Evening star., 1949-11-20
Increased Charges
Lead to Reduction
in Business
n A E>~
BY Joseph A. Fox

The difference of opinion ex-
hibited within the Interstate Com
merce Commission over the ad-
visibility Of the 12k per cent
passenger fare increase which just
has been approved for railroads
in the Eastern and Pocahontas
regions. has drawn attention anew
to the trouble besetting this vital
segment of the Nation'S economy.
Freight rates are at levels ap-
preaching the record reached
right after World War I; passenger
fares in the East are above the
top of those days; in West and
South, the passenger-carrying
charges also have been hiked, and
gross income for this year is esti-
mated at $8,700, 600, ,000-a figure
exceeded only once in peacetime,
that for 1948 having been &c.
672 2,000,0 900.
But because of steadily mount
ing expenses In the face OF
dwindling traffic, the industry Is
struggling to make ends meet.
The business is to be had-rec-
ognizing, of course, that coal and
steel strikes have hurt badly-but
it is going to competitors, either
in commercial or private opera
ton. Out of this bleak picture,
the question that naturally arises
is just how far the carriers may
be moving toward pricing them
selves out of the market. Only
future development will provide a
definite answer.
Reductions Suggested
That issue was raised peril
nently in a vigorous dissent from
the six-man majority Of the COM
mission which approved the new
fare increase. Speaking also for
Commissioners Clyde B. Aitchison,
William E. Lee and Walter M. w.
Splawn, Chairman Charles D. Ma
hattie pointed to slumping traffic
volume and the inroads bus and
air lines are making on the rail-
roads. then added:
From the foregoing, 1t seems
apparent that, in addition to con-
tinued improvement in their pass
enger services. the time has ar
rived for these petitioners to ex-
pertinent with reduced fares rather
than with further increases. :.
In view of the present and pros
pective level of the national in
come. the future passenger market
of the country is more promising
than it has been at any time in the
past. The railroads can expect to
share reasonably in that market
only at fares which will attract an
increasing amount Of traffic. It
must be recognized that although
improvements in equipment and
service will continue to be helpful.
the controlling inducement to
traffic volume is the rate of fare.
Vacant seats rather than made
quate fares are the prime cause of
passenger deficits"
Chairman Mahaffie was direct
ing his remarks primarily to the
50-odd major lines east of the
Mississippi River and north Of the
Ohio and Potomac, who hope to
net about $37 300, 900 from the new
tariffs, and he was, of course, dis
cussing only passenger operation.
At the same time, the dissent
was hoisting a warning to the
southern and western lines which
also lost business after boosting
their charges some time ago.
They were not parties to the re-
cent proceeding.
Treadmill Routine
And the argument of the dis
senters has its bearing also on
the freight situation, for the rail-
roads admit that rate increases
in this field have diverted business
elsewhere. But they see no al
tentative to rate structure that
for the moment, at least, may
keep up with costs, That, pre-
sumably, was the theory, too, Of
the ICC majority in the passen-
ger case
The railroads have been travel