Form P 24
ADDRESS
by
EDGAR E. CLARK
i»
Chairman, Interstate Commerce Commission
before the
RAILWAY BUSINESS ASSOCIATION
Waldorf-Astoria Hotel, New York
March 31, 1921
Introduction
President ALBA B. JOHNSON: At an early dinner of this Association,
one of the speakers was the Chairman of the Interstate Commerce Commission,
now an honored Justice of the United States Circuit Court, the Hon. Martin A.
Knapp, who,.when he was introduced, saluted us in these words: "Members
of the Society for the Prevention of Cruelty to Railroads." If he were here
tonight, he might address us as "Members of the Society for Improving the
Condition of the Poor."
Pretty much everybody belongs to that order now, and the Chairman of the
Interstate Commerce Commission is its President. Today in Washington, by
request of another speaker at one of our meetings, now President of the
United States, he has been conferring with the Chairman of the Railroad Labor
Board upon the financial embarrassment of the railroads.
. The change in line-up is almost equal to a political change which is said to
have occurred in Minnesota. In a certain year, all the Minnesota delegation in
Congress were Democrats but one, and that one was John Lind. Time passed,
and in another year the whole delegation was Republican but one, and that one
was John Lind. So does time change all things.
Do not think, however, that the Commissioner who is about to speak to us
is a convert. When the country adopted its present policy, it was the mountain
coming to Mahomet. Before he has said many words, you will see that his
attitude is no garment which he has put on to be in the latest style, but is a part
of him. We are keenly sensible of the great compliment which he has paid
us in coming from Washington to our meeting under circumstances so strenu¬
ous. Let us hope that for him and for the country this may prove the end of
a perfect day, and for us here his utterance will be the perfect end of our day.
Gentlemen, let me present Chairman Clark.
2
Chairman Clark's Address
MR. PRESIDENT AND GEN¬
TLEMEN: For some little
time past, in addition to my
other duties, I have been try¬
ing to answer to myself the query of
why I consented to come over here on
this occasion ; and I finally concluded
that it was because the invitation was
presented in person by the President
of this Association, who, by virtue of
the fact that he holds that office, must
be an expert in the sales line.
I intended to apologize for being
here at all. I arrived here late this
evening, and within ten minutes after
I had reached my room, the Secretary
of the Association, whom I assume to
be the efficiency expert, sent up a
printed copy of a speech which he said
I would be expected to deliver. Under
those circumstances, I shall have to
confine myself rather closely to the
manuscript so furnished.
VITAL INTERESTS
THE NAME of the Association
whose guests we are strikes me as
happily significant, because if there
has ever been a time in the history of
our country when we needed the ap¬
plication of business methods, adher¬
ence to business principles and earnest
thinking along sound business lines
the clock has struck that hour.
The vital material interests of our
people may be said to rest largely in
a limited number of institutions or in¬
dustries. As a country and as a
people we prospered and were happy
under them until the world was con¬
vulsed by the European war. We now
face the problem of restoring stable
and normal conditions. We will not
get back to pre-war prices for labor or
for commodities generally, but we
need and must reach stable and normal
conditions although they be on a
higher level of prices. It is for all
right-minded men to assist as un¬
selfishly as possible in restoring such
conditions and in bringing about re¬
covery from the evil after effects of
war, which always stirs up all that is
good and brave in some natures and
all that is bad and grasping in others.
As I have read and heard men talk in
recent days I have wondered if it is not
true that a large proportion of the
people have in some way become shell-
shocked or gassed even though they
did not participate in the hostilities.
PUBLIC SPIRITED SERVICE
THESE INSTITUTIONS or indus¬
tries need vigorous, industrious, un¬
selfish, thinking men who find their
greatest satisfaction in doing each his
part in building up and maintaining an
adequate and efficient system that
creditably serves the needs of the
times. The one who contributes his
efforts or his capital in any of these
lines is entitled to his reasonable com¬
pensation and reward. The one who
knows how and is willing to do is en¬
titled to encouragement, commenda¬
tion and co-operation from all others.
What I am trying to say is that none
of these great undertakings can
achieve a full or fair measure of suc¬
cess if those connected therewith are
interested only or mainly in getting the
largest possible personal benefit or
profit.
