Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-06-17
RAILS SEEK RATE
INCREASE AT ONCE
I. C. C. Receives Petition for
! IS Per Cent Freight
Raise.
CONTINUED From First Page,)

ton declares.
Economic financing has been respon-
eible for the maintenance OF railroad
credit in the face OF adverse business,
the petition sets forth. and in relations
to the securities of the carriers u Is
insisted that they must be kept up, that
additional capital may be obtained 1or
further improvements.
The actual return of the Glass car
kiers from 192l-1930, inclusive, has been
roughly, $2.575 900 900 under the $40
per cent return prescribed by law, 1t is
brought out. For the first four months
of the year 1t is estimated at 2.24' per
cent
Taking up the question Of wages, pre-
kumably in anticipation OF any question
that might be raised as to the posi-
bility of cuts. the petition, outlines the
steps that would be necessary IN any
negotiations toward this end, and says:
"a conclusion OF; proceedings affecting
al classes of railway employees could not
be expected within u period which would
enable the result to be taken into con-
eideration in the present emergency.
Wages Would Stand.
Then it adds: Concerning the wis
dom of initiating such q controversy az
this time, it is assumed that there Will
be no substantial difference OF opinion.
The policy of the Federal Government,
concurred in by the homogeneous Oh
most leading industries, Is that the re-
vival of industry and commerce should
he predicated, for the time being at
least. upon the maintenance OF existing
wage scales.
because Of this policy and because of
the fact that even in the absence Oh
, such a policy the question OF railway
/ wages would require long period for
[ Ats disposal and because the condltlon
S<Aff eaP riArg does not admit OF StlC0
prolonged delay in the provision OF q
| remedy, the arrangements Of these car
sriers have not seriously considered at
this time initiating controversies looking
to the determination of the reasonable
ness of railway wages. They have con-
cluded that If that question must be
met and dealt with 1t must be at a
later stage"
Raising the issue Of passenger fares,
the carriers say that the rate, now gem
orally 36 cents mile, Is not susceptible
of a raise as 1.-The diSuSe OF railway ia
cilitieS by owners of automobiles and
the increase in the extent Of motor bus
service make it evident that passenger
traffic will not sustain further III
creases."
Nor do experiments that have been
made in reducing passenger fares lead
to the belief that cuts would stimulate
traffic. the petition says. To reduce
fare to cents a mile would, on the
basis of operations In 1880, exclusive
of communication receipts. mean loss
of Sl09, 800, 900 in gross passenger reVe-
nue.. it is said, and sit is impossible to
see where passenger traffic exists tribu-
tary to steam carriers which would
make up that deficiency,
Declaring that . substantial
amount" of freight trattic has been d.
Verted to trucks. the petition says that
&c u0cSihln tn reliable
estimate of the amount of railway
traffic which Is now subject to motor
truck competition under existing rail-
way freight rates. and still less Is 1t
possible to make reliable estimate OF
the extent to which any given increase
in railway freight rates would further
divert traffic from the railroads to this
form of transportation"
Competition now, 1t says, appears
Generally to be In haulS Of from $50 to
200 miles.
Short Haul Competition.
1.-THE rate structure of the steam car
fierS, it continues, is particularly want
ing in that fiexibility which would en-
able them to meet this competition.n
Heretofore. it amplifieS, the rule has
been to make rates relatively higher
dor short hauls. because terminal ex-
penses are constant and longer hauls
tend to absorb them.
This principle is embodied In the IN
eerstate commerce act, but the carriers
say lit is becoming probable that the
.$Ille of ratemaking hereafter should be
sEprecisely the opposite of this require
11nent If the steam carriers are to con-
stinue in a competitive position with
regard to short-haul transportation. It
Us probable that short-haul trafac
Should be treated somewhat as by
}product and that for the shorter dis
d. fI1 eIan h. olotft "
Blower and for the longer distances,
y.swhere the motor truck competition =
not effective, they should be relatively
higher.
= This would frequently result In
1 Through rates exceeding the sums OF
4$he local rates. In order to establish
such a rate structure q radical recon-
s1struction would have to be made and
do measure of relief from the provisions
FAof the law never heretofore contem-
sTplated would have to be granted by
*1e commission.
| Revision May Be Necessary.
J cit may also be that extensive
: changes in the classification of COM
j. 4nodities will be necessary. The pres
i ent classification. as revised from time
kfto time by the carriers and the COM
Emission, with the applicable rates, con-
%4Etitutes the most deliberately refined
AAcan be found in the economic structure
Spf American business. 1t has been, and
Mis-. vital factor In that economic
EEtructure. Consequently an extensive
Sakevision may be attended with far
f@Neaching consequences.
a. THE classification is based upon vari-
&pus factors, such as the value of the
sSarticle, its weight as compared with its
tNbulk, the risk of its transportation and
SAtfe competitive relationship of the ar
AlEicles in the various classes These fac
MSorS are much disregarded in the
Exchanges made by motor trucks, which
EsRre very largely made upon the basis
ESDf space.
IA This is merely partial statement OF
she problem OF truck composition. 1t
bandicates that the problem Is one OF
Hgreat completely and detail. 1t further
Mandicates that no program dealing COM
Ezprehensively with this feature of the
Mkituation can be worked out now. 1t Is
e4Wery probable that no comprehensive
Mprogram affecting all trafic competitive
with other forms of transportation can
tbe worked out at any enc time III the
aHuture, and that, OH the contrary, par
R$icular descriptions of traffic will have
10 be taken up from time to time"
~ The carriers ask that the rate increase
@ DE made effective by the issuance of
A2Dercentage supplements instead of the
adjudication of tariffs that would require
Wabout four months, and that 1t apply to
#hu freight rates and charges, including
sIoint rail and water rates and charges,
%Nwith such adjustments in the case of
Meoal, coke and other bulk commodities
mas will preserve existing differentials
Mhut which will not affect the principle
snvolved.
u Tt is further urged that the hearing