The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1931-05-25
SPEEDY ACTION
is ORDERED TO
RAISE REVENUE
Method of Tariff Increase
May Be Left Up to
Commission.
S400,0O0,000 IS GOAL
Improvement of Credit May
Be Put Ahead of Bet
ter Service.
S400,00O,oOO IS GOAL

BIZ scupps-HoWard Newspaper Alliance
WASHINGTON, May 25.-Ex-
perts of eastern railroads are study
ing methods by which revenues can
be increased and will submit their
recommendations to a conference OF
railway executives this week-prob-
ably Friday or Saturday.
At this meeting a decision will be
reached on procedure to be fol-
lowed in applying to the interstate
commerce commission for author
ity to increase rates. Either of two
methods may be pursued, it was
learned today from railroad
spokesman.
1. The roads may designate a
group Of commodities on which they
believe rates could be increased
without reducing the volume Of
traffic or diverting any of it to
trucks, pipelines, or steamships,
3. The executives, after studying
the experts findings, may decide to
present all their data to the /. G. c.,
along with a letter pointing out the
acute need for revenue increase,
but leaving to the discretion of the
commission the method of produc-
ing this new revenue.
Action to Be Rushed
In either event it is planned to
submit the application with a min
inum of delay. Railroad eXecu-
tives have been assured that the
/. G. c., which usually proceeds
slowly during the summer, is pre-
pared to treat their petition as an
emergency matter and give it
right-of-way over other pending
applications.
Some executives are hopeful that
such increases as may be granted
will be made effective during the
quarter which begins July /, and
that the full effect of the increases
Will be applicable to earnings dur
ing the last quarter Of the year.
The railroads want to boost their
revenue by at least $400,OO0,0OO a
year. This is the annual loss they
now are suffering, it is said.
just what the roads would do with
the $400,000,000 in new revenue is
a. question that few of the execu4
tives are willing to answer in spe-
ciflc terms.
Credit or Service?
Their decision in New York last
week was to ask for a rate level
that would restore the credit end
the service of the carriers
Some railroad leaders maintain
that, as between "credit" and
service the latter would benefit
most, but this view is by no means
unanimous, for other executives
assert that the primary need is to
bolster credit, not service.
The pressing need is to protect
the railroads from impending
financial difficulties and insolven-
cies," it was asserted today by
President George P. NGcNear Jr. of
the Toledo, Peoria 81 Western.
Apparently the federal admin
istration opposes any reduction in
expenses, therefore increased reve-
nues offer the only solution.
Railroad facilities now are in
excess of requirements on account
of government subsidized waterway
and highway competition. The
railroads should strengthen their
credit rather than make unneceS-
sary expenditures.
Better in Long Run, He Says
while this may not stimulate in
dustry Immediately, it would bt far
better in the long run than the
course suggested. Unless the rail-
roads credit is improved, far
reaching and unfortunate situation
may develop, affecting shippers,
bank depositors, insurance policy
holders and the taxpayers at large,
which would postpone the country's
economic recovery"
President Daniel Willard of the
Baltimore 81 Ohio is keeping mem
bers Of the I. c. G. intimately post
ed on development Of the railroads
application. Willard, who enjoys
the friendship of most of the COM
missioners, has been acting as an
informal haison officer between the
commission and the other railway
presidents.
Sudden injection of the rate in
erase proiect into the railroad pic
ture has shunted into the back
ground the four-system consolida-
ton plan sponsored by President
Hoover, who hoped the merger
would bring lower, rather than
higher, rates to the public.
The consolidation has not been
abandoned, but the railroads evi-
IDENTIFY decided it would be too slow
a wsv out of their financial troubles.