The Connecticut labor news., 1921-05-27
FATE OF NEW ENGLAND
 RAILROADS IN THE BALANCE
Falling Far Behind An ticipated E a rnin g S Even With Govern ment Aid and Bank ruptcy Is Nigh, Ac- cOrding to Claims of Officials.

The New England railroads are on cle in the New York Tribune. The New York, New Haven X Hartford, in tire first three months of 1921, fail ed to earn expenses and taxes by more than three and half million dollars; the Boston X Maine by about three million dollars, and the Maine Central, the only other import ant independent New England rail- road, by more than one million and a quarter.
 New England industrially m a unit separate and distinct from the rest of the country, and likewise it's railroads are a unit with problems differing ma terially from those of other Eastern railroads Most of the Eastern rail roads have failed to earn per cent on the valuation which the Interstate Commerce Commission has assigned to them, and the New England rail roads are falling far behind even the other Eastern lines.
 It has been proposed that rates within New England and rates to and from points in New England from and to points in trunk line territory should be increased, and that the total increase should go to the New Eng land roads without participation on through rates by the trunk line roads. This the shippers of New England refused to consider
 New England competes industrially with other manufacturing centers. Thus on cotton goods the New Eng land mills compete with the North Carolina cotton mills in the markets at New York, Chicago, Cleveland and Cincinnati An increased freight rate from New England without a cores bonding change in the rate from Southern cotton mills would, the New England manufacturers assert, put them out of the running in competing markets. New England shoe manu- lecturers compete in Chicago, CleVe- land, etc, with the St. Louis shoe manufacturers. Here again an in crease in freight rates from New Eng land, without a corresponding increase from St. Louis, would put the New England shoe manufacturers al a dis advantage with most other manufac- turing centers already in that her coal IS more expensive than that of other manufacturing centers. To add a further disadvantage would be dis astrous to all New England industry, the shippers maintain.
 A second proposal was made by the New England roads through E. J. Pearson, president of the New York, New Haven & Hartford. From the transportation act the Interstate Commission derives authority to fix the division of through rates among different railroads participating in through freight business. The New England roads appealed to the com mission to give them larger divisions of any large proportion of merchant disc bound out of New England. There are some commodities which permit of assembly at Boston, Provi- dence or Worcester or other points for through movement to the Harlem River gateway or the Albany gate way, but in general the collection of the freight is quite closely analogous a large classification yard. Further more, the train generally has to be broken up at the gateway, where 1t leaves New England. The earnings of train per mile are likely to be less and the cost of operation consid- erably more on the New York, New Haven & Hartford than on the New York Central.
 The New England roads base their demand for a larger division of freight rates on the fact that ratio of the cost of handling freight to the revenue derived therefrom is higher on the New England roads than on the Trunk Lines. They claim that they have been actually losing money on through business and having to make up the loss on revenue from in tra-New England business. On To- cal business the New Haven receives cents for carrying a ton one mile, on through business the New Haven receives I I-2 cents. The actual cost to the New Haven on through busi- ness is about ? cents ton mile. It takes I.6 man hours on the New Ha- ven to perform the same part of the necessary work pertaining to moving freight 100 miles that I man hour per forms on the Trunk Lines. Justice de- mands, therefore, that the New Eng land roads, they argue, be given credit for this fact when a division of the through freight rate is fixed
 The New England roads at first asked that they should not only be given a larger proportion of the through rates but that the award should be made retroactive. If this request had been granted they would nave reCelVeQ aDOut 92S,OOO,OOO TOT freight business previously carried al the old divisions of the rate This retroactive feature of the New Eng land roads claim has been held ir abeyance.
 In the mean time another proposal was made before the Interstate Com merce Commission which meets some of the most serious objections to the change in the division of through rates. F. J. Lisman,' of the banking firm of F. J. Licman & Co.,, proposed that the trunk line railroads doing business with the New England rail roads keep an account separately ot their New England freight business At the end of a specified period, ac- cording to the proposal, they should render an account to the New Eng land roads and rebate to them a cer- tain percentage (not more than I2 I-z per cenD of the revenue from this business. The amount to be rebateC would be determined by the difference between what the trunk lines earned during that period on their valuation and what the New England road, earned on their valuation. Thus if the trunk lines net earnings were 3 pei cent on their valuation and the New England roads had a deficit equal tc half of I per cent on their valuation the trunk lines would rebate to the New England roads sufficient to bring their net earnings up to 3 per cent or their valuation.
 This has one important advantage OUer chance in the division of rates