The New York herald., 1922-01-12
RAIL CHIEFS FEAR
TOO RAPID RATE CUT
Reductions Must Parallel Low
cred Operating Cost, I. c.
C.. Is Told.
Special Dispatrh 10 THE NEw fosk HERALD.
New York Herald Bureau.
Washington, ID. g., Jan. II.

Special Dispatch TO THE NEw Yosk HERALD.
New York Herald Bureau.
Washington. ID. g.. Jan. IL.
Reductions ic freight rat ties without
similar cuts in the operating expenses
and costs will seriously jeopardize the
stability of the transportation system
OF the country ara exhaust the financial
resources that the railroads now have,
the Interstate Commerce Commission
was told by railroad representatives at
the resumption oc the inquiry into the
Jeasonableness OF existing rates.
The railroads emphasized the fac.
that they have not been able to make
cuts in their operating expenses as
rapidly as the volume of traffic has
fallen. thus deplc ting their reserves and
forcing them ini" a strai;ened financial
condition.
The principal witnesses for the rail-
roads were Daniel Willard. president OF
the Baltimore and Ohio Railroad: X. II.
Ashton, president OF the American Rail-
way Association and George M. Shriver.
statistical expert for the railroads.
Outstanding among the features at
the reopening of the hearing was an
invitation of the commission to Secre-
tary Hoover to appear before II as
witness In behalf of the business in
terests of the country and the consum-
ing public.
Railroad rates are declining as rap
idly os the public has fairly right to
expect. Mr.. Willard said, and emphasiz-
ing the fact that freight rates now are
more than ever before subject to GER
tain fundamental economic laws against
which they cannot prevail. and which in
the end always force them to lover
levels to meet existing conditions
THE economies that are possible 10
effect in railroad operation have been
greatly overestimated." said Mr.. WIZ
lard. 1T is inconceivable that railroad
managers are neglecting to seek
economies In any and every direction
when they are so hard pressed between
the forces that tend to keep up the
operating costs on the one hand and
charges on the other.
Il do not minimize the possibilities Of
economy In the various small ways that
are open, but have my opinion that the
solution OF our present situation is sCl
to be found in that direction.
Il do not think that the best interests
of the public will be promoted at this
time by action of any kind which would
tend Immediately to reduce the reveaue
Of the carriers" said Mr.. Willard.
Rates will eventually come down, bI-
to unduly hasten the movement would.
In my opinion. be unwise and would
not tend to promote the larger public in
terest."
Railroad wages in the four years
ending with 1920 increased l54.77 per
cent, it was developed by Mr.. Shriver
In discussing the heavy increases in this
direction to which the carriers have
been subjected. Other items Of expendi-
lures increased in equal ratio, or still
more, he said. The cost of coal in
creased 1857 per cent, he said, and
the costs of other materials and sup
plies to the extent Of 1871 per cent.
The expenses from loss and damage in
the movement Of freight Increased 294
per cent. during that period, he said.
During the year S45S,00O, 900 for
maintenance and Detterments is needed
to handle the present volume of traffic
An additional amount of $500, ,000, 900
will be required to handle traffic of nor
NAL conditions.
He developed the fact that the prices
OF materials used by the railroads arc
not back TO normal basis and that the
railroads with their present revenues
are able to buy only such supplies as
are essential to the protection of their
properties as a whole