MAGNITUDE OF RAIL TRANSPORTA-
TION
I RECENTLY saw some statistics of
the railways in the various so-called
civilized countries of the world, al¬
though perhaps in the light of recent
3
events some would think that some of
those countries should be eliminated
from that category. The statistics
covered the railways of 30 countries
and of seven-eighths of the railroad
mileage of the world. The mileage
in the United States included in the
statistics was 259,705, that of the other
29 countries was 399,782, a total of
659,487. Of this total 429,726 miles
are privately owned. The statistics
were for the fiscal years which most
nearly coincided with the calendar
year 1916. They impress one with the
magnitude of the railroad industry,
and with the relative importance of it
in this and other countries in times of
peace.
The operating revenue of the roads
in the United States was $3,596,865,-
766 and the operating expenses
$2,357,398,412. For all of the roads
in the other 29 countries the operating
revenues were $4,419,772,742 and the
operating expenses $2,960,687,942.
During that year the railroads of the
United States carried 2,179,696,043
tons of freight while all of the roads
in the other 29 countries carried
1,696,169,344 tons. Thus it appears
that from a freight-carying standpoint
the railroads of the United States per¬
form more service than do those of
the remainder of the world.
OPERATING EXPENSES
THE DIFFICULTIES which, as an
effect of the war, have been encoun¬
tered here with regard to operating ex¬
penses and necessarily large increases
in rates and fares have similarly been
experienced in other countries. Infor¬
mation, so far as it is obtainable, indi¬
cates that the increases have not been
greater here than elsewhere, and that
our railroads emerged from the war
period in better physical condition
than those of most other countries.
The difficulties are not peculiar to our
t
land and are not the result of local
conditions or of details of manage¬
ment or operation. They result from
the operation of world-wide economic
forces which can not, under the condi¬
tions that have obtained, be controlled.
The relief must come gradually as a
result of readjustment of those eco¬
nomic forces. It will be accelerated
or retarded accordingly as we all meet
or shirk our duty to lend a willing help¬
ing hand.
As a measure of war necessity our
roads were operated by the govern¬
ment during the war. Conditions were
abnormal and it was imperative that
certain things be done and done
quickly. Cost was a secondary con¬
sideration. The experiences even
under abnormal conditions afford an
opportunity to study the advantages
and disadvantages of federal control
and operation. Whatever the net ex¬
penses to the government it was a part
of the cost of the war, and should, I
think, so be considered. We are inter¬
ested in those past experiences only as
they afford a guide for or warning
against future actions.
LOOKING FORWARD
THE PROBLEM now is to build for
the future. The country needs and
industry desires adequate, efficient
transportation services. Good service
and freedom from unjust discrimina¬
tion are of more importance than is
the precise level of the rates.
In considering the history of rail¬
road transportation some divide it into
chapters, each representing a period in
which the conditions in some respects
differed from those in other periods.
If, following our personal views as to
the periods or chapters, we were each
to write that history we would per¬
haps not agree as to the number of
chapters that we should write or the
exact differences that distinguish one
4
period from another, but we would all
arrive at the same point and at the
present time would confront the same
facts and conditions. Should we not,
therefore, concentrate our thoughts
and efforts upon the future with its
needs and requirements and urge and
assist in the expenditure of energy in
the direction of providing for those
needs and requirements ?
Regardless of where the ownership
of our transportation systems lies, re¬
gardless of whether it be one or many
corporations or even the government
that is in the last analysis responsible
for the operation and results there¬
from, railroads must be operated by
men. They must have the numerous
classes of employees, each performing
his particular kind of service. They
must have their directing heads and
their subordinate officials in the vari¬
ous departments. The degree of suc¬
cess attained must therefore depend in
large part upon the character, capacity
and loyalty of the officials and the em¬
ployees, and upon the general policy
under which, and the spirit in which,
they perform their duties.
TRANSPORTATION ACT
PROFITING by the experiences dur¬
ing the war, recognizing the force of
existing conditions, and looking into
the future the Congress enacted the
Transportation Act, 1920, which pre¬
sents in statutory form the present
policy of the government. In a
far sighted way it endeavored to
provide a governmental policy under
which the country would be as¬
sured of uninterrupted, efficient,
adequate railroad transportation at
reasonable rates, under which the em¬
ployees would be reasonably compen¬
sated, and under which the patrons
would pay what the service is fairly
worth. It may be doubted if many
have comprehended the extent to
which this Act projects itself and its
influences into the future. Too much
energy has been expended in criticizing
what at the moment, and from super¬
ficial thought, seemed to be weaknesses
in it and there has been too little dis¬
position to assist in laying the founda¬
tion for the superstructure which that
Act contemplates.
