The Farmers and the Railroads 
Face Exactly the Same Problem 
The farmer has a real problem. The prices of all his products have declined 
much more than the prices of the things he must buy. 
The RAILWAYS HAVE EXACTLY THE SAME PROBLEM. Whilerates 
have been advanced, expenses have increased NEARLY TWICE AS MUCH. 
What has happened to the 
Railroads since 1916 
Increase in Revenue 
Increase in Expenses 
60 % 
110 % 
High Costs Make High Railway Rates 
Passenger rates are about 50 PER CENT 
HIGHER and freight rates ABOUT 74 PER 
CENT HIGHER than in 1916. That sounds 
as though the railways should be making 
money. 
BUT the prices the railways are paying for— 
Materials and supplies are 65 per cent, 
higher; 
Taxes are 90 per cent higher; 
Coal is 160 per cent higher; and 
Wages of railway employees per hour are 124 
per cent higher. 
THESE ARE THE REASONS WHY 
RATES ARE HIGH. RATES CANNOT BE 
REDUCED until the cost of these things 
can be brought down. 
The things mentioned—materials and sup¬ 
plies, taxes, fuel and labor—have been costing 
from 90 cents to 100 cents out of every dollar 
the railways have been receiving. 
Present Railway Rates Are Caused By 
Labor Cost, Not By Return On Capital 
Existing railway rates are higher not be¬ 
cause railroad CAPITAL is seeking a larger 
return, but because railroad LABOR and labor 
producing things railroads must buy is getting 
so much more than formerly. 
While total revenue of the railways is now 
60 per cent greater than in 1916, THEIR EX¬ 
PENSES ARE 110 PER CENT GREATER, 
AND THEIR profit has been more than CUT 
IN HALF. 
EVERY INCREASE in rates since 1916 has 
been intended to—but did not—meet increased 
costs, CHIEFLY LABOR, and NOT to in¬ 
crease profits. 
Profits have GONE DOWN. 
In 1916 the railroads earned 6 per cent. 
In 1920 they earned less than % of 1 per 
cent. In 1921 they will be fortunate to earn 
3 per cent. 
A GENERAL reduction of rates now could 
not be made without BANKRUPTING most 
of the railways, and making business OF ALL 
KINDS much worse for everybody. 
The managements of the railroads are mak¬ 
ing every effort to reduce expenses so that rates 
can be reduced later. 
There is NO OTHER WAY than by reduc¬ 
tion in expenses to secure REDUCTION in 
rates. Those who obstruct reduction of ex¬ 
penses not only hurt the RAILROADS but 
the FARMERS as well. 
Association of Railway Executives 
Transportation Building 
Chicago, Ill. 
61 Broadway 
New York 
Munsey Building 
Washington, D. C. 
Those desiring further information on the railroad aituation can aecuro it by addressing the offices of the Association 
