R.R. What's What

Leonor Fresnel Loree, shaggy railroad organizer, attended an Interstate Commerce Commission hearing at Dallas last week. There were 300 other railroad men and lawyers present at that hearing, but none of more importance than Mr. Loree. Indeed Mr. Loree was the prime cause of the hearing because, as chairman of both the Kansas City Southern and of the Missouri-Kansas-Texas (the "Katy") and the controlling interest of the St. Louis & Southwestern (the "Cotton Belt"), he is seeking to merge these lines, with approval of the I. C. C., into a southwestern Loree system which will strap the Great Lakes to the Gulf.

There has been stalwart opposition to this merger chiefly from owners of the short lines that now serve the territory Organizer Loree would integrate by his system. Most of these short lines are, frankly, no longer profitable, however much so they have been. Traffic is too inactive. But the communities they connect consider that they have a vested right in railroad transportation service, at no matter what losses to the operators.

For such situation, the shotgun prescription has been--keep all railroads operating; the I. C.C. guarantees a "fair return" of 5 3/4% on income to all; the I. C. C. must "foster and preserve in full vigor" the steam roads; profiting lines must yield parts of their over-earnings to bolster up their weak sister lines (Transportation Act of 1920). The 300 astute gentlemen at Dallas awaited Mr. Loree's blast at this transportation doctrine. He told them bluntly what was what.

He called the dinky, vicinal railroads whose earnings did not warrant their existence a "cancerous growth" on the U. S. transportation system. He advocated that 30,000 miles of lines (about one-ninth of the total U. S. mileage) be scrapped. In the southwest, in the region he would operate his system, 4,000 miles should be ripped up.* Where transportation, passenger or freight, was needed for isolated communities, motor trucks and buses could handle the traffic more economically and more profitably than could a skimped railroad, under present conditions.

Railroads have begun to make use of the motor industry, whose inroads on freight and passenger traffic railroad officials have regarded with more or less apathy. President Patrick E. Crowley of the New York Central told the Toledo (Ohio) Chamber of Commerce how great those inroads have been. Railroads operate over more than a quarter-million miles of track which they have had to lay down and maintain. Motors run over three million miles of roads supported by taxation. Some of the $360,000,000 of taxes ($1,000,000 a day) which U.S. railroads pay yearly go to maintain roads used by their transportation competitors. "Since 1914 some 20,000,000 motor vehicles have been brought into use. Measured in passenger miles, they are performing a much greater volume of passenger service than the railroads. It is estimated by our friends in the automobile industry that motor vehicles this year will produce close to 100,000,000,000 passenger-miles of transportation, as compared with 36,000,000,000 on railroad trains."

In this situation President Crowley sees benefit to the railroads. The public is habituated by motor cars to traveling. What railroads lose from short-haul traffic, they gain in the long haul. The Twentieth Century Limited yearly carried as many passengers as are booked first class on all the trans-atlantic steamers, and runs 2,000 sections a year.

* Sonken & Galamba, Kansas City scrap-iron millionaires, buy up abandoned western railroads, ship the rails to China. This procedure is more profitable to them than shipping junk to the glutted, low-price scrap markets of the eastern U. S.