Evening journal., 1922-11-25
ING ooAn RAILWAY Pes

T,H Railway Age. In an editorial. calls attention tc
il the fact that the average price per ton paid by the
q railways for coal was 40 per cent. higher in August than
in April, and that this added s17,5oo,ooo 70 railway
Operating expenses in August alone. It shows that this
increase in the cost Of coal has largely reduced railway
net operating income.
"rhe net operating income of the railways sharply
declined In August and September" says the Railway
Age. 1T was 40 per cent. less in these months than in
the same months OF 1921. This decline has been attrib-
uted TO the reduction OF rates made on July l, and to
the effect OF the shop employee strike.
Detailed statistics OF operating expenses for August
which recently have been made public by the Interstate
Commerce Commission disclose that there was another
factor which was OF very great Importance. This was
the increase in the price that the railways had to pay
for coal
Before the coal strike began last spring the average
price the railways were paying for coal was declining,
and in April. the month Immediately following the be-
ginning OF the strike when the prices charged into the
accounts were those paid before the strike began. the
average cost of railroad coal was s3.4s a ton. From
that time the cost began rapidly to increase. and in
August it was s4.s7, an increase since April OF s1.41, or
over 40 per cent"
The railways. including those that operate on the Del
marvia Peninsula, use about 1~2,50O,00e tons of coal a
month. Therefore, this increase in its cost OF S141 a
ton added about s17,5OO,Ooo to their operating expenses
In August. This increase In operating expenses resulted
in an equivalent reduction OF their net operating In
come. The reduction in their net operating income as
compared with August, 1921, was ss7.sOO,oeo. There
fore, the increase IN the cost Of coal alone was respon-
sible for almost one-hslf OF the entire reduction ot'their
net operating income.
The railroads have had a strike of their own. It has
them a great deal OF money. Nobody has pro-
posed to allow them to advance their rates to Offset the
expense caused by the shop employees strike.
On the contrary, most OF their rates, including those on
are now 10 per cent. less than they were before
July 1 when the shop employees strike began.
The coal operators had a strike In their mines. They
IT, In consequence they are paying the same wages
to the miners now that they were prior to April /. The
strike caused a shortage OF coal. The coal opera
tors have. in consequence. greatly increased the price
he railways have to pay for coal.
The railways are not only being forced out OF re-
iuced rates.to pay the cost OF the shop employees strike,
'ut also a large part of the cost of the coal strike. They
consume about one-third OF all the coal produced.
Therefore. they arc paying, roughly, one-third Of all the
Increase in the cost Of coal due to the coal strike. /
It may be said that the advance in the price OF coal
vas commercially j~ustihable because OF the shortage of
l. But there Is also a shortage Of transportation about
which the coal operators frequently complain. II the ]
oal operators are justified in increasing the price the
ailroads have to pay for coal 40 per cent. because of
he shortage Of coal, upon what theory OF morals or :
economies can It be commended that the railroads should a
Q required. not merely to refrain from advancing their t
on coal, but to continue TO haul II at rates which ,
re 10 per cent. lower than they were before the coal 2
began7 =
When is the increase in the prices the railroads have Z
pay for coal going TO stop7 In only one month Of Z
go or 1921 was the average price they paid as high as !
August, 1922. This was in November. 1920, when It !
as 34s2. There is in some sections a powerful agita- Z
on for further reductions OF railway rates. Those I
arrying on this agitation might we'll direct their at !
sntion TO the price OF coal. Z
How can the railways be expected to reduce rates :
when within efx p,optba +ha o,4 - .h-t- -, - 9
Z the largest Items in their operating expenses. has
cen increased 40 per cent? c