Evening star., 1921-05-10
RAILWAY TROUBLE
CHARGED TO COST
"AbnormaI Amount" for
Labor, Kruttschnitt Tells
Senate Committee.

Labor, Kruttschnitt Tells
Senate Committee.
By the Associated Press.
The trouble with the railroads is
excessive operating expenses, IAN alb
normal amount of which is the cos,
of labor, Julius Kruttschnit:. chair
man Of the board of the Southern Pa.
cific railroad. declared today before
the Senate interstate commerce com
mittee. He was the first witness al
the opening of the congressional in
vestigation into the whole transpor'
tation situation.
Mr.. Kruttschnitt suggested five
remedies which he said were "eas-
lily applied and productive of grea,
economies" They are:
stop the use for common carrier
purposes of highways built with pub.
lie moneys without adequate tolls and
proper regulations
Make inland waterways built OF
improved at public expense carry
them selves as to interest on cost and
maintenance by regulating the COM
mon carrier traffic on them and by
imposing adequate tolls.
Keep the United States govern
ment out Of the business of operat-
ing steamships and stop the Lavish
expenditure Of public money to pro-
vide coast-to-eoast ocean transoorta-
tion in competition with transconti-
mental railroads.
Tolls for use Of the Panama canal
should be sufficient to pay interest on
it's cost. operating expenses and main
tenance.
DO not deprive transcontinental
carriers Of coast-to-coast trafhc by in
iexibly enforcing, . strict long-aAo.
short haul clause"
Propaganaa Charged
Mr.. Kruttschnitt read . prepared
stat tement, which opened with the as
sertion that freight rates were not
"Widesrread propaganda IL being
carried on to arouse public senti-
ment against existing freight rates" "
he said. THE fact is that even since
the rates have been advanced the cost
of transporting commodities is far
less than the toll taken by the COM
mission merchant and the retailer"
the general deflation and fall OF
prices had caused stagnation of busi-
ness. To support his argument that
railroad rates were not responsible,
he said that notwithstanding the low
est ocean tonnage rates in history
millions Of tons Of shipping here and
abroad were rusting in idlenesB BE-
cause there was such a small demand
for goods.
The percentage Of freight charges
to the average value of commodities
shipped in tho early part Of 1871"
he added. 'is only two-tenths Of I
per cent greater than in 1914.
Flays Government OwnershiD.
The trouble with our railroads
twenty-six months OF an experiment
In government ownership and opera
ton. The word Ownership Is used
advtsedly, as the federal railroad ad-
ministration treated the railroads az
II they were absolutely owned by
the government and turned them back
to their owners helplessly bound in
improyident agreements in the MAX
ing of which their owners had no
voice"
Taking up labor costs. Mr.. Krutt.
scnitt said the increase OF this cost
in 1920 over 1919 was $S73.s14,652 and
that II the increased scale which be-
came effective retroactively last May
had been in force during the whole
year of 1920 the wage bill for that
year would have been approximately
$3.50 .o0o,0 900. or $2.24o.sl7.Sss more
than 1t was in 1917. the last year OF
private operation before the war.
The government having strangied
the railroads into something like
bankruptcy" he concluded, at last
removed its hands and permitted q
sudden increase in rates that should
have been gradual and started at least
twelve years ago. We should bear In
mind and circulate widely the Presi-
dents epigram, More business in gov
eminent and less government in bust.
ness. I.i5.
Adjourns Until Tomorrow.
Mr.. Kruttschnitt had not concluded
his prepared statement when the com.
mittee adjourned until tomorrow.
In opening the session Chairman
Cummins read a summary Of railroad
earnings since 1913, showing larger
penditures rising at an even swiftel
rate. The tendency eliminated, ht
said, when in the year ended March
l. 1921, the roads received $6,175, ,962,.
900 for transportation services and
spent $5.s25.ass.51o in operating ex.
penses. After deducting taxation ant
rental charges, Senator Cummin,
said. the carriers had q net return
from investment OF only $4,000. 900.
II think it Is apparent that revenues
can never be increased from highe,
rates." Senator Cummins said, "If WI
cannot raise the railroad revenues, thu
problem before us is that Of ascertain.
! ing whether these railroads revenues
are efficiently and properly expended
! The gravity Of the situation. before tn.
American people Is plain. The trans
| portation industry of our country ha.
become permanently an unprofitabl,
| business"
The chairman said he presented hi.
statistics for the year ended March !
because that was the first year Of pri
vate operation after government con
| troll.
THAT'S scarcely true" said Senate,
Kellogg, republican, Minnesota. "Fou
the first six months of that year rail-
road operating expenses were fixed b,
statute. That isn't private control"
The committee discussed its p.uo,
| toward witnesses, and Senator Town
! send, republican. Michigan, demanded
that "all witnesses here be sworn
we've heard too many contradictions.
Chairman Cummins remarked that ap
| plying the oath to witnesses was nol
| the usual custom, but Mr.. Kruttsnit
Tas sworn.