The Washington herald., 1921-05-17

DecSu-Dcr Oh, lSUs $3.50, l9O,1DO
Irepruary y, l95l.... 6,lT5,962. Ills
Date Of fiscal year advanced to Decemb.
tLast year Of private opera ton previous
tFirst year Of private operation after 4
For four days of last week julius
Kruttschnitt, chairman of the board
of the Southern Pacific Railway ap-
peared before the Senate Committee
on Interstate Commerce. of which
Senator Cummins is chairman. He
has been presenting the case for the
railroad executives. Broadly speak
ing the explanation of the railroad
executives is that the present plight
of the railroads is not the fault of
the managements nor of the theory
of the present law but is a part of
the wars aftermath. which Is found
in every business and which in all
countries has seriously crippled the
railroads They think the worst of
the crisis has been weathered and
with the full operation of the forces
already in the field under the law
they look for gradual adjustment
and recovery. They believe the pres
ent transportation act should not be
amended at this time but should be
given a fair trial They characterize
dealing with our transportation situ-
alton which has been enacted in the
past hfteen years.
kruttschnitt's Views.
Mr.. Kruttschnitt ably presented
the railroad case, but was at some
disadvantage because the twelve
months under inquiry by the COM
mittee ended Feb. 2S, sz1, exact
ly covering the full year of private
operation. whereas the railroads
built their case upon the results of
the year ending December 81, 1920,
which included two months of gov
eminent operation. Under the broad
Characterization of wars aftermath
he pointed out the specific phases in
which this Generalization presented
itself, such as deranged morale of
working forces, unexpired contracts
with labor in form of national
agreements, and deferred wage in
creases and for material, which un-
completed situations were the over
hang from government operation.
The burden of liquidating this situa-
tion was thrown upon private opera
tlon with inadequate physical facili-
discretionary power. exhausted re-
serves, impaired credit and at a time
Of violent economic readjustments
and general business contraction. To
other business it has been permitted
to accumulate reserves out OF liberal
profits which were denied the rail-
roads during the war and in the
years preceding the war
Extraordinary Increases.
The specific explanation of the ex-
traordinary increases in expenses,
kruttschnitt principally alIocated TO
labor agreements and contract
prices that were the legacy from
government administration. He de-
MED that railroad rates were the
cause of diminished volume Of busi-
ness, pointing to the fact that Ii
quotation began nearly six months
before the rate increase was grant
ed. He quoted Chairman Clark of
the I. c. C. in support of his posi-
tion that freight rates had not
checked business He frankly ac-
knowledged that there might easily
be individual exceptions to this gem
eral fact and that the conditions
under which the rate increase was
granted provided for special revision
in such cases of particular hardship.
He denied ineff1ciency in manage
ment, and specifically set out the
high trainload of 646.67 tons, the
very fair car movement. and the
high average tonnage. per loaded
freight car, in proof of management
efficiency. He pointed out that the
largest volume of traffic ever moved
oy the railroads of the United
states was handled in the year I'M
der discussion. He called attention
TO the narrow range of discretion
left to management under the ar
rangements whereby their labor bill
or 81 cents put of every dollar or
expenses was on wages and under
conditions Of work determined by
a government agency. and that of
the 10. cents out of the dollar for
material 1t was estimated that at
least one-half was on the basis Of
prices fxed by the railroad admin
istration on overhanging contracts
which were the legacy of private
management.
In commenting on the relation Of
railroad rates to the profits of
larger agencies in the distributive
process, he showed unaccountably
large spreads between grower and
consumer after the transportation
charge had been taken out. and
urged that these spreads should not
De confused with the carriers
charge.
Fails to Meet Expeetatisns.
While consenting to the regula-
tory functions set up by the law,
kruttschnitt found that the perform
a1ce under the law So far did not
square with his expectations. He
cited specifically thai the labor
award against the carriers covered