Montgomery County sentinel. [volume] (Rockville, Md.) 1855-1974, 1931-06-19
The Easiest Way.
Editorial in Baltimore Sun,

Editorial in Baltimore Sun.
Token as a whole, the railroads of the
country-which are the backbone of its
transportation system and the basis for
billions of dollars in securities held by thrift
establishments such as insurance compa-
| MES and savings banks-are admittedly in
bad way. Many of them are not earning
their fixed charges. let alone dividends on
their stocks. And there is no convincing
prospect that at the present railroad rate
level their troubles will soon be over.
Under such unhappy circumstances there
are three main alternatives by which the
railroads might obtain relief One is to
reduce operating costs. Another is to
secure cut in taxes, to which formida-
BILE share of railroad revenues 90. The
third is to obtain an upward revision of
rates. The first is, Of course, the popular
alternative, but the railroad managers
contend that operating costs have been cut
to the bone. short of slash in wages, which
they hold to be contrary to good business
or public policy. Some critics of the roads
challenge this contention, and argue that
there is large amount of waste in cir
cuitous hauling of freight, in duplication of
terminal facilities and in other competitive
endeavors which the roads might eliminate
through cooperation. The extent to which
this is true should become clearer in the
immediate future.
Turning to the other alternatives, there
arises against any effort to obtain tax
relief the plain fact that there is shortage
of revenues. both national and local, to
meet governmental commitments. Thus,
however desirable tax relief for the rail-
roads might be, the chances of getting it at
| the present juncture are virtually nil. This
leaves as the principal alternative avail
able to the railroads in relieving their
financial distress an upward revision of
| freight rates. That this is not viewed as a
particularly happy alternative by the man.
ayers is evidenced by the fact that in an
nouncing plan to petition the Interstate
Commerce Commission for a blanket in
crease of fifteen per cent. in rates, it is
stated the increase. if granted, will not be
applied uniformly because in some cases it
would divert traffic to competitive carriers.
such as truck lines.
Could the managers by some economic
legerdem ain devise means of setting their
financial house in order without resort to
general rate increase. the national interests
would be served. Certainly there could
scarcely be less desirable time at which
to inaugurate such an increase as is pro-
posed. The managers, however, contend
that this is impossible. that they are at the
end of their rope, and so they move to send
railroad rates up when prices generally
have been moving quite violently in the
opposite direction. And it seems likely
that the Interstate Commerce Commission
will have little, if any. veto power. The
railroads are not earning flair return
! upon fair valuation" of their property,
no matter which of the various clashing
theories of valuation is used. 1t is difficult
to see that the commission in Difference
to the law. can exercise decisive voice in
the proceedings.
What the commission can do. however,
is to illuminate more comprehensively than
it has chosen to do in the past the nature
Of the railroads difficulties and the wisdom
of the decision to seek relief by the alter
native of higher rates. Though that is the
easiest alternative with which the railroad
managers may meet difficulty of grave
national concern. the country would also
like to know that it is the best. Conceding
freely the difficulties under which the rail-
roads labor. the public would be well served
if the Interstate Commerce Commission
refused to follow a perfunctory policy in
this grave matter and, as the public's agent,
dug deeply into the essentials of the en-
tire situation Is there waste in operation