Evening star., 1937-09-25
Cites Important Problem
OF American Railroads
To the Editor Of The Star:

To the Editor OF The Star:
The article in The Sunday Star set
ting forth reasons for collapse of the
stock market after Labor day appears
to have overlooked an important angle
which is in no way related to war scares,
but which is vital to the welfare of the
public, and deserves the careful con-
sideration of all thinking persons. That
is the American railroad problem.
Last year the industry as a whole was
supposed to have emerged from the de-
preston. with net income of roughly
s164 100000. Yet 38 per cent of the
total mileage had no net income at all,
while 80 per cent figured on ways and
means of lifting themselves out of bank
ruptcy. But for the year 1887 the picture
is considerably darker First of all, the
loss of emergency freight rates cost
$4,000 600. Social security taxes and
pension costs will total $50 ,0000 900. In
creased costs of raw materials will add
another $685. 100000, while wage in
creases for incorporating unions effec-
tive from August will, by the end of the
year. have cost an extra SAL 900, 900. That
is some $375, 100000. and would require
80 per cent expansion in traffic to over
come this extra burden and turn in net
income equal to 1886, according to rail-
road officials. But, alas, that isn't all.
Operating brotherhoods want 20 per
cent wage increases or they say they
will go out on strike. That would add
another $l16 ,000,0 900. 1t is believed bank
rupty for all save a very few railroads
would follow if such demands were
granted, and in view of the fact that
most of them carry heavy insurance,
and that the insurance companies, in
turn, are heavy investors in railroad
bonds, it can scarcely be described as
charity toward the widow, to say the
least. They demand, also, "full-crew
laws" And Congress wants 70-car
train limit law, which will cost roughly
$98000,000. 1t has already passed the
Senate This is an additional rail-
road burden of $591 ,000, 900. However,
the railroads have refused the demands
of the brotherhoods, and the case is
expected to be put before the people
shortly by fact finding commission
appointed by the President Of the United
States.
The public may not be interested in
these figures now. But let no one be
deceived This problem will have a
direct bearing on the cost of living in
1900 ElGIlCl OllC VI tWO oCCLAo
highly probable. The railroads will be-
come public property and be operated
by Federal Government, or there will
be increased freight rates, and possibly
higher travel rates. In the event of
Federal ownership, there would be loss
of tax revenues for support of both
politicians and schools. There would
probably be deficits to be made up by
additional taxes here and there, who
knows how or where?
War scares may be partly to blame
for collapse of the stock market, but the
plight of the Nations No. consumers,
the steam carriers, cannot be overlooked,
nor can any one be sure that failure to
solve their problems will not lead into a
depression of even more devastating
consequences than the one popularity
supposed to have just ended, in spite of
all money-juggling schemes of the pres
ent or future administrations.
E. H. ALEXANDER.