Change of Heart

Franklin D. Roosevelt's "hold-the-line" order last week stiffened the spine of the oldest (56 years), mellowest independent Federal agency with regulatory powers. After ten months of needling from OPA, the Interstate Commerce Commission rescinded for the rest of 1943 the 4.8% freight-rate increase that it had granted the railroads last year. That increase had been granted to the railroads to ease their fiscal pain when they granted a 10% wage increase to railroad labor.

Freight-rate increases are indeed inflationary, since they result in pyramiding cost increases at every level of the economy, from raw material to ultimate consumer. Some railroads automatically howled at ICC's change of heart, but as a whole the carriers can well afford the $173 million cut in 1943 revenues. The U.S. Treasury had a neutral viewpoint: it will lose about as much in taxes as the U.S. Government, the railroads' No. 1 customer, will save on its freight bill.

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