Wherefore, Petitioners Pray

With empty pockets ostentatiously turned out, and hats in their hands, the railroads called on the Interstate Commerce Commission last week. Humbly they asked for a 25% increase in freight rates. They also wanted to keep the 10% wartime boost in passenger rates.

Costs, said the Class i railroads, were postwar, freight rates prewar. Examples: prices for materials were up one-third, and will rise another $167 million this year. Wages, boosted 16-c- an hour last week for the roads' 1,300,000 workers, have increased almost 48% since Pearl Harbor. Without the rate increase, the roads said, they could not buy new equipment, like the vermilion-and-grey streamlined Pacemaker freight train (with panel smoke deflectors on the locomotive) which the New York Central is starting between New York and Niagara Falls. Nor could they avoid a loss this year of $345,000,000.

During the war the tremendous volume of rail traffic alone saved the roads' bacon, boosted revenue faster than operating costs. But last year traffic began to slacken, has fallen off so much this year that operating revenues will be 23% below 1945. In this crisis, the roads wanted the new rates effective on May 15, subject to later juggling by the Commission when more complete hearings are held. The proposed new rates would cost shippers another $625 million this year, would take the roads out of the red, give them a net income of $185,000,000.

Chances are that ICC will give the roads a freight rate increase, although not till after hearings. And it will probably be whittled down to somewhere around 18% to 20%. ICC will probably point out that the roads are not as badly off as they seem, because: 1) the railroads, hard hit by the wartime excess-profits tax, will get large refunds under the carryback if taxable earnings drop sharply; 2) fixed charges will be some $100 million less than in 1941; 3) railroad debt has been steadily reduced during the war years.

With this in mind, the Commission is expected to go slow on the biggest financial decision in its history.

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