Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-09-19
RAILROADS PRESENT RECORDS
IN PLEA FOR FREIGHT RAISE

ever. bring q change in sentiment to-
ward railroad credit and have the eff
feet Of continuing some railroad divi-
dends whose tenure is based primarily
on whether rates are increased or
ordered to remain at the present level
The brief OF the railroads makes q
strong point OF the record which they
are able to present in the way of a
contribution to the economic progress
Of the Nation" both after the period of
Federals control and In carrying on"
following the stock market panic in
1929, when they assumed the burden
OF large capital expenditures and held
to this program until it was apparent
that by so doing they were threatening
the safety of their securities.
Between the years 1928 and 1880, in
elusive, the railroads spent for additions
and betterments the net amount of S.
046, 000,0 900, or an annual average of
$625 100000. For 1890 they committed
themselves at the Washington confer
ence to expenditures between Is and so
per cent greater than this annual aver
age. From the stress of circumstances
they have been compelled this year to
reduce this figure materially. Railroad
executives now frankly state that un-
less rate relief is provided for them
their future annual expenditures for
additions and bettermentS will fall well
below $500, 00o, 900. Obviously. the suf-
fererS from this will be the industries
that thrive most when railroads are
making satisfactory net earnings.
Protection Clause Cited.
The brief stresses the clear intima-
ton in the transportation act which was
to provide reasonable protection to in
vestment in railroad property" There
is just basis for the contention on the
part of the carriers that the spirit of
the act has never been fulfilled by
Congress or by the commission and that
various inhibitions have limited the act
ua1 net return on property investment
from year to year to figure much be-
low the prescribed 534 per cent. Sta
tisticS presented show that in the first
six months Of 1881 freight earnings were
of Is per cent from the same period in
1880 and that passenger revenues had
decreased over % per cent. Continuing
these percentages Of decline through the
IL months, the net operating income for
the year will amount to only S553, 000,-
600, or 2.25 per cent on property invest
ment.
Going further, the brief points out
that If the freight revenue this year had
been increased Is per cent net operat-
Ing income would be $685., O0O,OOO, out
still only 4.01 per cent on property in
vestment compared with the 524 per
cent permitted in the transportation act.
Pooling arrangements that have been
suggested as panacea for the railroad
situation are rejected in the brief which
claims that this would produce an in
equality between those who would be
called upon to contribute most to the
pool and receive least and those who
would reap the largest benefits from it
and make the smallest sacrifices.
The brief also characterizes as unfair
the suggestion that there be a fiat in
crease in rates. On this basis it was
stated raw silk worth tens of thousands
of dollars per car load would take the
same amount Of increase as Stag, worth
a few hundred dollars per car load"
Under certain conditions it was also in
dicated that this type Of rate increase
would divert certain traffic to motor
truck transportation.
Copyright, 1917