Railroad Rates And Federal Regulation of Transportation

Report Outline
Position of the Railroads in Autnum of 1934
The Railroads' Plea for Higher Freight Rates
Financial Condition of Railroads in the Depression
Pension Law and the Emergency Transportation Act
Regulation of Competing Transportation Agencies
Special Focus

Position of the Railroads in Autnum of 1934

Hearings before the Interstate Commerce Commission on a petition of the railroads for authorization of higher freight rates are to begin October 1. Except for a temporary increase in the rates on certain commodities, effective from January 4, 1932, to September 30, 1933, and except for increases involved in revisions of so-called class rates—in the Southwest in 1928 and in eastern and western trunkline territory in 1931—no general freight-rate advances have been granted since 1920. On the contrary, charges for transportation of freight by rail have followed a declining course since that year.

An upturn in freight traffic in 1933 and the first half of 1934 tended to make less acute the financial stress experienced by the rail carriers, but in petitioning for higher freight rates they united in the view that the proposed increases were necessary to help meet higher wage and material costs and lift the threat of insolvency from a large number of important, railway systems. A substantial expansion of the volume of traffic was also termed essential in coping with the present financial problem. Since the beginning of the second half of 1934 the immediate outlook for the railroads has been darkened by a new decline in freight traffic, which has continued without check for nearly three months.

Formation of Association of American Railroads

As a means of better safeguarding their interests and better promoting solution of their common problems, railway executives voted at a meeting in Chicago on September 21, to consolidate in a single organization the activities of the American Railway Association and the Association of Railway Executives. John J. Pelley, president of the New York, New Haven & Hartford, was elected president of the new organization, which was named the Association of American Railroads. Reports that Pelley would make his position that of a railroad czar in opposition to Joseph B. Eastman, the Federal Coordinator of Transportation, were countered in railway circles by the assertion that the new association would work with, rather than against, Eastman. Support for this view was given in independent quarters, where it was held that Pelley's selection went far to insure the maximum of cooperation between the carriers and the Coordinator.