Evening journal., 1921-03-31
1O9 ROADSFAIL
TOPAY EXPENSE
Fall $68,439,S0O Short of
Earning Amount Fixed
BY the Law
WAGE REDUCTION
DEEMED ESSENTIAL

WASHINGTON, March alt de-
veloped upon the eve Of the Presi-
dents conference with the chair
men OF the Interstate Commerce
Commission and the Railroad Labor
Board upon the railroad problem
that in January the carriers suffer-
ed deficit Of s1.167.SOO and that
lps out Of 2O2 railroads failed to
earn the expenses and taxes. COM
pared with SS in December.
As a result Of this deficit the car
riers failed by sGS.439,SOO. or ap-
proXimately 1O2 per cent, to earn
the amount which it was estimated
they would earn under the Increased
rates fixed by the Interstate Com
merce Commission i'm accordance
with the Transportation act.
or the lO9 railroads which failed
TO make expenses and taxes, as were
in the Eastern territory, l6 in the
Southern and as in the Western dis
trict
A letter written by Chairman
Clark, of the Interstate Commerce
Commission, to Senator Harris, of
Georgia, bears directly upon the
transportation problem as outlined
by President Harding after he had
summoned the heads OF the Govern
ment agencies to meet with him be-
fore laying the whole question be-
fore Congress for action. Chairman
Clark sees no probability Of railroad
rate reductions in the near future.
Il wish IL were possible for me tc
write you encouragingly in response
to your letter Of the Sd instant" Mr.
Clark said, but l do not see that ]
can add to what / said in my letter
to you of December % on the same
subject to wit, the probability Of re.
| auctions in freight rates.
The situation is not so good now
as II was in December. There ha.
been substantial falling off in gen.
eral trafiic. The average operating
ratio Of the railroads Of the United
/ states is something over 90. Thai
/ means that for every dollar that tn,
railroads earn they pay out in oper
| ating expenses more than 90 cents.
Due to the narrow margin be
tween revenue and operating ex
penses good many railroads ar,
not earning their operating expense,
and fixed charges and a good man,
are not even earning their operatinl
I expenses. Under these circum
! stancs ii is difficult to find an argu
ment in favor OF reducing rates un
less in instances in which II can b,
shown that the rates are sitting tn,
/ traffic and that lower rates which
, still would be compensatory woult
effect movement from which ther,
would be some return"
, These in effect are the views which
Chairman Clark will confde to tn,
President when he and Chairman
Barton, OF the Railroad Labo
Board, confer with Mr.. Harding to
day or tomorrow. He will insis
that under existing conditions O
railway operation. ii will be impossi
bic to reduce rates generally withou
forcing a great majority of the rail
roads int othe hands OF receivers.
What Chairman Barton will sa
to the President is not so clearl
forecast He will come straigh
from the hearings which the Rail
road Labor Board has been holdin
regarding the abrogation OF the wag
agreement He will have fixed /
his mind the point OF view OF bot
the railway executives and the mor
the financial distress Of the one ele
ment and the determination to re
sist wage reductions of the other.
, In advance of this important cor
ference there Is general agreemer
here that the private managemer
) Of the railroads is again in the ba
1 ances and can only be saved by
sweeping reduction in the cost OF OF
Grafton. This reduction is possible
on a large scale. only through a r,
e vision downward Of the existin
4 wages paid TO railroad labor.
Some economies, il is admitte
may be effected through the merg,
OF the individual lines into region
d systems and through the joint use
rolling stock. OF terminals and othl
properties, as proposed in the Wa
field plan. But they will not Z
far, it is feared. toward rescuing Il
y carriers from their present predic
ment.
The solution OF the problem. ther
fore. seems TO lie in the willingne
of the three million or more ra
I. NaV onoraffvos 10 accenf loss ma