Evening star., 1921-09-03
PUBLIC PAYS LESS
FOR RAIL SERVICE
Transfer From Government
to Private Control Brings
Noticeable Change.

In spite Of higher railway rates.
both passenger and freight. the peo-
pie Of the United States paid almost
$21,000.000 less for railroad trans
portation in the first six months of
1921. under private operation. than
they did in the first six months Of
1919. u9der government control. ac-
cordinEsto an editorial in the current
number of the Railway Age. The
editorial continues:
Various Causes.
This was due partly to the fact
that a smaller amount of railroad SER
vice was rendered. but mainly to other
causes. The first half Of 1919. like the
first half of 1921. was a period of
business depression. The amount Of
freight service rendered was 7h
per cent less than in the correspond
ing part of 1919. and the amount of
passenger service rendered almost
Is per cent less. But in spite OF the
smaller traffic handled the total earn
ings of the railways in the first six
months Of 1921 were almost $320,00O.-
900 more than in the first six months
of 1919. How. then. 1t may be asked.
can it be that the public paid less
for its railroad service than in the
first six months of 1892,
The explanation is very simple. In
1919. under government control. the
public paid in taxes for part of the
transportation service it received be-
cause the railways were under gov
ernment control and incurred a large
deficit. In the first half of 1921 the
public paid for its transportation en-
tirely in freight and passenger rates
because the railways were under pri-
vate operation.
"The total earnings of the RAILWAYS
in the first six months of 1919 from
their rates were $2.356, ,6S5, 800, but the
government in these six months, ac-
cordfng to the estimate of Director
General Hines. incurred a deficit of
$269,101.654. which made the total
rates and taxes s2.652.7S6.ss4. The
various governments. especially the
state governments, got back from this
amount in taxes paid to them by the
railroads $91 1,663,514. This made the
net cost to the public of the railroad
Heavy Losses.
"In the first six months of 1921 the
total earnings of the railways were
$2,676,497,252. The amount of taxes
paid by the railways to the national
and state governments was $136,120.-
80. Deducting this from the earn
ings makes the total net cost to the
public of the railroad service it re-
ceived $2.540,376.442, or $20,747.02S
less than the net cost in the first six
months Of 1919.
1.-The saving made to the public in
the total amount paid by it for rail-
way transportation was made at the
expense of very heavy losses to the
owners of the railways. The net oper-
ating income actually earned by the
railways in the, first six months of
1921 was less than $142,000.000. This
was about one-third of the net re.
turn they received in the first half Of
1919 under government control, when
their net return was guaranteed. 1t
was about $95,O00,000 less than the
mere interest on their bonds. since six
months interest on their bonds is
about 1921. 100000.
1.-THE necessity of paying given
amount Of taxes imposes as much OF a
burden on business as the necessity OF
paying a given amount of rates. The
present cost of railroad transporta-
ton undoubtedly is tod>high. but 1t Is
the railway owners rather than the
public who have suffered most from 1t
thus far this year, since, while the
public actually has paid less for rail-
road service than it did lin 1918 under
government control, the owners Of the
railways have received many millions
of dollars less Of net return"