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On the grounds that the President's Emergency Board added nearly a million dollars a day to their wage bill (TIME, Dec. 8), 353 U.S. railroads last week petitioned ICC for a 10% increase in passenger and freight rates.* This would increase their revenues, they hoped, by $356,956,000 a year.

With net income at its highest in ten years the rails could pay the wage increase out of present earnings--by turning over to labor more than half the increase in their long-too-low profits (which were $359,700,000 for the first nine months of this year). But next year, with an absolute minimum of new equipment to handle wartime traffic, the rails may reach the point of diminishing returns, and their earnings may suffer.

Out of character leapt Alvin Ward Vogtle, Birmingham coal shipper who is also president of the National Association of Shippers Advisory Boards, to defend the railroads' action. Said he: "The increase should be not only liberal but generous...our very lives and freedom depend on the railroads....The railroads in the past two emergency years have done a better job than any other industry....There must be adequate revenue for property and service maintenance to provide for the highest degree of efficiency." He opposed a compromise suggestion--selective increases aimed at consumer and nonwar traffic--on the grounds that it would "unnecessarily complicate the freight rate structure and would lead to chaos as we enter the post-war period."

Leon Henderson, in character, opposed the increase as inflationary. He was particularly afraid of its effect on raw material and farm prices, where a 10% increase in freight costs may be pyramided on its way to the consumer.

Rate boosts in the past have demonstrated that they are not the prime answer to railroad financial problems. Too often the railroads have timed them to accentuate a fall in traffic (see chart). They always divert traffic to highway and waterway competitors, cause shippers to lie awake nights scheming ways of eliminating rail transportation.

In war, with all transport agencies overburdened, the rails may gain some immediate advantage from an increase. It will nevertheless cost them traffic later. A blanket increase falls heaviest on high-grade, high-rate freight and on long-distance shippers. The former is the most vulnerable part of railroad business, is best adapted to shipping by truck. The latter are the prime movers in a long-term threat to the railroads: the decentralization of industry toward its supply sources and markets, U.S. regional integration.

* Exceptions: extra fares and 1 1/4-c--per-mile fare for servicemen on furlough would be unchanged; coal, coke and ore rates would rise only a few cents per ton.

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