The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1937-12-16


=, said concerning
Face Crisis of modern civiliza-
ton and modern
business. Many times have we
heard how closely agriculture is re-
lated to other industry; how general
commerce and industry is interwov-
en- with every phase of our life.
There can be no doubt of this condi-
ton. No proof is required. Nor is it
necessary to argue that when one
section or segment of business is on
its sickbed, there is a resulting bad
reaction upon every other phase of
commerce and industry to greater
or less extent.
With these fundamentals in mind,
it becomes obvious that probably
the most important development of
a national character in the last few
weeks is the appeal of the country's
railroads for the right to increase
their rates by Is per cent. The de-
tails of their condition, as presented
in hearings before the interstate
commerce commission, show they
are confronted with a crisis. Since
they are under the rigid supervision
of the federal government, the fed
eral government is the doctor in
the case. They will live or die by
the command of the interstate COM
merce commission.
The case they have presented
shows, for example, that they have
had to cut thousands upon thousands
OF workers off of the payroll; that
they have been unable to buy more
than one third of the customary
annual purchases from other bust
nesses, and that more than one
fourth of all the railroad mileage in
the nation is now being operated as
bankrupt property-that is, the
property is in the hands of court
receivers.
So, adverting to the observations
of the first paragraph of this dis
cussion: a gigantic industry can not
run at loss without resulting in a
bad heart or partial paralysis in
other industry. Higher rates are
always opposed for the very human
reason that none of us enjoys taking
any more money out of our pocket
than we must. Many lines of bust
ness oppose rate increases on the
railroads because of the fear that it
will reduce their volume of sales.
But it occurs to me that in consid-
Grafton of question of freight rates
and charges which the railroads
make, we ought to think of their sit
uation as we do of other lines of
business. Our retail grocer is not
going to sell at loss; the druggist
can not Subsist unless he makes a
profit however small it may be, nor
is the farmer going to continue to
produce unless he gets a reasonable
return from his work. The only diff
ference between these and the rail-
roads is that the railroads can not
raise their rates unless the inter-
state commerce commission, gov
eminent agency, says they can do
so.
Further, there is tendency on
the part of goodly number of per-
sons throughout the land to question
the accuracy of statements made by
business. No doubt you have heard,
as l have, the remark that ''you
can't tell whether so-and-so's bust
ness is bad off or not. Big corpora
tons can cover up and make black
look like white" Indeed, while 1
was listening to one of the 1. c. C..
hearings in this case, a man in a
neighboring seat made something of
the same observation as l have
quoted. My answer to him was in
substance that none of the railroad
officials would dare lie to the COM
mission, even if they were so in
clined, because the commission has
access to every item of expense
and income, even all actions of the
management, of the carriers.
1t might be added in this con-
nection that officials of the inter-
state commerce commission under
stand there is to be a request by
the interstate truck operators for an
increase in rates if and when the
rail lines are allowed higher rates.
The trucks are represented as slow
ly starving to death-but they can't
and won't boost rates until their
competitors, the railroads, charge
more for their services.
believe there is no better way to
set forth the plight of the railroads,
~. as presented to
FIghf the commission,
of Carriers than to include
here some ex-
cerpts of the statement made Off
cially in the case by DR.. J. H. Par
melee. He is director of the bu-
reau of economics of the Associa-
ton of American Railroads and, as
such, knows the details.
To-day" DR.. Parmelee said, "the
carriers are reducing forces and are
curtailing their purchases of equip
ment, materials and supplies. They
are forced to do this because of the
financial condition in which they find
themselves. This retrenchment has
a serious economic effect on en-
ployment, on the manufacturers of
railway supplies and their employ
ees and on all business activity.
Such policy with its unwholesome
economic consequences only partial
ly offsets the rising tide of costs.
"The railroads in 1927 to 1880 in
stalled more than twelve times as
many locomotives each year, nearly
five times as many freight cars, laid
nearly three times as many tons of
rails and laid nearly twice as many