Milford chronicle., 1931-10-23
RAILS RATE PLEA
DENIED; OFFERED
help ON BONDS
CContinued from First Page]


= ing to the fund and would not re
ceive anything from it, deriving
their added revenues from increase
collected on their lines.
The proposed schedule of increas
es would add So to the freight oil
each carload of coal, coke, iron ant
other mine products, lumber anC
other forest products, the various
miscellaneous commodities. II
/. would increase by Sc a car the rate
for crude petroleum, scrap iron ano
other products. Citrus fruits anC
certain fresh vegetables, oils, brick
and cement would pay an additional
one cent per 100 pounds and all
commodities not otherwise listed
two cents for 100 pounds. Switching
charges would be increased 10 per
cent.
"The advisability of pooling the
earnings resulting from any in
crease granted has been discussed
of record" said the commission in
I its opinion.
Assuming that the credit of the
railways is the prime reason for
this application, the suggestion has
merit. The standing of railroad OBJ
legations, and the consequent credit
of the carriers, even those enjoy ing
adequate earnings, will be imprOv-
ed if plan can be devised which
will give reasonable assurance that
fixed interest obligations, not now
in. default, can be protected gener-
ally from default"
Asserting that the railroads ap-
parently recognize that they cannot
expect a full fair return" the Com
mission said that ION the other hand
a smaller increase in the aggregate
: revenue, marshalled for the benefit
of. the carriers in need, will tend to
stabilize the industry"
I'VE shall provide for such mar
shalling," it, added.
*We do not find that we are justi-
i fled on this record to attempt by a
rate increase to protect the margin
of one an done-half times fixed
charges set by the New York law
(as approved investments for saw
ings banks and insurance compan-
ies). To provide so far as practi-
I cable that actual interest charges be
met is justified
tThe plan outlined we estimate,
will produce between one hundred
million and one hundred and TWEEN
ty@five million dollars increased rev.
enue on the basis of present traffic
r If applied both State and interstate. |
This should cover deficiencies in in /
tepest on fixed interest obligations |
with a substantial balance left over. !.
The above estimate does not include !
increases in revenue, which should !
accrue to the carriers during the !
coming year from the outstanding I
orders of the Commission which
have been mentioned above"
The commission directed the ca |
riers to work out a plan based ON
it's proposal and sticking exactly to !
the highly detailed division of COM
modities and increases. The plan
must be submitted by December 1
and is to remain in effect not long
ersthan March 81, 1888.
The commission took the rate
case under consideration September
so after two months of hearings and
arguments in all parts of the coun-
try 1t was filed on June II. The
opinion came after days of expec-
tant waiting. There was no dissent
ling opinion.
Whether President Hoover would
follow the decision with definite
steps to help railroad security hol-
deFs remains undisclosed. He has
been seeking a means to such an
end and conflicting reports are in
as to the progress made.
Hundreds of small savings banks
have invested in railroad bonds
which they cannot liquidate readily
because of their deprecated value. ,
The commission itself, in it's de-
cision, took note of suggestions for {
special board ito consider the
needs of the railroad situation" but !
dismissed the subject with a state !
ment that we have no authority" i
to act in that direction. .
The carriers plea, in which they :
were Joined by organizations of Sc
curity holders, including insurance n
companies and mutual savings I
banks was based on a need of lev- r
entes to meet fixed obligations, es- 8
peeially interested on their bonds +
and to keep these on the legal in 6
Yestment lists of New York and
other states. q
The railroads confined their evil +
dence to showing heavy decline in d
revenues. No evidence was offered O
with respect to rates on any partic-
ular commodity. Il
Security holders presented evil y
dence to show that the decline in t
revenues was threatening to wire
Sc, ,877 100000 worth of railroad n
bonds off the New York legal invest L
ment list. II also. was shown, the Ii
commission said that "tha shrinkage a
iii the marEet prices of railrnal Sc
.urnies impeTils the benei3ciaI ies nf II
trust funds and also the reserves of Il
financial institutions d
IN a manner tending to intensity the
present economic crisis. P
@The committees" Il continued s.
regard The maintenance of rail- N
road credit rs second IN importance o
,nIy to the maintenance Of peace
and order through governmenJ and G
Is essential to a return of normal il
economic conditions, railroad ser V
7ice being an indispensable public A
AGILITY affecting the entire ecOnOm- Ii
C life of the nation. They contend v