Evening star., 1937-12-11


that he does, namely, that the rail-
roads deserve an increase in rates in
order to make ends meet.
Mr.. Roosevelt's declaration to the
press that the last thing the Gov
ernment wants to do is to take over
the railroads is but another way of
saying that the I. c. c. has it in its
power to force the railroads into more
receiverShips or to compel the Govern
ment to come to the rescue of the
roads with loans and thus ultimately
to become the biggest single holder
of the railroad securities.
The President did not discuss with
the press the reasons for the plight
OF the railroads. He did not mention
the enormous increases in cost which
have narrowed the margin between re-
celpts ant expenditures and in many
cases forced the roads into red ink
These factors are increased labor
costs, increased prices that have to
be paid for materials bought and
higher taxes.
Rightly or wrongly, the railroads are
compelled by virtue of the National
Mediation Act to accept more and
more increases in labor costs or accept
condition of interruption of service
forced by strike. The present ad-
minlstration and other administrations
have always sympathized with the up
ward trend of wages for railroad work
ers. The railroads themselves have
felt that they were powerless to bar
gain for lower wages and have &C
cepted the upward trend as inevitabl
AS for the prices of materials and
equipment bought, here. too, the labor
charges forced by collective bargain
ing processes recently have gone up.
AS for taxes, the Government spend
ing policies have resulted in higher
taxes both in the Federal and State
fields where railroads pay taxes on
their properties.
Not Lower Standard.
Is the answer to revise downward
the costs to the railroads? Obviously.
in the face of an increasing cost of
living, the railroads cannot force a
lower standard upon their workmen.
The Government, on the other hand. |
has been spending money and forcing
taxes up because the economic system
has not absorbed the persons on relief.
The solution would seem to be in
giving businesses as whole a better
chance to function so that the unem-
ployed can be absorbed This means
that valuable timc has been lost in
the last three years by those expert
mental policies of the administration
that have impaired the sound under
pinning of the economic structure dur
ing the period of artificial or emer-
eency spending.
But there is another policy which
accounts direcly or indirectly for the
lack OF revenues 81 the railroads. 1t
is related to the volume of business
done Competent railroad economists
estimate that if the railroads were to-
day to carry the volume of freight
that they did in 1929 they wouM not
need the increase in freight rites |
which they now are desperately strug- |
cling to win from the Interstate Com |
merce Commission.
Foreign Trade Down.
Why did the railroads have a big !
volume in 1929 and why are they fully
20 per cent under that volume today?
The answer might be found in exam
lining the data as to how much of the |
freight carried in 1929 was for export |
when Americas foreign trade volume
amounted to about $4,000, 900 900. Our |
foreign trade is nowadays not even
half that sum, and it has been down |
To about a third during some years |
Of the depression.
1t might be asked also why Amer
ica's foreign trade is down to such a
low level. 1t will be recalled that in
1880 the Congress passed the Hawley-
Smoot tariff law, which was the high |
est protectionist law adopted in manv |
years Promptly the British common |
Wealths met at Ottawa and proclaimed
set of retaliatory tariffs. Many
American businesses began building
plants in Canada and other foreign
countries. America lost freight car
IoaomgS Dy the millions.
Since Secretary of State Cordeu
Hull began his policy of reciprocal
trade agreements, foreign trade has
slowly increased. Today the United
states Government is in the midst of
negotiations with Great Britain look
ing toward the making of a new reci-
procity treaty which in turn will affect
trade with all the British dominions.
Reduction of Barriers.
The railroads have interested them
selves in many questions but it is diff
flcult to find that any of their spokes-
men have said word publicly about
the Importance of increasing foreign
trade through reduction of tariff bar
rierS, removal of restrictions upon
monetary exchange quotas and other
impediments to volume of business
done in this country.
The President left the press more
or less puzzled as to what is to be the
next step if the I. c. c. should per-
chance not grant the increase. But
even If the increase is granted, what
is going to be done to bring an in
creased volume of freight for the rail-
roads? This ties in with the agitation
of business men for less burdens from
Government, tax burdens that destroy
confidence and interfere with incen-
tive. The problem of the railroads is
inseparably interviewer with the en-
tire industrial situation as it faces the
administration today. For when busi-
ness is bad freight decreases. More
than ever the lesson in the railroad
problem is the importance of making