The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1921-09-13
RAILROADS MAKING MONEY.

state commerce commission by 1872
Class 1 railroads operating more than
| 227, 900 miles, show a net operating
income for July of $6s, 451 900 against
a deficit of $11.452. 900 in July o1
1890. There are eleven Glass 1 roads
that still have to submit their July
reports, and it is possible that the
total net operating income for the
month will be between $70,000,0O6
| and $75,0O0,000. Such a showing
would mean that the Glass 1 roads
would have earned nearly 5 per cent
of the per cent called for under the
| transportation act.
Analysis of the returns of the 1919
roads thus far reporting discloses
| operating revenues of s454,255. 900
| compared with $51s,Ss1,0 900 in July
last year-a falling off of 12.4 per
cent in operating revenue. Operating
| expenses for July, however, were only
| $S55,671 900 compared with $685.
Gil, 900 in July, 1920. This Is re-
duction of about $14s,0OO.00 or 2s.4
per cent. The saving as a result of
the wage cut is estimated at about
| 100000 for July. The rest of the
| decrease is due to reduction in ex-
penditures for maintenance, structu-
raj and repair work.
Altho the railroad earned from 4 II
to per cent in July on their tenta-
tive valuation, the answer to tie plea
of Clifford Thorne, representing the
American Farm Bureau. Federation,
was that they could give farmers no
rate reduction, because they were not
earning the fair return" allowed by
the Cummins-Esch act, viz, 5 Il per
cent.
Opposing the petition of the
| farmers, the railroad companies insist
that under the provisions of the trans
portation act the interstate commerce
commission has no authority to re-
duce freight rates because of a claim
that they are higher than can be
borne by the traffic profitably. They
insist that the only basis to be con-
sidered is that of the cost of trans
portation to the carriers. This, of
course, is the traditional defensive
position of the railroads and of all the
allied public service utilities. 1t would
seem that, in considering the petition
before it, says The Christian Science
Monitor, the interstate commerce
commission might wisely direct it's at
tention to what is shown to be the
present volume Of business handled
by the railroads in the states of the
west and middle west. in comparison
to what might be the maximum, or
even the normal volume of that busi-
ness. provided an unobstructed outlet
were given to the surplus products of
those sections. 1t requires no argu-
ment to establish the fact that rail
road can transport a thousand or ~
hundred thousand tons of hay or
grain more cheaply per ton than 1t
can transport smaller units of that
tonnage. The same is true of all COM
modities. The comparison applies
problems in the cities and to those
utilities which furnish light, heat, and
power After the fixed overhead ex-
pense is paid, the profit is in the in
creased volume of business handled.
Testimony adduced at the hearings
before the interstate commerce COM
mission in the matter of the petition
that, because of the high freight
rates, there has been a tremendous
loss during the present year, both 20
the producers and to the consumers,
in food products that have gone to
waste. The market value of these
products was not great enough to abb
sorb the cost of transportation de-
manded by the carriers.
SHOULD 1t be regarded as a sound
economic policy" asks the Monitor.
ITO continue to allow the railroad
companies to demand rates which will
return to them a profit as great for
carrying q part OF the products of
the farms as they would receive had
they been required to carry all the
surplus products? The position of the
railroads seems to be that they have
the right to dictate the carrying
charges on such a volume of traffic
as they can handle at the greatest
profit. The farmers have every righ5
to claim that the government has the
power. and that It is its duty to fix
as a maximum charge one that will
return a reasonable profit on a nor
NAL flow of traffic, and that this nor
NAL flow should be estimated after
taking into account the usual volume
OF production and the average de-
mand for the commodities offered at
the point of natural distribution"
Latest reports from the farming
districts of Kansas are that cattle are
being shipped to market and sold at
a price that is not sufficient to pay
! transportation charges. Also. that
farmers are storing their hay to await
higher prices or lower freight rates.