The New York herald., 1921-05-11
COST OF RAILROAD
OPERATION ARGUED
Senate Committee to Find
Out How $4,000. 100000
Revenue Was Used.
ALL SIDES TO GET SAY
Cummins Asks Cooperation
of Officials to Reduce OPP
Grating Expenses.
DEFLATION is BLAMED
Witness Says That Labor Costs
and Depreciation Are Big
Factors in Situation.
ALL SIDES TO GET SAY
DEFLATION is BLAMED
Special Despatch to THE NEW YoRK HERALD.
New York Herald Bureau.
Washington, ID. O., Nav 10.

New York herald bureau.
Washington. ID. g., MAY f0
The Senate Committee on Interstate
Commerce began its investigation into
costs of railroad operation to-day
Those present included railroad execu-
tives, transportation experts. repre-
sentaIives of railroad labor, State rail-
road commissioners. shippers. bond
holders and the travelling public.
Senator Cummins Qowa). chairman.
announced that officials of the rail
roads are to present their views first
10 be followed by labor representa-
sives. who have challenged the meth
rds of operation of the roads, with
1osts of other witnesses affected BY
the transportation situation 1t is gen
orally believed the inquiry will CON
tinue well into the summer.
julius Kruttschnitt, chairman Of the
board of the Southern Pacific Railroad,
was the only witness heard to-day and
his testimony was not ended Senator
Cummins gave notice that at the close
of Mr.. kruttschnitts testimony and be-
fore other witnesses are presented by
A. Z. Thom, general counsel for the
railroad executives who is directing
their side of the inquiry, cross-exami-
nation will follow
We intend to ascertain just how the
railroads have used the $4,000. 900 600
operating revenues from last year"
Senator Cummins said in opening the
hearing, "and whether this vast sum
was wisely and economically spent
Many of this committee believe operat-
ing expenses must be reduced and we
wish the cooperation OF the railroad Of
tcials in this inquiry to be able to ac-
complish that result"
Expressing his entire Willingness to
meet this spirit half way, Mr.. Krutt-
schnitt announced his belief that gem
eral defation and fall in prices pyra-
mided by the war; and not high freight
rates, are responsible for business de-
preston. propaganda TO the contrary
Notwithstanding" Added to this he said
increased labor costs must be taken
prominently into consideration in de-
termining the increased cost of operat-
ing the roads.
the effort of the railroads 70 recover
from alleged depreciation OF their prop
erty during the twenty-six months of
Government operation. He said the
roads are preparing volumes Of evil
dence in support Of the claims they are
10 present against the Government and
estimated there would "be a stack
IS1werty-dve feet high
The Government having strangled the
railroads into something like bank
Tuptcy," Mr.. kruttschnitt said, "at last
removed Its hands and made sudden rate
increases that should have been gradual.
They should have started twelve years
ago. The difficulties with the railroads
are excessive operating expenses and an
abnormal amount OF these expenses is
cost of labor"
Remedies that he said could be easily
applied were summarized thus:
Give the railroads the right to oper-
ate their property unrestricted.
stop the use of highways for COM
mon carrier purposes with adequate
tolls and proper regulation
Make inland waterways competing
with railroads pay their own costs.
Keep the Government out Of rail-
road operation in competition with rail-
roads
Tolls for the use OF the Panama
Canal ehould be sufficient TO pay interest
on it's cost, operating expenses and main
tenance.
do not deprive transcontinental car
yiers of coast TO coast traffic by inflex-
ibly enforcing strict long and short
haul clause
"It Is not a question of OF revenues
and reasonable returns" Mr.. Kruttsch.
nitt continued "as much as one Of life
and death to every industry. Poor
pervice. no matter how low the rate, is
expense. and increases the cost Of every.
fningN