Albuquerque morning journal., 1922-11-26

tionship to rates of transportation,
When some small companies aban-
doned operation and tore up laair
rails, selling them for junk. a.
steel value was higher than the
track value.
The same Is true of railroad
equipment few; existing cars and
tlVes necessary to handle the traf-
Tic offered y ere insufficient. These
things cost money and the rail-
roads did not have the funds to
make the necessary expenditures,
Not only were the additions TO
equipment few; existing cars and
locomotives were permitted to de-
/ teriorate.
Good progress was being made In
catching up when the shipments
strike came last summer, assailing
the railroads in a vulnerable place,
once more, they were set back.
Terminal facilities constitute an
other important angle of the prob
lem. Industry in the United States
mas 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 newt
able result is congestion. Tracks
and sidings and loading and un-
loading machinery are inadequate,
The railroads claim that they have
lacked the funds to make the de-
sired Improvements.
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 peo-
pie had, There was nothing left to
| invest in railroad bonds. Labor
costs rose SO high that even with
the increased freight rates, the cost
of operating some railroads 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 student of the
| ituation, that the vast sum of So
O00,000,0O0 year shculd be ex-
| pended for from to 10 years on
| the American railroads to bring
| them up abreast of the industrial
development of the country. What
ever the total amount, it is certain
that immense sums must be made
available for a period of years in
any comprehensive plan of rehab-
.ilitation.
Railroad rates cannot be in
creased indefinitely. There is a rule
or economics known as the law of
diminishing 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 traf-
| fic 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, particu-
larly in cases of agricultural prod
ucts, the price which a commodity
would bring at the market was lit
| tie or no more than the freight
| rate to the market. OF course, no
| FARMER would ship hog to market
II the freight cost Of the shipment
would equaI the whole price OBJ
tanned. The result was that the
farmer lost the sale and the rail-
road lost the traffic. Everybody
lost.
The railroads claim that one
| trouble is that congress has limited
their earnings. They say they can
not sell bonds to get money to make
tV,aya
it's the earning power. Secretary of
the Treasury Mellon has frankly
expressed the opinion that there is
too much railroad regulation. He
has proposed what he terms a holi.
day for the railroads-that Is a pe-
| riod of five years or more in which
| restrictive legislation will be large
ly withdrawn from railroad opera
ton, permitting them to make as
| much money as they can, He has
pointed out that the course of rail-
road rates was down as the result
OF competition before the 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 public were both better off
without restrictive regulation, and
1t may be that he will undertake to
tell congress how his holiday plan
can be carried into effect. At any
rate congress Is about to tackle the
problem again and the country ana
the railroad companies must await
the result. Meantime, enough trains
are running so that one has TO be
J careful at crossings.