Evening Republican, Volume 59, Number 63, Rensselaer, Jasper County, 5 April 1917 — AS PRICES RISE HIGH COST OF LIVING HITS THE RAILROADS [ARTICLE]

AS PRICES RISE HIGH COST OF LIVING HITS THE RAILROADS

Service Will Be Crippled Unless Relief Comes Soon. EXPENSES UP, RATES DOWN Wasteful and Conflicting Regulations Hamper Railroad Credit, While Advance In Labor and Materials Outstrip* Revenue*, Chairman Krutt•chnitt Tell* Con'g'rdss Committee. Unified Federal Control Will Improve Condition*. Washington, April 2.— The condition in wbicb the railroads find themselves as a result of constant Increases in wages, prices of material, taxes and other expenses, while their revenues are restricted by legislation, was strik ingly described by Julius Krutts hnitt, Chairman of the Executive Committee of the Southern Pacific Company. In his testimony during the past few days before the Joint Congressional Committee on Interstate Commerce, which is making a study of the question of railroad regulation. Mr. Kruttschnitt urged the committee to recommend a plan of regulation which will center responsibility for regulation and its results In the federal government, so that conditions affecting both expenses and revenues may be made subject to a uniform policy instead of the waste ful and often conflicting policies in volved in the system of combined state and federal regulation. Why Road* Need More Money.

a bearing on the reasons for the appliof the roads to the Interstate Commerce Commission for a general advance In freight rates. He showed that while the price of transportation has declined in recent years, the cost of producing transportation, like the cost of almost everything else, has rapidly advanced. This he illustrated by showing that If freight and passenger rates had increased during the past twenty years In the same proportion as average commodity prices the railroads Of the United States would have re celved $1,654,000,000 more for trans portatlon tn 1915 than they did receive This saving to the public was effect ed, in spite of an increase of 93 per cent in the cost of operation of trains, by a reduction in the average passen ger rate per mile from 2.04 cents in 1895 to 1.98 cents In 1915, a decrease of 8 per cent, and by a reduction in the average freight rate per ton mile from 8.39 mills in 1895 to 7.3 mills in 1915, or 18 per cent. During the same period the cost of operation per train mile rose from 92 cents to $1.78, almost doubling. At the same time the aver age price of 346 commodities enumer ated in a bulletin of the Department oi Agriculture increased 115 per cent 'Transportation is practically the only commodity in general use that has not increased tremendously in price during the past twenty years, freight and pas senger charges being lower than they were twenty years ago. Big Saving to Public. / If rates had risen proportionately to the increase in the cost of other articles of ordinary use, Mr. Kruttschnitt told the committee, the average pas senger rate in 1915 would have been 2.95 cents a mile, or 50 per cent higher than it was, and the average freight rate would have been 1.21 cents, or 66 per cent higher than it was. The saving to the public in passenger fares through this difference was $314,000, 000 and ln freight rates $1,340,000,000. Universal railroad bankruptcy under reduction in rates and increased cost of operation, he said, was avoided only by heavy expenditures to obtain Increased efficiency in train movement, making it possible to haul more tons of freight per locomotive. This had reduced the average cost of hauling a ton of freight, but the decline in the average freight rate had reduced the " nef revenue of the roads from each ton hauled. If the operating costs-of the railroads, including the prices of coal, labor and material, continue to advance at the present rate a lot of railroads will be in the hands of receivers by 1918 unless some relief is afforded. Mr. Kruttschnitt told the committee. “Owing t< the rise of commodity prices,” be said, “the purchasing power Of the dollar has fallen 55 per < ent and the railroads are in the position of being compelled by law to accept payment for their service to the public in currency worth 45 cents on the dollar. Public’s Chief Interest. -

“The public’s greatest Interest is in adequate transportation facilities and nofe»eo much in low rates. As to most commodities freight Etttes form a very small proportion of their cost Excluding low grade commodities, the percentage of the freight rate to the cost is so slight as to offer no justification for any substantial increase in prices to the consumer. It may be stated with little fear of contradiction that the consumer seldom, if ever, profits from a lowering Of freight rates. —“Kx torr ion ate charges are a thing of the past, and under the attempt to ent the Interest of the whole public in the character and standard of trnhsporta2HohTs subordinated to the Interest of that part of the public only that profits by lower rates—that is to say, the shippers and their agents and not the gen era! public, the ultimate consumer.”.*