The Rock Island Argus and daily union. (Rock Island, Ill.) 1920-1923, 1922-11-20
Frederick I askin's Letter
Congress and the Railroads.

make the necessary expenditure
Not only were the additions !,
equipment few: existing car. ~
locomotives were permitted Ia as
teriorate.
Good progress was being m,a.
in catching up when the shonmsSs.
strike came last summer. assa;,;.s
the railroads In a vulnerable Mac
Once more, they were set back
Terminal facilities constitr,.
another important angle Of ~
problem. Industry in the UnitsS
States has a tendency to Cent?.
about great cities. Everybody III.
to crowd in together. This ynean.
that tens Of thousands of cars ~
freight are all being shipped to ths
same places simultaneously. N.
inevitable result lis congestion
Tracks and sidings and loading ana
unloading machinery are insde.
qGate. The railroads claim mat
they have lacked the funds to mais
the desired Improvements.
During the war such funds w4re
not available. The Liberty boSds
put out by the treasury to finance
the war took all the cash the people
had. There was nothing left Ia II.
vest in railroad bonds. Labor cost,
rose so high that even with the in
creased freight rates. the cost az
operating some railroads was in ex.
cess of the amounts collected in
freight rates and fares. s
These are just few Of the all.
ments of the transportation svs-
TEN. 1t is said by some students
of the situation, that the vast sum
of $4,000, 900, 900 a year should be
expended for from five to ten years
on the American railroads to
bring them up abreast of the indus.
trial development of the country.
Whatever the total amount. it is
certain that immense sums must be
made available for period Of
years in any comprehensive plan Of
rehabilitation.
A Limit to Rate Increases.
Railroad rates cannot be in
creased indefinitely. There is
/ rule of economics known as the Law
. of diminishing returns. 1t means
that you can raise rates for Ger
tain period and obtain more money
thereby. After you pass certain
point of increase, instead of getting
more money you get less because
the charge is too high for the traf-
fic to bear and therefore fewer ship
ments are made. Late in the year
1920 that point was reached. Prices
of commodities went down and
rates stayed up. Shipments stop
ned. In many cases, particularly in
cases of agricultural products, the
price which 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 il 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.
fic. Everybody lost.
Since the rate increase oil lsse
there has been some reduction Of
railroad freight traffic. but the scale
remains high above the rre-war
level. Traffic is climbing up again
lrapidly with renewed prosperity
and is bringing trouble. Tie rail-
roads are not equipped to handle
the increase. Car shortage ana
terminal congestion are developln!
seriously along with the increased
traffic.
! The railroads claim that one
trouble is that congress has lmhel
their earnings. They say theI can
not sell bonds to get money to MAKE
improvements when congress iim,
its the earning power. Secretary "
the Treasury Mellon has frank!
EXPRESSED the opinion that there Il
too much railroad regulation. az
has proposed what he terms hoil'
day for the railroads-that IS per
100 OF HNe veal > vi n.y.
restrictive legislation will De lafse
lly withdrawn from railroad opera
ton, permitting them to make a
, much money as they can. lie n i,
. pointed out that the course Oh ran RAJ,
road rates was down as the resu'
, NJ competition before the adVen' y
: federal regulation and that since ~,
. interstate commerce comniiss'o,
was established to regulate ta..s
the course of rates has been w
ward. Mr.. Mellon says the ioa ~.
and the public were both oetlef w VI
: without restrictive regulation, an
) it may be that he will undeftahe ,a :
} tell congress how his hoiiaa! p' n
can be carried into effect AZ az ~
rate congress is about to tacsie ~
problem again and the COUNT! on
9 the railroad companies must a"I
1.-THE result. Meantime, enough u "'n
, are running so that one mas u
i, carofu1 at crossings.