Evening star., 1931-06-17
RAILROADS DEMAND
Is PER CENT RAISE
IN RATES AT ONCE
/. c. c. Receives Petition to
Increase Annual Revenue
100000, 900.
CARRIERS MAINTAIN
SITUATION IS SERIOUS
Requested Relief Will Not Reach
Prescribed SIS Per Cent
Return, They Say.

The railroads of the United States
today laid their petition for is per
cent increase in freight rates before the
Interstate Commerce Commission, and
asked that it be granted as quickly as
possible to bolster their financial struc-
ture. &
The increase, If allowed, is estimated
to produce about $4OO, 100000 additional
revenue annually. The new level would
not shoot rates to a record height, ac-
cording to railroad officials. 1t IS de-
clared to be the only avenue OF RELIEF
open to the carriers, and, it is added
still will keep their return at less than
4 per cent, as compared with 5.7o pre-
scribed by the commission.
An exhaustive analysis of the flnan-
cial condition of the railroads is con-
tanned in the petition which comes 10
the commission through j. D.. FeHey'
chairman, special. committee OF preSl-
dents renresenting the Eastern group OF
raiIroads: H. M. Scandrett, chairman,
special committee of presidents repre-
senting the Western and Mountain-Fa-
cific groups, and w. N. Cole, chairman
special committee OF presidents repre-
senting the Southern group.
Wage Question Set Aside.
In this connection, it sets forth, the
question might be raised as to the rea-
sonableness of wages in view OF the
present situation, but that 1t Is not de-
sired to 60 into this matter, ootn on
account Of the length OF time tndO
necessarily would be involved In oeal-
ing with any wage cut, ana oecauSe Ilie ie
policy Of Government ana hnusMS JiS,eS -
that a business revival Is preolcCeo
right now on maintenance OF exStlns
scales. o..;,,o
The petition alos takes up, IN passing
the question of competition from trucks,
and suggests, significantly, tnat In.S
nrotlen will have to be dealt with IN
the future, and perhaps in way 'naC
will Junk the present rate 1anIlc oy
according preferential treatment Lor
short hauls, where motor competIIioiit
is stiffest, and revising classi1caClon u
commodities.
Tn a foreword to their petition the
carriers describe themselves as con-
fronted with an emergency threatening
serious impairment of their financial
resources and their capacity TO assure
the public a continuance OF elnclenU
and adequate service" z
Had Two Alternatives.
When business curtailment set in
late in 1929, the petition says, the roaos
had two alternatives. The first was
drastic retrenchment in operating and
capital expenditures in anticipation OF
n substantial decline in trafnc ana the
second a continuance Of the normal
program in anticipation OF the return
Of normal conditions.
The first line, it adds, was open 10
The criticism that it would tend 10 IN
Ransify the business depression by
khrowinp wage earners out of work and
DESTROYING their purchasing power ana
hitting at the market of those indus
tries producing railroad supplies. Fur
kI1er adverse reactions also would nave
been felt In other industries as the re-
suit of such a policy. it points out.
The second alternative, the petition
kays, was open to criticism from the
standpoint of economical management.
Nevertheless, 1t adds, this was the
nolicv adopted and adhered to as long
as possible. -.
In support of this, it Is pointed out,
The carriers made capital expenditures
approximating $498, 100000 in 1880 IN
the face Of declining traf1c and retained
in employment wage earners whose
services were not necessary.
Stock Prices Decline.
However, the petition continues, 1880
saw the return of Class carriers, which
takes in virtually every line in the coun-
try. reduced to 354 per cent. Market
prices of railway stocks declined and
srailway bonds began to be affected by
the approach of railway earnings toward
the point where the available income OF
the corporations would fail to meet the
relationship to fixed charges necessary
to render them marketable to insurance
companies, savings banks and trusts-a
relationship which has become an in
vestment standard by which the value
of railway bonds in all markets Is al
fected."
The result was that the roads sharply
cut their capital expenditures and fur
1oughed many thousands Of employees"
Just how greatly expenditures have
been reduced is shown in a comparative
statement for the past decade. The
average annual maintenance expense OF
the Glass / carriers from 1925-1929, In
elusive, were $2,076, 100000. For 1880
they we're $1,724, SOC, 900, and for the
FIRST four months of 1881 $478,S00, 600,
compared to $603, ,100,0 900 for the same
period last year.
Maintenance Deferred.
"It Is evident that these drastic econ
omies are creating deferred maintenance
in the properties of the carriers which
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