Gratuity

ICC last week allowed the railroads to increase passenger fares by 10%, thus adding an estimated $45,000,000 to 1942 revenues, subtracting a like amount from the commuter-consumer's purse. Principal beneficiaries: the Pennsylvania, which stands to gain about $9 million; New York Central, $6.5 million; Southern Pacific, $3.1 million; New York, New Haven & Hartford, $3 million.

Without any increases at all, the roads are doing all right: net earnings for this year have already been guesstimated at 7 1/2% over last year's $500,000,000, itself by far the best railroad year since 1930. Thus the rate increase was chiefly a gratuitous contribution to inflation by ICC.

Passenger revenues, which make up only 10% of total rail income, do not pyramid the costs of other products as freight charges do. But if & when ICC grants higher freight rates (the roads are asking increases to yield additional revenue of some $300,000,000), ICC will rank with the farm bloc as assassins of price control.

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