New Britain herald., 1924-01-17
SIX PER CENT IS
 NEEDED AS INCOME
Req Argues in Defense of Opera.
 ting Funds for Railroads

Philadelphia, Jan. 17.-Speakinf before the winter meeting of thu eastern division of the Chamber ot Commerce of the United State. President Samuel Req of the Penn. sylvania railroad system declared that if he were to attempt to sum UT in one sentence the steps necessary to be taken to have the transportation service of the country keep pace with industrial growth, he would say:
 Give the railroads adequate nei operating income by permitting them to earn, for a sustained period of time. at least six per cent return upon the property devoted to public service in the several districts or groups.
 Outlook Not Good
 If the railroads earn a return of only five per cent upon their prop erty investment in such year as 1923, with it's record breaking traffic how can they be expected to sustain their earning power in other years with lessened traffic? he asked. The answer is, he said, that they should be allowed to earn either a minimum of six per cent in all years or else greater returns in years of general prosperity.
 Mir. Rea said that four possible methods suggested themselves for ob- taining greater net operating income
 of the rate structure to yield larger revenues, lowering of labor costs, reduction of taxes, and greater efficiency in operation.
 Mitigation of our tax burdens is a very popular subject just now" said Mir. Rea. 'As a citizen, of course, I heartily approve Secretary Melons plan, yet there is little, if any, direct relief in it for the rail- roads, save what may be derived through the encouragement of gov ernment economies and larger of income, which citizens may be induced to invest in rail- roads,"
 Taxes Going Up
 Declaring that railroad taxes have been mounting dangerously for a long time" President Rea said they afford a startling reflection of the in the conduct of our federal, state and municipal affairs. and the stupendous cost of carrying on government and governmental projects in this country, largely en- couraged by the issuance of tax free securities.'
 "If the agricultural interests suc- ceed in getting as much publicity and support in favor Of re- duced taxes, as they have gotten for lower freight rates on some Of their own traffic." continued the railroad president, "I feel that we cannot be far from the peak Of taxation, and that relief is in sight"
 President Req also spoke on rail- toad consultations. He said he did rot believe that the interstate com merce commission. or any other conn mission. could successfully allocate all the railroads to certain systems with Inc underlying implication that so- called weak and strong roads must be united, or that traffic can or will stay In it's existing channels or that the new systems will continue 10 operate at the same cost or earn the same re- turns
 q hardly need add" Mir. Rea said. That we do not accede to the justice ,f compelling successful, well-man- tged conservatively financed systems 10 impair or jeopardize the results Of ikillful planning and painstaking fore tight. by being compelled to bear the burden of weaker. unsuccessful or im- properly planned lines. or those moi 'equired as part of the permanent system"