At the Blackstone

In Chicago's tangled railroad yards last week was parked many an official private car while at the Blackstone Hotel was meeting the advisory committee of the Association of Railway Executives. Behind closed doors sat 24 potent railmen including Baltimore & Ohio's Willard, Milwaukee's Scandrett, North Western's Sargent, New Haven's Pelley, Union Pacific's Gray, Santa Fe's Storey, Southern Pacific's Holden, New York Central's Crowley, Illinois Central's Downs, Missouri Pacific's Baldwin. When the doors opened just before dinner, the rail executives came out of their meeting with an important agreement. The association was about to launch a united drive before the Interstate Commerce Commission for a general freight rate increase.

The 24 potent railmen declared an "emergency" existed in rail revenue. Adopted was a resolution ordering an immediate study of rate structures with a view to their upping as much as 10%, which would add $400,000,000 to the carriers' income. It was not planned, however, to revise all rates upward. In the South & Southwest they might be lowered to enable the lines to compete with trucks, gas and oil pipelines.

The railmen argued thus: Earnings have so declined as to endanger the three billion dollars in rail bonds held by insurance companies and savings banks; interest rates cannot be reduced; taxes are a fixed charge; supplies and equipment have already been cut to the bone; further economies, if necessary, will have to come in the form of deep wage cuts unless rates are increased to produce more revenue.

Recalled was the fact that the roads were allowed a blanket 40% rate increase at the height of the 1920 depression. Executives declared that this move helped break the post-War slump, that a similar increase now would do the same thing. In the last eleven years, they asserted, the I. C. C. with some 5,000 downward revisions, has whittled away most of the benefits of the 1920 increase.

During the Blackstone meeting, attorneys for 72 of the biggest railroads in the land appeared before a Federal court in Chicago, obtained a temporary injunction which restrained the I. C. C. from applying reduced freight rates to wheat. Ordered last year, this rate is being fought by the carriers as unreasonable.

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