Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-11-23
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CONGRESS AND THE RAILROADS

high that even the increased freight
rates, the cost Of operating some rail-
roads was in excess of the amounts
collected in freight rates and fares.
These are just a few of the all
ments of the transportation system.
1t is said by some students of the sit
~uation, that the vast sum OF S2,UOU,-
OOO, 900 q year should be expended for
from 5 to 10 years on the American
railroads to bring them up abreast OF
the industrial development of the oun
try. Whatever the total amount, 1t Is
certain that immense sums must be
made available for a period of years In
any comprehensive plan of rehabilita-
ton.
A Limit to Fate Increases
Railroad rates cannot be increased
indefinitely. There is a rule OF eco
Monies known as the law of diminish
ing returns. 1t means that you can
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 shipm ents 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
market was little or no more than the
freight rate to the market. OF course,
no farmer would ship a hog to market
if the freight cost of the shipment
would equal the whole price obtained.
III -ou.tk thn& SLr ~, -. lncs
the sale and the railroad lost the traf-
fic. 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-
newed prosperity and is bringing
trouble. The railroads are not equipped
to handle the increase. Car shortage
and terminal congestion are developing
seriously along with the increased traf-
fic.
The railroads claim that one trouble
is that congress has limited their earn
ings. They say they cannot sell bonds
to get money to make improvements
when congress limits the earning pow
er. Secretary of the Treasury Mel
Ion has frankly expressed the opinion
that there is too much railroad regula-
ton. He has proposed what he terms
a holiday for the railroads-that is, a
period of five years or more in which
restrictive legislation will be largely
from railroad operation. per-
hitting them to make as much money
as they can. He has pointed out that
the cours of railroad rates was down,
as the result of competition before tine
advent of federal regulation, and that
since the interstate commerce commits
sion was established to regulate rates.
the course of rates has been upward.
Mr.. Mellon says the roads and the pub
lie were both better off without re
strictive regulation. and it may be that
he will undertake to tell congress how
his holiday plan can be carried into eff
feet. At any rate, congress is about to
tackle the problem again and the coun-
try and the railroad companies must
await the result. Meantime. enough
trains are running so that one has to
be careful at crossings.