Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1922-11-23
and locomotives were permitted to de

n locomotives We're permitted to de-
te%riorate.
Good progress was being made in
catching up when the shopmen's
strike came last summer, assailing the
railroads in a vulnerable place. Once
more, they We're set back.
Terminal facilities constitute anoth-
er important angle Of the, problem,
Industry in the United States has a
tendency to center about great cities.
Everybody tries to crowd in together,
This means that tens of thousands of
cars of freight? are all being shipped
to the same places simultaneously.
The inevitable result is congestion,
Tracks and sidings and loading and
unloading machinery are inadequate.
The railroads claim that they have
lacked the funds to make the desired
improvements. 2 H..
During the war such funds were not
available. The Liberty bonds put out
by the treasury to finance the war
took all the cash the people had.
There was nothing left to- invest in
railroad bonds. Labor costs rose $50
high that eve with the increased
freight rates, the cost of operating
some railroads was in excess of the
amounts collected in freight rates and
fares. ys
These are just a, few Of the ailments
OF the transportation system. 1t is
said by some students of the situation,
a year should be expended for from
S to 10 years on the American rail-
roads to bring them up abreast of the
industrial development of the country.
Whatever the total amount, it is GER
tain that immense sums must be made
available for a period of years in any
comprehensive plan of rehabilitation.
A Limit to Rate Increases.
Railroad rates canno be increased
indefinitely. There Is g. rule of eco
nomics known as the law Of diminish
ing returns. 1t means that you car
raise rates for a certain period and
obtain more money thereby. After
you pass a certain point of increase,
instead of getting more money you get
less because the charge, is too high for
the traffic to bear and, therefore fewer
shipments are made. Late in the year
1920 that point was reached. Prices
of commodities went down and rates
stayed up. Shipments stopped. In
many cases. particularly in cases Of
agricultural products, the price which
a commodity would bring at the a
.ket wasLittle or no more than the
freight rate to the market. OF course,
no farmer would shipta hog to mar
ket If the freight cost Of the shipment
would equal the whole price obtained.
The result was that the farmer lost
the sale and the railroad lost the traf-
ftc. Everybody lost.
Since the rate increase OF 1920 there
has been some reduction OF RAILROAD
freight tariffs. but the, scale remains
high above the pre-war level. Traffic
Is climbing up again rapidly with re-
newcd prosperity and is bringing trou-
BILE. The railroads are not equipped
to handle the increase. Car shortage
and terminal congestion are develop
ing seriously along with the increased
traffic. NJ
The railroads claim that one trou-
BILE is that congress has limited their
earnings. They say they cannot sell
bonds to get money!to make improve
ments when congress limits the earn
ing power. Secretary Of the Treasury
Mellon has frankly expressed the
opinion that there 10 too much rail
road regulation He has proposed
what he terms q holiday for the rail-
roads-that IS a period; of five years
or more in which restrictive leglsla-
ton will be largely Withdrawn from
to make as much money as they1can,
He has pointed out that the course
OF iTailroad rates was down as the re.
suit kof5 competition before theaadyent
OF federal regulation and. that since
the interstate commerce commission
was established to regulate srates,the
course OF rates has been upward. Mr..
Mellon say6 the roads and the public
were both batter 81 without restric-