Lower Fares

Most merchants know that when their goods will not sell, a sure way to move them is to cut prices. Sales of something the railroads sell--passenger transporta-tion--began to fall after the War and they kept right on falling until last year when they were 70% off from 1920. Untrained as merchants, railroadmen believed that the traffic they had lost to the automobile, airplane and bus was lost for good & all; fare-cutting would merely reduce what little passenger revenue they still had. Early this year President Whitefoord Russell Cole of Louisville & Nashville, a big, genial, iron-haired gentleman from Kentucky who is generally the voice of the Southern carriers, tested the ancient law of price-cutting. Passenger traffic spurted upward. Soon a few Western roads slashed fares. Great Northern announced that local passenger traffic jumped 50%. Meeting in Chicago last fortnight the Western Association of Railway Executives voted to cut all fares in the territory west of Chicago, St. Louis and New Orleans for a six-month trial period starting Dec. 1. The new fares on all trains: 1) basic one-way fare, 3-c- a mile against 3.6-c- previously; 2) round-trip tickets with more than a ten-day limit, 2-c- a mile. Optional with individual roads is a 2-c- rate for round trip with a ten-day limit and a straight 2 1/2 -c-a-mile one-way fare, good on day coaches only. The Pullman surcharge, an amount collected by the railroads equal to one-half the rate charged by Pullman, Inc., was abolished.

Railroader Cole's price-cutting experiment got no thunderous welcome among the Eastern carriers, to whom passenger traffic is vastly more important than it is to the Western roads. Pennsylvania. New York Central and New York, New Haven & Hartford alone carry 70% of all U. S. railroad passengers. A committee of Eastern rail officials, headed by Central's Frederick Ely Williamson, was formed to ponder fare-cutting, and Mr. Cole's Southeastern roads agreed to await a decision from Mr. Williamson before deciding what they as a group would do. Mr. William son's committee has been meeting in Manhattan off & on for the past month, has adjourned each time without announce ment. It is an open secret that Pennsy and Central are willing to compromise, but New Haven, which derives a bigger pro portion of its gross revenues from passen ger traffic than any other major U. S. road (38%), is flatly opposed to any & all fare-cutting. Observers believed last week that the Eastern roads might soon eliminate the Pullman surcharge and reduce the basic one-way fare to 3-c- a mile, but would hold the round-trip rate to at least 2-c-.

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