CONSOLIDATION
THE GOVERNMENT has practi¬
cally reversed the policy which it fol¬
lowed for many years of prohibiting
all combinations and consolidations
which could in any wise directly or in¬
directly reduce a maximum of compe¬
tition. In the past we have looked
askance and with fear upon monopo¬
lies. In this, as in all other things
affecting human welfare, there are ex¬
ceptions which go to prove the rule,
and the sound policy which will pro¬
duce the greatest good to the greatest
number lies somewhere between the
extremes. Science and human ingenu¬
ity have developed devices which have
come to be very important parts of our
business and social life. Some of them
seem to me to be natural monopolies.
Why should there be two or more tele¬
phone systems in a given community ?
A large strong railroad system made
up of main lines upon which the traffic
density is heavy and of numerous
feeder lines upon which much of that
traffic originates and finds destination
can and will afford better service at
less cost than could be furnished by
that same trackage divided into several
independent companies with all of
their rivalries and differences of view.
The government asserts the right to
regulate the railroads and that right is
not challenged. The country needs
strong, well equipped, well operated,
prosperous railroads. It is and must
be willing to pay what is reasonably
s
necessary to have that kind of service.
Why should it not be rendered by large
systems with their component parts
properly coordinated under a common
policy rather than by a substantial
number of weaker and, in some in¬
stances, impecunious systems, each
with its selfish interests and its sepa¬
rate organization striving to promote
those selfish interests? The new law
contemplates consolidation of the
roads into a limited number of large
systems under which every reasonable
degree of competition of service will
be preserved. I wish it were possible
to hope for consummation of that
purpose at an early date.
RATES NON-COMPETITIVE
FOR MANY YEARS the policy was
adhered to that there should be no
limit or restriction upon competition
between roads in the matter of rates.
Most of the freight transported by our
railroads will move along the line of
least resistance in the way of freight
charges. Our country is well supplied
with roads and in large part the traffic
is competitive. One railroad will not
permit its competitor to charge less
than it does on the competitive busi¬
ness and under the old policy that
competition was frequently carried to
ridiculous, if not ruinous, extremes.
From this cut-throat competition grew
a general feeling that the railroads'
business and their relationships to the
public were not governed by the same
code of morals that was recognized in
other directions. The business man
saw no wrong in accepting the secret
rebate. It was no sin to defraud a rail¬
way company. The parson's wife told,
with manifest self-satisfaction, of hav¬
ing successfully traveled on a ticket
that by its contract terms was good
only for passage of another. Hotel
men promoted conventions and expo¬
sitions and clamored for low railroad
fares so that they might fill their par¬
lors and halls with cots for which they
charged more than the ordinary prices
for rooms. Nearly everyone thought
that he should be the proud possessor
of a pass—and a surprisingly large
number attained that status. Freight
solicitors were instructed to get the
business and frequently got it at rates
that did not pay the cost of the service.
The poorer road can but hasten in¬
solvency by reducing its rates and it
can accelerate that haste by increasing
rates if its competitor does not also
increase rates. Competition in rates is
therefore but a figure of speech. As
a matter of fact railroads competing
for traffic must charge the same rates
and the only real competition is that
of service.
The Transportation Act changed the
policy of the government in this re¬
gard. Instead of prohibiting under
the penalties of the anti-trust laws any
efforts to equalize these conditions the
law now permits, as it should, pooling
of freights or facilities under terms
and conditions that are approved by
governmental authority.
WAR GUARANTY
CONGRESS dealt liberally with the
railroads that had been taken from the
possession of their owners as a war
measure. For something over two
years the government fixed the level
and conditions of expenditures and of
rates. The operating expenses were
increased in greater proportion than
were the rates and fares. Recogniz¬
ing this situation Congress provided,
for a period of 6 months following the
termination of federal control, certain
guaranties. It recognized that further
increases in rates were imperatively
necessary and it was contemplated that
within that guaranty period arrange¬
ments would be made to make such
increased rates effective. That policy
6
and purpose were carried out with the
result that rates and fares were placed
upon a higher plane than they had been
for many years. This fact, of course,
attracted the attention of all users of
our railroads. Too many of them,
however, directed their attention to the
charges for service and closed their
eyes to the increased operating ex¬
penses.
