New-York tribune., 1921-05-24
Rail Earnings
Held Too Low
For 20 Years
Development of Carriers
Retarded, Say Smith and
Elliott in Plea for Public
and Federal Cooperation
neutrality-suspicious.
Contented Workers, Stock
holders and Investors
Called Remedy for fils
From The rribnns,a Washinaton Hure.ra

WASHINGTON, May 2S.--Two ap-
psals for cooperation by the govern
naent and the public in the struggle
of the railroads to meet the problems
Of transportation, financing and costs
were heard to-day by the Senate Com
mittee on Interstate Commerce. They
were delivered by A. II. Smith, presi-
dent of the New York Central, and
Howard Elliott, chairman of the board
Of the Northern Pacific.
"For twenty years" said MIR. Smith,
in completing the statement he began
last week before this committee, 1.-The
roads have not had enough income to
meet the demands Of their develop
ment We ought to be getting ready
for the return of prosperity"
Defense of the transportation act
and plea that Congress. the public,
the railroads anu ioDor organizations
cooperate to help in its administration
were features of Mr.. Elliotts state
rnent He said the transportation act
was intended to apply TO something
like normal conditions and was not in
tended as a "cure-alp' for world
wide depression of unexpected severity
Calls Object Protective
"The act did not undertake to create
commerce." Mr.. Elliott said Its OBJ
iect was to insure to the public ade-
quate means of transportation and, to
this end, to secure the safety of Sc
curities of sound railroads; to protect
= L.
and to encourage its development to
meet the needs of the country; to regu-
late the transportation of commerce by
railroads in such q way that those en-
gagged in that business, either owners
or employees, should, if possible, have
q fair return for services rendered to
the public.
"One provision of the act provides
that until March, 1925. The rates shall
be such that, as nearly as may be,
there will be 81 return Of 5 II or 6 per
cent on the fair valuation OF the rail
roads, but the act did not and could
not insure the business necessary to
earn such returns"
Mr.. Elliott said this was not a guar
anty, as alleged, but merely "a decla-
ration Of principle that under reason
able business conditions railroad prop
3
return" with rates fixed IN order to
accomplish that.
''If the policy of extreme regulation
Of the railroads by the government is
TO continue said Mr.. Elliott, "as
against the policy of greater freedom
for private initiative and management,
then this particular provision of the
aco is OF great Importance.
Executives Eager to Cooperate
q know that it is the earnest desire
or the officers OF the railroads to CO.
operate to the best of their ability,
both individually and collectively, with
the Interstate Commerce Commission
and the Labor Board, to obtain the re-
suits intended when the act became a
law.
''The arrangements of the roads are
all the time hard at work on the home
read and through various associations
OF executives, operating and traffic Off
GERS, working together and with the
commission and Railroad Labor Board
TO improve results and obtain, to as
g1eat degree as practicable, FOR all roads
what the law calls for-'honest, eff
Gent and economical operation Much
has been cone along this line in the
rast ten years, and further economies
viii be obtained slowly because capital
Is needed for labor saving devices, and
men must be trained to use them, but
there is no lack of interest or effort
20 obtain better results each month and
each year.
"A railroad is complicated and del
lcateiy adjusted manufacturing plant
and it's product is transportation, man
ufactured daily and in countless forms
and under widely varying conditions
Its product, however, must be used as
produced-it cannot be stored Up for
the future.
"Other people are manufacturing
other commodities. Generally, they car
raise their prices in prosperous times
aad can store their products in poor
times for future delivery, or close theil
plants entirely. The railroad has not
been allowed to raise its prices to the
extent that the manufacturers and pro
ducers have, it has nothing accumulat.
ed from the large business of the last
few years TO care for the present pc.
riod, and it cannot close down its
plant.
Biames Restrictions
sit is self-evident that the railroad
manufacturing transportation, cannot
ON falling business, long continue tc
be solvent enterprise if it cannot, as
other manufacturers do, have some
control of its income and outgo, ane
pay wages substantially on the same
basis as may be paid by other EN-
ployers in similar territory. This i;
not the case to-day, and the inabilit,
Of the railroad to adjust promptly its
costs to meet depressed business condi
ttons is the chief cause Of the presen
situation"
The Northern Pacific in the pas
twenty years, Mr. Elliott testified ha.
spent $430,000,000 for additions, i'm
proyements, betterments and exten
sions. The company has 779 locomo
tives, he said, of which 613 are already
equipped with superheaters and install
iations are being made in the rest
Brick arches have been placed in loco
motives where possible. Company Of
tlclais, he said, are working on many
other improvements TO increase eff.
cheney and economy and studies are
o4g4a H..