The Waterbury Democrat., 1931-06-25
NEA Service Writer


 Copyright, 1891, NEA Service. Incl Washington.-Enormous problems, affecting the future of the entire great system of American transpor- tation, continually beset the II mem- bers of the interstate commerce com- mission.
 Along with its continuous investi- gati0ns of rate structures and it's hearings on individual cases involv- ing rates on grain, cotton, coal, ce- ment, oil, vegetables. granite and all else that moves in freight cars over our 250,00O miles of railroad track and besides manifold other big and little jobs it does by act of congress, the I. c. c. must wrestle with such issues as thes4
 l. Request of the railroads for a general freigh trate increase of 15 per cent.
 2. Valuation of the railroads which Commissioner Clyde B. Aitch- ison describes as "the most stupend- ous piece of appraisal work which the world will probably ever know" concerning which there is a wealth of ideas in congress, among the car- riers and within the I. c. c. 4. Recapture = a congressional scheme so difficult to carry out that the commission has asked congress to relieve it of the necessity. 5. Competition on the highways "a threat to the railroads which led the commission to urge federal regulation of interstate bus transpor- tation.
 Now to outline these problems in little more detail:
 Sees Problems Ahead The last general rate increase was amounted to 35 or 40 per cent. In 1922 lhtes were reduced 10 per cent l and the railroads contend that the I. c. c. has been whiting them down | separately since. Meanwhile, the car | riers are hard hit, both by the busi- 1 ness depression and the increasing | competition of buses and trucks. The railroads say they earned return | of but 2.11 per cent in the first four months of this year and that a 15 per cent rate increase, amounting to about 10 per cent after. readjust- ments, would increase revenues about $400,000,00O and give them re- turn to per cent. They contend that the extra revenues would be spent largely for labor and materials and tha tthe rate increase would thus benefit the country at large. The I. C.. c. seems hardly likely to gran tthe IS per cent boost but, as the body regulating railroads and charged with extensive responsibilities, it finds a serious problem in the re- quests and the reasons behind it. Valuation Expense Initial valuation of the railroads under the LaFollette resolution was a job that lasted IA years. At one time the I. c. c. had 1750 men work ing on the job. It spent about ESQ., 000,000 on the work and the rail- roads are said to have spent three times as much checking the results. The reason for valuation was to find fair value on which rates might be based and the importance of the result to shippers and consumers may be seen in the fact that the railroads valued themselves at about $25, 5,000,00O,000 and the commission at only around $23,000, 100000. In the famous O'Fallon case the su- preme court held that the I. c. C.. in fixing a fair value, had given insuf- ficient weight to the factor of repro duction cost-that the railroads. that is. had not been given fair break. So the commission made a new att tempt to value the railroad proper ties. giving increased consideration to that factor in its decision order ing the Richmond Fredericksburg & Potomac railroad to turn sover nearly $90O,000 for the recapture fund. It is supposed that the rail- roads will take the R. r. & F. case or another like tito the court again. although the I. c. c. is esti- mated to have given reproduction cost from 50 to 60 per cent weight in the decision.
 Recapture Clause
 The recapture clause of the 1920 transportation act provided that half of railroads net income over 6 per cent be turned into Q contingent fund for loans to less prosperous roads and for surplus reserves. Re- capture Is bound up with valuations because the roads have contended that they were not fairly valued and hense were excessively charged for recapture. Hundreds of millions of dollars are involved in the dispute, but only about 10 millions have been paid Into the fund. The I. c. c. has recommended Co congress that the recapturc section be repealed. ex- piaining that endless litigation ig in. voivcd, that the benefits arc ques- tionablo and that equitable distri. button Of tho contingent fund aeem. na ly.. .. .nmnlhla Maa a s.s llA l& hnn waaA