Evening star., 1933-04-15
INVESTORS AWAIT
RAIL RELIEF ACTION
Securities Reflect Uncer-
tainty Over Government
Program for Carriers.
Special Dispatch to The Star.

SpCSidl OASpAtSH W Inc oldE.
NEW YORK, April 15.-The slow
progress of the administrators rail-
road bill through Congress has had the
effect of taking the edge" of railroad
securities, for Wall Street had expected
that the measure would be announced
in detail this week and that its pro-
visions would have a stimulating effect
on stocks and bonds of the carriers.
1t is obvious that such a BILL In
order to be successful in the way of
reducing railroad costs, must contain
a number of radical changes in the
method of railroad operations. These
cannot be planned quickly. Once de-
cided upon they will be slow in taking
effect. The longer the subject is con-
sidered the greater is the skepticism
regarding the amount of savings that
can be effected without revolution
izing railroad practice as it exists today
and seriously curtailing the number OF
employees now in the pay of the trans
portation companies.
Prince Plan.
Discrepancies of large amounts are
to be found in the various estimates
of economies to be produced by a
system of coordination plus one of
consolidation. The Prince plan
claimed for it an annual saving of
about s750, 100000. Under a more rigid
scheme j. F. Loree recently stated that
the railroads should be able to cut
down their costs by $l,400 900 900 q
year. On the other hand, veterans in
the railroad service would be surprised
it,, under the authority of "co-
ordinator," economies amounting to
$100,000,000 a year would be brought
about. Even this, they claim, would be
at the sacrifice of much railroad
service to which shippers and the trav-
cling public have been educated and
which they would reluctantly abandon.
Last November the Western roads
engaged the services of "co-ordinator,"
whose business 1t was to attempt to re-
duce the amount of train mileage on
the railroads within his Jurisdiction.
1t was recognized that there was much
duplicate passenger service and that
many reviSionS could be made in freight
traffic that would not destroy the eff
cheney Of this throughout his territory.
He has just made report on the saw
1ngs that have been accomplished. The
amount is somewhat less than Sl,000,-
900. There is still considerable work
to be done, so this may not be fair
test of the 1abors of such an Official
1t suggests, however. that In order to
save 00,000,000 a year on all of the
railroads, their services to shippers and
to the passengers on their trains must
be cut to a point where it may tend
to drive business to other transporta-
ton agencies.
Coordination Is New Policy.
The principle upon which railroad
ing has been carried on during the past
generation Is that. inasmuch as rates
are legally fixed, new business can only
be produced by one line Offering a bet
ter service to its patrons than another
one. In other words, the essence of
successfuf railroading is competition.
The new philosophy is that competition
Is wasteful and has been carried to an
extravagant degree; that in place Of
competition there shall be its opposite,
or coordination, and that the element
Of service be minimized or abandoned.
While railroad men are willing in the
present emergency to accept this new
code and realize that it viii produce a
considerable amount of savings, Though
not nearly the sum estimated from 1t,
they do not subscribe to the idea that
it should be permanent. Their feeling is
that, carrying it to an extreme, it will
lead to such breakdown In service as
might compel Government ownership
Of the carriers.
.tCopyriRht. 1889