Rate Report

In June 1936 Eastern railroads began selling passenger tickets at 2-c- a mile (after 16 years at 3.6-c-). Within a few months officials complained that the low fare was a losing proposition. Increase in traffic, they said, was not enough to compensate for the cut rate. After hearing them grumble for months, the Interstate Commerce Commission last July permitted them to hike their fares to 2 1/2-c- mile. This was expected to raise income about $32,000.000 (TIME, July 18).

By last week, earnings reports for August (first full month since the 25% boost took effect) made it plain that thus far the rate increase has helped the railroads as much as a rainy climate helps rheumatism. The Pennsylvania Railroad's passenger revenues fell 14% below August 1937, the New York Central's 17%, Baltimore & Ohio's 19.5%, the New York, New Haven & Hartford's 3%. All told, August was the Eastern railroads' worst month for passenger revenues this year.

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