Transport: Freight Cars

Because two-thirds of the country’s rail mileage is being operated at a loss, Federal Transportation Coordinator Joseph Bartlett Eastman few months ago recommended a plan which, he claimed, would save the roads $100,000,000 annually. Key of the plan was that all rail merchandise services be pooled into two competing agencies of comparable traffic and financial strength, to be owned by two big groups of railroads. Mr. Eastman’s plan left the railroads cold. Even less enthusiasm greeted suggestions for pooling of U. S. freight cars. To this the industry objected hotly with cries of: “Impractical! Socialistic!”

Railroaders held that greater economy could be obtained by rigid application of existing freight car rules. Mr. Eastman countered with a charge that their attitude was one of “ostrichlike obliviousness to conditions.” Last week, following a visit to the White House by Mr. Eastman, President Roosevelt disclosed that, controversy or no controversy, one of the Administration’s prime recommendations this winter would probably be the pooling of freight cars for use of all lines.

In the U. S. are some 2,000,000 freight cars, worth $3,000,000,000. Under the existing system of freight car distribution, railroads cooperate with one another under rules of the Interstate Commerce Commission. Most important rule concerns what is known as the per diem rate for foreign cars. (A freight car on its home tracks is a system car; on another company’s tracks, a foreign car.) Railroads pay a per diem rate of $1 for every foreign car on their tracks. (The rate was 20¢ in 1902.) This money is paid as a “penalty” to the railroad owning the foreign car. Because there can be no equal balance of freight movement, and because railroads do not like idle cars lying in their freightyards at $1 per day, foreign cars are frequently snipped back empty to their home tracks.

To offset the tremendous empty mileage developed by this system, the American Railway Association ruled that each railroad should load idle foreign cars in preference to system cars destined for other tracks. Several railroads have “frozen” per diem agreements providing a fixed penalty period for foreign cars, usually from three to five days. Thus, foreign cars may be held, with a maximum penalty charge of $3 to $5 per car, pending such loading as may be in prospect. Empty hauls are thus substantially reduced.

Railroaders, led by big John Jeremiah Pelley, chief of the newly-formed Association of American Railroads, point to the additional expense of pooling as justification of the present system.