Evening star., 1921-10-23

Operating costs of railroads must
be reduced in order that a parity of
price levels may be reached. and
this will result i'll Increased returns
TO the railroads through greater
volume of business and Improvement
of conditions for employees through
more certain and stable employment.
This Is the opinion of the Inter-
state Commerce Commission. written
all through the decision handed down
yesterday, ordering western roads to
reduce their rates on certain agri-
cultural products The decision is
regarded as a remarkable one, princi-
pally in that it steps aside from
the usual custom of the commi issIon
in deciding on particular appeal to
discussion of the general economic
situation.
Emphasis is laid in the report upon
railroad wage increases having been
greater than in other lines of indus
try and having been maintained after
the war, while there has been a
marked deflation generally in nearly
ali other lines of industry.
The particular case under consid-
GRAFTON was costs for transportation
Of hay, grain and grain products. and
this led the commission to lay stress
upon the plight of the farmer. say
ing:
There Is testimony tending to show
that if present conditions are con-
tinued the less fertile farms will not
be cultivated next year. the acreage
of grains will be curtailed. and re-
organization of farming must follow
along lines less favorable to society
and to the railroads. 1t is predicted
that the ultimate result will be a
suffering.
Few Cents Per Hour.
The evidence indicates that in nu-
merous and not unusual instances af-
ter deducting other costs the amount
remaining from the price received for
their crops gives them but from TO
% cents per hour for their own labor
and for that of others employed on the
farm: that if allowed Ii cents per
hour for the time spent in producing
crops of hay and grain, many farm
ers could not pay their taxes or the
interest on their investment ar mort
gage indebtedness. The labor used in
transporting their crops by rail to
market is. they point out. paid on a
much higher basis than farm labor.
In showing the results of an anal
ysis Of quantity and cost of labor
employed on all class l roads in the
United States in 1920 as compared
with 1916, which is taken as normal
! year, the commission points out that
! there was an increase in total COM
ipensation from $l.46S.576,3a4. in 1916,
to 33.69S,216,351 in 1920. The number
of employees increased 1886 per cent:
number of hours worked. 500 per
cent; number of days worked, 1886
per cent: average compensation per
hour, 1921 per cent: average COM
pensation per day, 1O1.97 per cent,
and average compensation per em-
ploye, 1O4.O4 per cent. This compare
aon does not fully reflect increases in
,ot, ,iuSin ion a N
as a 81 per cent increase in wages
authorized by the Railroad Labor
Board was in effect only seven
months of 1920.
Big Economic Saving.
In calling attention to the fact that
relief measures already adopted are
certain to result in big economic saw
ing. the commission says:
July I, 1921, there became effective
reductions estimated to average about
t2 per cent in wages, and certain
changes in labor rules and working
conditions have also been accom-
plished which have lessened expense.
For the entire country and upon the
basis Of normal number of employees
it is estimated that these reductions
in wages and changes in conditions
now In effect will produce a saving
OF about $425,000. 900 per year. Term
contracts for supplies, entered into
at high price levels. still are holding
the operating expenses of various
carriers to levels which must be ac-
cepted as abnormal. With the ex-
piration of these contracts, lower fu-
ture costs are reasonably to be ex-
pected."
As a justification for the very un-
usual DEPRESSION in discussing the
mission says:
we are to administer. and. so far
as possible. give force and life to all
the provisions of the interstate COM
merce act. Section 1 requires that no
moro than just and reasonable rates
for transportation be eXacted, and in
determining what is just and reason-
able 1t has always been recognized
that. among other factors. not only
the cost of the service but its value
TO the user must be considered. In
The exercise of our power to prescribe
Such rates, however, we are now re-
luired by section 15a to initiate,
modify, establish or adjust rates fas
that term is defined in the section) so
shat carriers as q whole or in desig-
mated rate groups will, under proper
standards of operation, earn an ag-
SreEate annual net railway operating
to a fair return upon the aggregate
value OF the railway property of such
carriers held for and used in the
AArvice of transportation"
Benefit OF Roads.
Emphasizing that not only the gen.
eral industrial interest. but the self
interest of the railroads is for lower
rates, and that in bringing about
lower rates through decreasing oper-
ating costs the railroad employees
will benefit all other people of the
country in decreased cost of living,
the commission explains as follows:
1.-The conditions with which we are
called upon to deal are extraordinary
and unique, since they are the aft
ermath of a world catastrophe. The
sufferingS of the western farmers
may he ascribed to that fact. The
prostration of agriculture in this
country is the product of worldwide
forces. The high level of freight
rates has been an obvious and tangi-
BILE circumstance, which has quite
naturally been a target of dissatis-
FACTION, but we are not persuaded
that 1t has been more than a minor
SSctor in bringing about distress
The important thing at present,
however, is not the source of the dis
ease but the means Of recovery.
Whatever part freight rates may
have played at the outset, many quail
Nied to form an opinion entertain the
view that the present level of these
rates Is one OF the obstacles in the
way of returning prosperity, and
likewise one of the obstacles to sub
stantial reduction in the cost of liv-
ing. The fact that many railroad
.,ho S,tt toll