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Despite all their advances, there is a practical limit to how much the railroads can accomplish alone. Railroaders complain bitterly that the Internal Revenue bureau's taxmen take no account of their progress. The new diesels and freight cars are still depreciated at 20-year rates, but because of the industry's rapidly advancing technology, they must often be junked in ten years or less. And the railroads are forced to pay many other taxes that competing industries avoid. While the New York Central's stations were once monuments to prosperity, now they are millstones, costing far more to operate than they earn in tickets. To cut its losses the
Central has already put up 400 of its stations for sale, and many other roads want to get rid of their terminals.
Another big complaint is that airlines and trucks use public airfields and highways for a relatively small fee, while railroads must pay steep taxes and maintenance for every mile of rail. New Jersey alone collects an average $9,511 annually for every mile of line; the 13 railroads serving New Jersey pay $1.67 in state taxes for every $1 worth of business they pick up in the state. On top of that, railroadmen point to other special taxes, e.g., a federal railroad retirement tax, figured at of employee earnings v. only 2% for other industries, plus a 3% tax on freight shipments during World War II to discourage shipping on the overloaded roads, but never taken off.
The biggest single problem, say railroadmen, is the archaic system of regulations enforced by Interstate Commerce Commission. Says Pittsburgh & Lake Erie President John W. Barriger: "The ICC's current rules are as economically stupid as 18th century medicine. They are killing the railroads. If General Motors had to wear our uniform in this league, it would be busted in two years."
One trouble is that ICC is slow and hesitant to let railroads boost rates enough to cover inflated costs. Though U.S. roads have won 13 freight-rate increases since 1946, the hikes have only increased revenues per ton-mile some 45%, while wages jumped 130%, and material costs rose 80%. Another complaint is that ICC will not let the roads cut rates on products they can carry cheaper than competing trucks, thus tends to allocate markets and stifle free competition.
Railroadmen who try to lop off money-losing spur lines that no longer are really needed often have to run through months or years of hearings. The Chesapeake & Ohio, for example, consistently failed to get permission to discontinue a train that averaged only a handful of passengers daily. Finally the principal objector admitted that he did not ride the train himself; he just liked to set his watch by the train's noon whistle. Regulatory agencies know that every road has similar lines that should be eliminated so that the money saved could be used to improve service elsewhere. But they are reluctant to pare the costs, because they want railroads as a stand-by service in case weather makes plane and car travel impossible. Sighs one railroader: "What we are is foul-weather friends."
BY AIR & BY SEA