ROADS CAPACITY DEMONSTRATED
IMMEDIATELY following the ter¬
mination of federal control the rail¬
roads successfully moved a larger ton¬
nage than had ever been moved. The
capacity of the transportation machine
was demonstrated. Serious interfer¬
ence resulted from labor difficulties
and later the volume of traffic fell off
due to readjustment of industrial con¬
ditions. The financial results from
operation in recent months have been
disappointing. Grave, and no doubt
in many instances serious, losses have
been experienced by producers and dis¬
tributors. This has caused a good deal
of impatience which has taken the
form of demands for reductions in
transportation charges. The official
figures for the month of December
show that for the United States the
class I roads had an operating ratio
of 91.3. That means that the oper¬
ating cost of earning each dollar was
91.3 cents, and 8.7 cents of each dollar
were left with which to pay taxes, in¬
terest charges, and return upon prop¬
erty values. Obviously that margin is
too narrow.
MODERN CHARIOTEERS
AS MIGHT BE EXPECTED, sug¬
gested measures of relief are extreme
or moderate dependent upon the point
of view of the one who makes the sug¬
gestion. Phaeton, having been prom¬
ised by his father, Apollo, that any
wish that he might express should be
granted, demanded that he be per¬
mitted for one day to drive the chariot
of the sun. Unable to dissuade his
son and unwilling to break his promise
Apollo gave Phaeton careful instruc¬
tions and warnings and permitted him
to start. The last advice Apollo gave
was "Spare the whip and hold tight
the reins." Phaeton started but soon
found that he could neither control nor
guide the fiery steeds. They dashed
headlong and unrestrained into un¬
known regions, now high in the
heavens, now down almost to earth.
The earth was scorched and blackened
and was saved from destruction only
by Jupiter launching a lightning bolt
that struck Phaeton dead from the
chariot. Modern Phaetons now clamor
to be given permission to drive the
chariot of transportation by railroad.
Some years ago the question that
most interested the people was whether
or not we should have free and unlim¬
ited coinage of silver at a ratio of 16
to 1. That issue developed a multi¬
tude of men who believed themselves
to be financiers and who confidently
proffered plans or advice to solve all
of the then present and prospective
financial problems. One of these sat
by the cook stove for a time and sud¬
denly said to his wife: "I have figured
out a perfect plan for adjustment of
the government finances and a plan for
the future that will be free from em¬
barrassments," His wife replied :
"Good, I am glad of it. I hope that
you have also figured out a way to lift
the mortgage that has been a mill stone
about our necks ever since we came
here." We have now a similar crop of
similarly helpful financial advisers.
I knew a locomotive fireman who
had difficulty in keeping the water in
the boiler warm enough to shave with,
but who could see, day by day, that the
master mechanic and the suoerintend-
7
ent were making pretty nearly clear
scores of errors. Such men are now
in evidence.
REASON MUST PREVAIL
WHEN WE CONSIDER the cir¬
cumstances out of which present con¬
ditions grew is it not sensible and rea¬
sonable to recognize the necessity for
gradual readjustment of the economic
forces and affairs of the world as the
foundation for gradual improvement
in the situation we are discussing?
Some rates are too high to permit the
free movement of traffic. Some rates
are unreasonably low. Careful study
of such situations has been and is
going on and readjustments have been
and are being made accordingly.
Doubtless there have grown up oper¬
ating expenses, the aggregate of which
is substantial, which can not reason¬
ably be defended. They should be
eliminated. Every effort must be
made to insure all possible, attainable,
reasonable economies. The owners of
the properties may be obliged for a
time to accept less return upon their
investment than would otherwise be
expected. If reason can prevail and
a united, genuine effort can be put
forth and maintained, it is morally cer¬
tain that the situation will improve and
that we will progress toward that con¬
dition of affairs which the Congress
had in view, which the law contem¬
plates and which we all hope to see.
Slightly paraphrasing an expression I
read recently—"it is doubly incumbent
upon us in the stand which we take to
avoid the appearance of selfish shirk-
' - 99
ing.
We all know how large a part popu¬
lar impressions have in forming public
opinion and how long it takes for the
slowly developing proof of facts to
rectify such impressions when once
they have taken hold. We must
build upon the foundation of experi¬
ence and sound business judgment
that is free from "selfish shirking,"
and not upon the unstable ground of
theories and opinions that in large part
ignore the true facts.
