lab per cent
higher than in 1913. while railway
rates during this tima were never
niCre than 46 per cent higher than in
1913 and yet now when for less than
six months railway rates have been
relatively higher as compared with
1915 than wholesale prices we have a
loud and general demand for reduc-
lions in rates on the general ground
that producers and Shippers cannot
stsnd' the present rates.
When between 1913 and 1917 railway
rates were standing still and average
wholesale prices were advancing IS
per cent, sopkesmen for the railways
constantly were saying that with
wages and prices of all kinds advanc-
ing, the railways could not stand the
then existing rates and were entitled
to advances in them, both because The
cost of railway operation was rapidly
increasing and because the increasing
prices of commodities would enable the
traffic to stand higher rates. But the |
rates were not advanced.
Upon what principle Of consistency, !
equity or sound business can those |
who opposed advances in rates when I
their own prices were advancing and |
the traffic could stand them, now de- |
mand reductions in rates because
prices recently have declined and they |
need reductions in rates which the
railways cannot stand? They profited |
for six years by keeping railway
rates down while their own prices were
advancing. Is it any more than fair
that railway rates should in turn re-
main for a while relatively higher than
prices, when the wages and the prices
the railways themselves have to pay
are still relatively so much higher
than the railway rates? Undoubtedly
the rases should be reduced--but not
until operating expenses have been re-
duced and the railways can make a
reasonable return on lower rates.
1--WE can draw only one of two con-
illusions from the widespread propa-
ganda which is being carried on for
larg general reductions in rates. One
is that those who are carrying it on
are extremely ignorant of present
railway conditions, which reflects no
credit on any man who sets himself
up as qualified to discuss railway
rates. The ether is that those who are
carrying on this propaganda would
willingly bring about premature and
reductions in rates which
would wreck the railroads of the Uni
fed States fipapciaI1xy ond ,,t,1ys;o ~ 1I1- ,