Fare Ideas

It became known last week that a committee of Eastern railroad presidents, headed by big, bald Frederick Ely Williamson of the New York Central, was studying the possibility of cutting passenger fares. Thus an amusing cycle in the Eastern railroads' fare policy seemed soon due for completion.

Five and a half years ago Mr. Williamson headed another committee with exactly the same mission. Certain Western and Southern roads had tried cutting fares, had got an immediate rise in passenger revenue. Nonetheless, after due discussion, the Eastern roads decided against slashing the established 3.6-c--a-mile coach fare, 4-c- Pullman fare. Finally, in 1936, ICC ordered them to cut to 2-c- and 3-c- respectively. The Eastern roads were furious at the order, would have fought it out in court had not the Baltimore & Ohio refused to cooperate. Passenger revenue, however, jumped as a result of the lower rates (Mr. Williamson's New York Central enjoyed a $7,000,000 rise that year).

Last spring, faced with Depression II, the Eastern roads recalled their bitterness, persuaded even the B. & O. that higher passenger fares were the thing. In July, ICC agreed to a rise in the coach fare from 2 1/2-to-2 1/2-c-. This time, instead of the $32,000,000 boost in revenue which Mr. Williamson and friends expected, passenger revenues dropped--the New York Central's falling 17% in August, compared with 1937, the B. & O.'s 19.5%, the New Haven's 3%. This slump continued until the Christmas holidays, when the roads experimentally restored the old low rates, got an immediate lift. Hence last week's committee.

Three years ago, onetime New York State Senator John Ambrose Hastings, once one of Jimmy Walker's henchmen and now installed in Washington with the backing of Frank R. Fageol, president of Twin Coach Co. (a bus manufacturer), suggested to Federal Coordinator of Transportation Joseph Eastman that railroad fares be "postalized." Fortnight ago Mr. Hastings popped up again with his scheme, took a full-page advertisement in the New York Times to propound it. Under "postalization," the U. S. would be divided into nine zones, and for each of five types of passenger service the same rate would be charged for travel anywhere within a given zone. Examples : New York to Albany, $1 ; New York to Chicago, $1. There would also be suburban zones--15-c- for a single trip, 25-c- for a round trip.

Would this ultimate in rate-slashing produce a compensating increase in traffic? Although passengers provide only 10% of total U. S. train revenue, most Eastern roads get an abnormal share of their revenue from passengers (the New Haven gets 36%). For them, the success of postalized fares would probably depend on whether the bargain rates for commuters inspired an exodus to the "suburban zones."

Skipping all such considerations, Senator Burton Wheeler, head of the Senate Interstate Commerce Committee, last week declared that postalization looked good to him, passed it along to ICC.

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