NECESSARY PREFERENCES
SOME CRITICS assert that , the law
makes of the railroad business a pre¬
ferred business and confers upon the
owners special favors. Others assert
that it recognizes a preferred class of
labor.
Conceding that on the surface there
is that complexion, and assuming for
the purpose of the discussion, but not
admitting, that these preferences exist,
I ask, if this be so, is it wrong? If
this be so, why is it so? Congress
recognized, as did all thoughtful men,
that transportation is the life blood of
commerce and industry and vital to
the protection of our nation. It must
be provided in adequate and reason¬
ably efficient form. Continuous and
dependable operation of our transpor¬
tation machine is almost as important
as is its existence. The law was
formulated in the interest of the coun¬
try and of the public. The capital in¬
vested in, and the men who operate,
our transportation machine are em¬
ployed in serving the public which
must and should compensate both. If
it clearly appears that in order to give
the country the quantity, quality and
character of service that it needs, to
which it is entitled, and for which it
must pay, some preference, apparent
or real, should be afforded to the cap¬
ital and the men that are employed in
that service, I submit that such pref¬
erence is not undue so long as the pub¬
lic's right to reasonable and nondis¬
criminatory service and charges is
protected. But if that capital and
those men are recognized as having a
preferred status because of the public
s
character of the service in which they
are employed, those men and the own¬
ers of that capital must recognize an
obligation to the public which also
springs from the character of the ser¬
vice in which they are employed.
STATE JURISDICTION
RIVALRIES between individual
States and demonstrations of local
selfishness led the framers of the Con¬
stitution to vest in the federal govern¬
ment sole power to levy import and
export taxes, unrestrained powers as
to post offices and post roads and
plenary power to regulate commerce
among the States. The Supreme
Court has held that so long as the
Congress refrains from exercising
that power of regulation over com¬
merce among the States the several
States may exercise their powers, but
that when Congress has entered the
field conflicting State action must give
way. And so it has come about that
the federal law relating to safety
appliances, hours of service, and super¬
vision of capitalization of carriers are
supreme in their respective fields. In
the matter of regulation of rates and
fares the Congress has not gone so
far. It has contented itself with pro¬
viding that if the States shall require
rates or fares that unduly prefers
State traffic, unduly prejudice inter¬
state traffic, or unjustly discriminate
against interstate commerce, the fed¬
eral tribunal may and shall prescribe
rates or fares that will effect removal
of such preference, prejudice or dis¬
crimination, and that the carriers shall
observe rates or fares so prescribed
regardless of State requirements to the
contrary.
STATE DISCRIMINATIONS
LONG BEFORE the Transportation
Act was framed the Supreme Court
had made it entirely clear that the fed¬
eral Commission was clothed with
power and charged with the duty to
require removal of undue prejudice
against interstate shippers or localities
and undue preference of State ship¬
pers and localities. That principle of
law was accepted as sound and as set¬
tled. The Transportation Act retains
the condition that its provisions shall
not apply to transportation wholly
within one State. That provision is,
however, in a section the foundation
of which is that all rates, fares and
charges shall be just and reasonable.
In another section the Congress has
put in statutory form what was the law
before. It has made it a little more
explicit by specifically prohibiting un¬
just discrimination against interstate
commerce and has authorized a carrier
to complain of such discrimination.
The States are left free as they were
before to regulate the State charges
so long as they do not create undue
preference of State traffic, undue
prejudice against interstate traffic, or
unjust discrimination against inter¬
state commerce. The federal Commis¬
sion does not interpret the law as con¬
ferring upon it any regulatory powers
over the State rates or fares except for
the purpose of removing the prohib¬
ited preference, prejudice or discrim¬
ination. It has found it necessary in
several instances to exercise that
power, and appeals therefore have
been taken to the courts in various
jurisdictions. In so far as the courts
have spoken they have sustained the
power exercised. The underlying
question has been submitted to the
Supreme Court of the United States
and in due time will be by that body
set at rest.
FLUCTUATION OF RATES
ONE WHO IS NOT VERSED in
transportation charges and their effect
9
can not appreciate the extent to which
changes are necessary due to con¬
stantly changing commercial and indus¬
trial conditions and to competitive re¬
lationship between carriers and be¬
tween communities and commodities.
