Graham guardian., 1915-10-22
TRANSPORTATION ASASUB.
SIDY

burden on trade said to be imposed
by Panama canal charges are some
thing more than "reminiscences of
the tolls controversy of two years
ago. They undoubtedly represent
what is rapidly becoming kind Of
national attitude regarding trans
portation. The argument of those
who express themselves is that were
it not for the cost Of the tools a
good deal of freight now kept out"
of the Eastern market would find
itself in demand. Transportation.
that is to say, instead of being
reckoned as one Of the regular and
inevitable costs of putting an article
into the hands of the consumer is
regarded as an unnatural or unfair
handicap to the producer some
thing to be done away with by egis-
lation or other artificial means. If
this view were limited to the canal
and its tolls the case would not per
hap3 be very significant. But it
represents something much broader
than any merely local or special
issue.
A review of the testimony in the
recent rate cases before the Inter-
state Commerce Commission shows
how deeply the subsidy theory of
transportation has penetrated the
minds of shippers or those who rep.
resent them. No argument is com.
mOner in such hearings than that
a given industry cannot bear the
rates it is paying, or at all events
cannot submit to an advance. This
view, when analysed, usually
amounts merely to statement that
consumers win not pay higher prices
for goods than that they are already
charged with, and that consequently
producers must pay any higher
freight charges that may be ex-
acted, thereby reducing their profits
below what they consider fair or
satisfactory. Such a position, of
course, assumes that the carrier can
bear what the shipper cannot, or is
not willing to endure. particularly
an idea which may be correct in any
given instance, but which when
broadly applied means that the rail-
road can be allowed profit only
after every other party to the op-
Grafton has received his share of the
returns. The most surprising fea-
ture of the case is that this attitude
toward transportation seems to be
not infrequently adopted both by |
the national and by State railroad |
commissions. A few years ago, |
during the campaign against re-
bates, one chief contention Of re-
formers was that some classes of |
producers were favored above others
and that if a fair field and no favor
could be assured there would be
little more to be said. In fact, it
was then often stated that the level
Of railroad rates was a matter of
minor import, provided that that
level was the same to ALL Now the
attitude of many rate regulators
has manifestly changed, and they
usually contend that rates must be
low enough to move the traffic. or
to let existing traffic move under
prevailing market conditions.
1t would be easy to see the justice
in this view if transportation cost
nothing. The Panama Canal, how.
ever, has cost several hundred million
dollars ard is today operated under
deficit conditions. The railroads
nave cost vastly moie. Some of
Them are operating subject to yearly
deficits and others are barely meet.
ng expenses. The fact that some
are prosperous does not alter the
Ease of those that are not. Our
ships, of whose prospects and diff
iculties so much is heard, could be
lavigated as cheapIy as those of
other nations, but since legal re-
,trictions have raised operating costs
subsidies are called for in order to
over frcights or insure continued
voyages. Neither the ships nor the
can go ON when they arr
to excessive costs Of opera