The Washington herald., 1921-05-26
SENATORS CLASH
ON QUESTION OF
LOWER RAIL RATES
Democrats Declare c u t
Must Be Made to Re
vive Industry.
ELLIOTT ON ST A N d
Northern Pacific Head Says
Roads Made No Profit
In Three Years.

Sharp differences of opinion over
tn. practibility of effecting a gem
eral reduction in rates in arriving
at a solution of the railroad prob
lem developed among members of
the senate investigating committee
at yesterdays hearings.
Describing the rates as prohioi-
tive and excessive. Senator Smith.
democrat, of South Carolina, made
the assertion that they must come
down II business and industry Is to
be reytyed. Senator Pomerene, of
Ohio, another democratic member
of the committee, took the same
position
Must Have q. $. Guarantee.
Senator cumpins. of Iowa, chair
man of the committee, indicated
that a reduction might be accom-
pIished il the government Is will
ing to pay the bill. should 1t be
found that II cannot be done sue
cessfully. He said:
IF congress will make another
appropriation to sustain the rail-
roads we can consider general rate
reductions. without any net IN
come II is quite obvious that rates
cannot be reduced II the roads are
TO continue operating.
Howard Elliott, president OF the
Northern Pacific, who resumed his
testimony before the committee
yesterday. sided with Chairman
Cummins.
Making a general reduction In
freight rates" he asserted, will not
help solve the present complicated
economical and psychological condi-
tfons in this country. but Will re-
duce stin further the ability of the
railroads to survive and become
buyers themselves Of those articles
which, when they are prosperous.
they use in such large quantities.
Must Cut Expenses First.
Il do not mean that no rates
should be readjusted. but 1 believe
il would be unfortunate to give
thu impression at this time that the
railroads can be sustained as con-
templated in the transportation act
and at the same time make WY
general reduction in rates until 1t
is evident that expenses have been
reduced sufficiently to justify it
Reductions in charges in other in
dustries cannot be used to justify
a decrease in rates, Elliott asserted.
These reductions, he said, are due
to the defiation which naturally
followed the war era of high prices.
In the case of the railroads, how
ever. no period of imitation was ex-
perienced. he declared.
Gives Causes for Plight.
The roads made no profit at all
in 1918. 1919 and 1890. so there is
no basis for defation. of railroad
prices or rates at the present time,
he testified. Rather there is a ne
cessity for holding them where they
are until the country finds out
what will be the results of the
transportation act and the orders
of the interstate commerce COM
mission and the labor board"
As reflected in the condition of
his owp road. there are five causes
for the economic plight of the car
riers. Elliott asserted. He enumer-
ated them as: D wage increases
and labor agreements; (2) the more
general application of the S-hour
day; CD increased taxation; (4) in
creased cost Of fuel and materials:
(5) Increase in passenger train
service
The expense reduction which will
result from the railroad labor board
cut will total about 100000, 900, 1t
was learned yesterday. This will
mean an averagecut of Is per cent
IN the wages Of unskilled railroad
labor.