It is neither necessary nor desirable
that the States shall be shorn of power
to regulate their internal affairs. The
same considerations that led the
framers of the Constitution to reserve
to the federal government the powers
to which I have referred require re¬
tention and exercise of those powers
within reasonable and appropriate
limits. If a State has the right to re¬
quire the railroads traversing it to
serve the citizens of that State at
lower charges than they contempora¬
neously assess against the citizens of
other States, the effect would be
the same as if that State were to levy
a tax upon outsiders for the privilege
of transporting goods into the State.
When the Supreme Court shall have
spoken and these controversies have
been stilled it will, I predict, be found
that in principle and substance the law
is not materially different now from
what it was when that court decided
the Shreveport case. When that clari¬
fication of the law shall have occurred
there will, I think, be no serious diffi¬
culties about the exercise by the fed¬
eral and State regulating bodies of
their respective powers in their respec¬
tive fields.
LOCAL SELF-GOVERNMENT
I WOULD NOT UNDULY central¬
ize power and control. I like to think
of the United States as a single entity,
and the experiences through which we
have just passed have emphasized
more strongly than ever before the fact
that among the nations of the world
we must be so considered and must so
consider ourselves. At the same time
in the conduct of our domestic affairs
we can and should adhere as far as is
practicable to the ideas of self-gov¬
ernment and local government, reserv¬
ing, however, certain fundamentals for
control and administration by the na¬
tional government.
The growth of civilization has been
accompanied at every step by the main¬
tenance and exercise of the police
power. Peaceful possession of prop¬
erty and safety to life could not other¬
wise exist. The police power must
extend as far as civilization and
human rights extend. The limits
of the jurisdiction of the various
police powers must be clearly defined
and properly recognized, and that
after all is the real question in the con¬
troversies to which I have just re¬
ferred.
A PUBLIC SERVICE
THE PUBLIC UTILITY has de¬
voted itself to the service of the public.
It has accepted the grant of unusual
powers which could be accorded only
by the state. The definition which
recognizes the rights conferred on the
utility and the propriety of regulating
it does not at all warrant the conclu¬
sion that its affairs can be successfully
conducted with a disregard to those
sound methods that are essential in
private business. In these matters the
important thing is that those who own,
manage and operate the public utility,
those who legislate regarding it, those
who are charged with the duty of reg¬
ulating it, and those who are served by
it should appreciate that in the con¬
duct, regulation, or use of it none but
honest business principles and meth¬
ods should be considered or applied.
It is not alone in what might be
called minor matters of competition
and charges that changes which affect
transportation problems in substantial
10
degree come with frequency and rapid¬
ity. These changes, some of them
almost fundamental, must be taken
into account along with arrangements
for caring for the steadily and continu¬
ously growing population and traffic.
WATER AND HIGHWAY LINES
DURING THE WAR expenses of
operation on vessels increased more
than they did on railroads. There was
a heavy demand for ships in overseas
traffic and transportation by rail and
water became more expensive than by
rail. The currents of traffic were
markedly affected thereby. In the light
of the experiences of generations it
can not be expected that water trans¬
portation will long remain on a higher
level of cost than transportation by
land. There is now an abundance of
ships and no one can predict the ex¬
tent to which they will be employed
in direct competition with our rail¬
roads' or the extent to which that
competition will necessitate readjust¬
ment of the affairs of the railroads.
The development of the automobile
and the auto truck and the building of
good roads have made possible trans¬
portation for comparatively short dis¬
tances by that means in sharp competi¬
tion with the railroads. During the
war the utilization of that and other
methods of transportation was urged
in an attempt to relieve the railroads
in their efforts to move the tremendous
volume of traffic which was offered.
Now freight is moving in substantial
quantities in that manner instead of by
railroads. In many instances it is
doubtless the cheaper method of trans¬
portation. The State furnishes and
maintains the right of way and track.
These conditions are not peculiar
to our country. They have grown up
and the same problems are presented
in European countries. According to
a recent consular report the subject of
the extent in Great Britain of the use
of motor trucks in place of railroads
has assumed such importance that the
Ministry of Transport has appointed
a committee to inquire into the advisa¬
bility of granting power to the rail¬
roads to institute such services, and to
what extent, if any, such power should
be granted. Studies in this connec¬
tion in England point out that the ad¬
vantages which the railroads formerly
had in the matter of speed, carrying
capacity and cheapness of movement
no longer exist. Speed has in a sub¬
stantial part been sacrificed and rail¬
road rates have risen while the me¬
chanical advantage has been and is be¬
ing neutralized. It is said to be a
serious problem for the railroads of
Great Britain under present conditions
to discover means to survive unless
they are completely reorganized. The
increased freight and passenger
charges are said to be having an effect
contrary to that looked for, namely,
greater revenue, and that income is
falling while expenditures show no
signs of decreasing.
