New-York tribune., 1919-09-25
krutscilnitt Holds
Freight Charges
Are Not to Blame
transportation Cost, He
Says, Contributes Only
Slightly to the Rise in
Prices for Commodities

transportation charges collected
by the steam railroads of the country
have played but a small part in lift
ing commodity prices to their present
level, according to julius Krutschnitt
president of the Southern Pacific Com
pany In letter to the Hon. John
}. Esch, chairman of the Committee on
Interstate and Foreign Commerce of
the House OF Representatives, Mr..
hrutschnitt estimates that only 80
cents out OF $63, 1.3 cents out Of every
dollar OF increase IN value Of com
modItles IN 1919 was caused by in
creased freight charges
he responsibility for the remain
ing $62.20, or 9S7 cents out of every
dollar says Mr.. Krutschnitt in his
communication, must be sought else
where' 1t was not caused by freight
charges. SO many commodities origi-
nate on railroads, the values of which
are affected by freight charges, some
eAcrting substantial and some exerting
negligible influence, that their influence
on commodity prices IN individual
cases cannot satisfactorily be COM
puted, but the relation that the ma
TONS entire yearly freight bill bears
TO the value OF all commodities trans
ported by the railroads can be salts
1actorily and accurately measured.
The Yearly Freight Bill
I'm the year ended June 80, 1914, the
Interstate Commerce Commission re.
ports shoW that all Class and Glass 2
steam roads IN the United States origi-
mated l,U9i, ,l23,S90 tons of classified
1relght tor transporting, for which the
carriers collected $2l14,697629. ar
average of $l93 per ton; they also re.
celvcd $15,54l 500 express revenue fol
transporting additional tonnage of un-
hnoWn amount as no record thereof is
Kept oy the Interstate Commerce Com.
mission. Nevertheless we have addcC
express revenue to freight revenue
without any addition to aggregate ton
mage or values, thereby increasing the
average freight charge per ton from
sl'95 TO 81, and the percentage of freight
revenue to commodity value from
% per cent TO 3.6 per cent. The l.
V91,l23,S95 tons are classified by the
commission under thirty eight heads
10 which appropriate unit values, based
on data obtained from publications. OF
the United States Department OF
Labor, from the United States Rail
ROAD Administration, from quotations
In the press and from other reliable
sources, have been assigned.
The aggregate value of all tonnage
originated and transported by the rail
roads thus determined, is S6l ,4s2 900.
O0o. which, divided by the number OF
tons originated, gives the average value
per ton of all commodities $56 tc
which the 50 freight charge bears the
relation of 3.6 per cent.
I'VE have had to estimate data fo1
the entire year 1919 from those that
have already appeared for the first six
months, and as the estimated traffic
is substantially the same as that of
1916, we have applied 1919 prices to
the tonnage of classified commodities
of 1916, whence the average value per
ton is S1l9, or l12 per cent more than
that of 1914. Freight charges per ton
including express charges received by
the carriers, are found to be $3.50
80 cents, or 40 per cent more than in
1914.
From this it appears that the rela-
tion of average freight charges to the
average value of commodities. because
of the more rapid rise in values than
in charges, is less in 1919 than it was
in 1914, having fallen from SO per
cent in 1914 TO "a per cent in 1919,
or 33 per cent, and that of the total
increase in values of $63 per ton, the
increase due to freight charges was
but so csntA