Bucket Passing

"This is no time for pussyfooting," declared blunt William M. Jeffers, new president of the Union Pacific Railroad Co. "There are only four or five Western railroads which are not in financial difficulties today, and individual railroads cannot stand alone. Unless revenues can be obtained so the railroads can be made to pay, the answer is perfectly obvious-- bankruptcy, complete breakdown of the system, Government operation."

These remarks by President Jeffers last week followed by only five days a decision of the Interstate Commerce Commission to raise railroad freight rates for certain commodities enough to give U. S. roads an estimated $47,500,000 more revenue a year (TIME, Nov. 1). This sum President Jeffers last week called "a drop in the bucket." With 200 other top U. S. railroad executives he presently sat down in Chicago to discuss passing the bucket to the I.C.C. once more. After two days' talk the conclave agreed to ask the I.C.C. for: 1) a flat 15% rise in general freight rates estimated to produce $459,500,000 a year in added revenue; 2) a 1/2-c-a mile rise in passenger coach fares to produce an additional $48,500,000 annually.

President John J. Pelley of the Association of American Railroads summarized the current gloom of railroaders by further plain speaking: "The margin between income and operating expenses has been so thin that the railroads face a real crisis. Because there is no other way to meet this crisis than to make a general increase in rates and fares, the railroads will ask the commission to expedite consideration of the matter. Facing the railroads today is an increase in operating costs totaling $663,303,000 annually since early in 1933. Of that amount, more than one-half results from new taxes under laws passed by Congress and from a 40% increase in the prices of materials and supplies and fuel which the railroads use. The rest is due to restoration in 1935 of the 10% wage deduction originally made in 1932 and to recent wage agreements with the operating and non-operating unions. . . . The average revenue per ton-mile and per passenger-mile has steadily declined since 1921, until today railroads haul a ton of freight one mile for an average of less than a cent and carry a passenger a mile for less than two cents."

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