Studies of the cost of building and
maintaining roads and of appropriate
taxation of motor trucks using such
roads are being prosecuted. Some ob¬
ject to authorizing the railroads to in¬
augurate motor truck transportation
for fear that after competition of other
trucks had been overcome the railroads
might withdraw their service, thus
forcing all of the traffic back on to
the railroads. They also point out that
during the last railroad strike in Eng¬
land the country was largely dependent
upon motor trucks for transportation,
and that if the motor service were
operated by the railroads it would be
involved in such a strike and the peo¬
ple be left without the advantage which
they derived from it during the last
il
strike. They also argue that it would
be inadvisable from the standpoint of
industry because if the railroads em¬
barked in that undertaking they would
probably transfer the manufacture of
trucks to their own workshops, thus
affecting the motor truck industry in
an appreciable degree.
FUTURE SCIENTIFIC ADVANCE
NO ONE can confidently predict what
the effect of the solution of these prob¬
lems may be upon questions which we
perhaps now consider as settled. New
problems will arise, and so with con¬
tinuous changes in the affairs of men,
of business and of nations there is an
ever present necessity for changes in
the facilities and machines through
and by means of which transportation
is conducted. No one can now see
clearly the extent to which electricity
will be substituted on our railroads for
steam power, and no one can now see
what the effect of such substitution
will be,
NO GENERAL RATE REDUCTION
IT IS NO TIME for stubborn think¬
ing, but it is a time to think of facts,
which are said to be stubborn things.
The whole country and all of our
people, excepting those who are and
have been shamelessly profiteering, are
suffering the after effects of a titanic
war. In some places the agriculturist
and the horticulturist are leaving their
crops to decay in the fields and on the
trees because they can not sell them at
prices that more than cover the costs
of harvesting, transporting, and mar¬
keting, and yet the housekeeper pur¬
chasing for the home table finds the
cost of such commodities close to what
it was during the active hostilities.
In some quarters zealous efforts are
made to have it appear that this situa¬
tions is in large part or in the main due
to high freight rates. The freight rates
are high. I have yet to meet a well
informed man who does not feel that
as a general thing they can be made
no higher as a revenue measure.
Careful inquiry into some distressing
situations discloses that the utilization
of products is prevented, not by
freight rates, but by economic condi¬
tions and perhaps manipulated mar¬
kets. In November, 1920, the average
ton-mile revenue of the railroads of
the United States was 75.7% higher
than in 1913. At the same time the
wholesale prices of commodities that
are transported in large quantities
averaged 107% higher than in 1913,
and in May, 1920, they were 172%
over 1913. Reference has been made
to operating costs of the railroads.
Until the foundation has been laid for
widening the margin between the
revenue and the cost of earning it, it
is difficult to find justification for an
attempt at a general reduction in rates.
OPTIMISM
I DESIRE to make it clear that al¬
though I have referred to some of the
troublesome problems I am still an
optimist and not pessimistic on this
subject. We all must suffer in vary¬
ing degrees under the conditions which
obtain in the world and affect our
country, but we should not lose sight
of the fact that those conditions bear
upon us with less severity than they do
on most people ; that we have recuper¬
ative powers which far exceed those of
any other nation, and if we can have
a co-operative spirit along right lines
and recognition of the difficulties and
the rights of others, and an earnest
effort to bring about at the earliest date
those conditions which we would like
to have obtain we will soon be looking
upon the troubles of the present day
as troubles of the past, and will find
our country as well as ourselves in a
12
better position, a better condition and
a better frame of mind and with more
lofty resolves for the future than we
had before.
Two frogs once fell into a can of
milk. They swam around and around,
and around, and could find no means
of exit. One of them said, "Oh, dear,
we are lost; we will never get out of
here." The other one said, "You can't
tell; keep kicking, you don't know
what will happen." The next morning
some person went to the can of milk,
and thère was one frog lying floating
dead on his back, and the other was
riding around on a ball of butter.
REQUESTS FOR COPIES
of this address will be welcome from all
those desiring to place it in the hands
of their representatives or friends.
Copies furnished or sent direct to lists
upon application to Frank W. Noxon,
Secretary Railway Business Associa¬
tion, Liberty Building, Philadelphia.
13