Evening journal., 1922-03-11

this noon, said:
Railway executives just as much
as anybody else, want to bring
railroad rates as soon as possible.
back to a fair relationship to the
value Of commodities What best
promotes full, sound economic ac-
lactivity is always best for the rail-
roads, as well as being best for the
country
THE way TO accomplish this re-
suit however, is not by iu-consld-
cred rate reduction agitation, re-
gardless Of its effect, but by an or
derly liquidation of operating ex-
penses and rates, hand in hand.
To this policy the railroads gem
orally have been committed since
October IA, 1921, when they deter
mined to apply for a further reduc-
tion in wages. with tho undertake
5 ing that the reduction received
would be passed on to the public
in the shape of reduced rates. on
November 16, 1921. they made
voluntary 10 per cent. reduction in
the rates on farm products, the
funds to Justify which must come
from wage reductions now in con-
troversy before the United States
Railroad Labor Board. No rate re-
duction, voluntary or otherwise.
made since last October. can be JUS
tilted. except upon the basis OF a
relief in operating expenses stlll to
be obtained through further wage
reductions.
There is a current deluslon that
Ia Gfh h
grew rich out of the European war.
such a conception naturally arises
from a period in which prices and
values were marked up in terms OF
an inflated dollar But the truth is
that the United States did not grow
richer, but poorer. For a short
time during 1919. and the early
part Of 1917. this country was en-
riched by perhaps a few billion dol
lars, at the expense of the agony
and peril OF Europe. From the
moment, however. that the United
States entered the war, practically
the entire surplus OF earnings that
formerly was saved for the increase
OF our houses. farms, cattle, rail-
ways and other improvements to
the country's productive physical
plant. was diverted to warfare and
waste.
Prior to the war, the American
people realized a gross national
income of about thirty-three or
thirty-four billion dollars a year.
They spent about twenty-six or
% twenty-seven billion dollars. which
, was put into houses, factories. rail-
ways, public utilities. mines. farms.
etc. II there had been no war. the
people of the United States during
the years 1917 to 1920, inclusive.
: would have increased the physical
plant Of the nation by some twenty
eight billion dollars. But instead Of
that, and despite our enormous
i annual income. measured I'm terms
G OF an inflated dollar, It is doubtful H.
( during the four years 1917 to 1920
o inclusive, the physical plant OF the
!. people Of the. United States was in
. creased in value more than four oi
> five billion dollars.
s 1T is obvious, for instance, that
a the countrys housing accommoda-
bons have not increased sufficiently
The building figures show, broadly
D speaking, that construction for the
e. four years 1917 10 1920. inclusive
a has hardly been sufficient to make
4 up the annual losses by fire. acct
. dent and obsolescense. It IS equally
obvious that the necessary annual
S increase in railway facilities has not
been made. The railway mileage IN
operation today is less than # was
five years ago The number Of car,
and locomotives remains substan
20 TALLY the same. and the proportion
{ OF new equipment is below normal
0 THE truth is that for four year,
. past, we have been living upon oui
fat. We have been consuming oui
national income in mere living eX
8 lpenses and luxury without making
the necessary annual additions {,
our physical facilities and at tn
a expense OF even the adequate main
- tenance of the physical facilitle
l. which we possessed before the war
4 Meanwhile, during the period 4
which this took place, the share O
the product of industry taken b.
labor IN wages has increased from
point somewhere around 20 pc
cent. to a point somewhere aroun'
ID. oN per cent I ne NIbphlAANN Vi Ai
product Of industry going to labo
ID has become excessive while tn
e proportion Of the product OF indus
- try going TO capital and manage
ment has become insufficient.
I'VE have now come to a poin
r where the economic possibility O
m continuing this situation no longe
o exists. The national income 10
1921, although not definitely ascei
~ tainable, must have been man
billions Of dollars less than the ma
Is tonal income for 1920 Nothing ca
4 stop this downward readjustmen
When It has been accomplishe
there is every reason TO believe tina
the national income OF our peopl
will not be in excess Of what II wa
o- before the war. At the same time
the expenses Of government HAY
IA necessarily increased, including a
st they do. the interest and amort
h. zation on the war debt. and il
impossible under any circumstance
81. for industry to proceed in IN
force because the rest Of the worl
e- is so desperately poor that 1t car
not take its normal proportion I
as our products
T., PThe situation which connron
the United States, and to an ev,
o~ greater degree every other count
which has bene at war. cannot
better stated than in the words
lg- Professor Niallate. OF France, wh