Perth Amboy evening news., 1922-11-23

the railroads in a Vulnerable place.
Oncs more, they were set back.
Terminal facilities constitute an
other important angle OF the prob
lem. Industry in the United States
Eas a tendency to center about great
cities. Everybody tries to crowd in
together. This NEAR that tens of
thousands or cars of freight are all
being shipped to the same places
simultaneously. The inevitable re-
suit is congestion. Tracks and sid
Iings and loading and unloading ma
chinery are inadequate. The rail-
roads claim that they have lacked
the funds to make the desired i'm
~provementS.
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 80 high that even with the in
creased freight rates, the cost of
operating some railroads was in ex-
cess 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 students of the
'hdL TX NSSL 6ull VI PAI-
600, 600, 900 a year should be eX-
pended for from five to ten 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 rehabili-
tation.
A Limit to Rate Increases
Railroad rates canuot be increased
indefinitely. There is a rule of
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 ship
ments are made. Late in the year,
1920. hat point, was reached.
Prices of commodities went down
and rates stayed up. Shipments
larry in cases Of agricultural
products. the price which a COM
modify 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 If the freight cost of the
shipment would equal the whole
price obtained. The result was that
the farmer lost the sale and the rail-
road lost the traffic. Everybody
lost.
Since the rate increases of 1920
there has been some reduction of
railroad freight tariffs, but the
scale remains high above the pre-
again rapidly with renewed prosper
ity and Is bringing trouble. The
railroads are not equipped to handle
the increase. Car shortage and ter
minal congestion are developing Sc
riously along with the increased
traffic.
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
improvements when congress limits
the earning power. Secretary of the
Treasury Mellon has frankly x
pressed the opinion that there is
too much railroad regulation. He
has proposed what he terms a holi-
day for the railroads-that Is a
period of five years OR more in which
restrictive legislation will be largely
withdrawn from railroad operation,
permitting them to make as much
money as they can. He has pointed
cut that the course of railroad rates
was down.. as the result of compe-
ltition before the advent of federal
regulation, and that since the Inter
state Commerce Commission was es
tablished 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 it may be
that he will undertake to tell con-
gress how his holiday plan can be
carried into effect. At n rate
congress is about to tackle the prob
lem again and the country and thu
railroad companies mus await TN
res,,It1 Meantime, enough trains arr
running SO that one has to be care
fuI at crossings.