CARRIERS: When If Ever a Profit?

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> To rail labor, Congressionally represented by shrewd Senator Burt Wheeler, is conceded Washington's No. 1 lobby. Notorious is its ability to send bills crashing through in the last few days of a session; formidable is its veto of any bill to reduce the number of rail jobs available for its dues-paying members.

> Rail management, mostly flabby and bureaucratic, generally opposes any move to cut the number of management jobs.

> U. S. public opinion refuses to accept railroads as monopolies although, perversely, it approves having the Interstate Commerce Commission regulate them as such.

> Consolidations are also impractical because the big roads cannot agree among themselves on which of the little roads they will absorb. ICC, in its Consolidation Plan in 1929, compromised by agreeing to the creation of as many as 21 systems. Plans less influenced by political prudence advocate something more like nine systems; the most drastic one provides for just three systems.

Rates: Governed by no general rules, shrouded in metaphysical complexity are U. S. freight rates. No rhyme or reason explains why iron products move from Chicago to Los Angeles more cheaply than from Denver, which is roughly half the distance. There are countless parallel cases. High rates on less-than-carload freight originally invited the trucks into the business, which they are handling at lower rates than the roads can meet.

High freight rates on oil practically subsidized the pipelines.

An overdue rate row is being kicked up by husky moose-hunting Luther Mason Walter, operating trustee of Chicago Great Western, one of the chronically anemic roads in the great midwestern bankruptcy belt. Mr. Walter's complaint: the Midwestern roads are not getting their fair share of charges on transcontinental hauls, get a lean, unprofitable cut while the roads at the eastern and western ends take the big slices.

General is the agreement that more realistic capitalization, plus economies of consolidation, equipment modernization, would make important rate reductions possible & profitable.

Management: No more eloquent commentary on the alertness, competitive mindedness of U. S. rail management exists than the story of how they were caught asleep at the switch by the hard-hitting, aggressive, new transport men who came into bus & airline management, cutting deeply into the railroad's passenger business (which is roughly 15% of their total).

In 1916 U. S. railroads carried more than a billion passengers. Last year they carried less than half a billion. Much of the loss went into trips made by U. S. citizens in their own automobiles. But a big piece was lost to U. S. bus lines and a big reason for the loss was the failure of the railroads to provide up-to-date accommodations for day coach passengers soon enough or to charge competitive fares. In the 1938 recession eastern roads actually upped fares. Bus lines quickly placed orders for new equipment.