Indiana daily times. [volume] (Indianapolis [Ind.]) 1914-1922, 1920-08-03
INCREASES MAY MEAN
.REVELRY OF PRICES

CHICAGO, Aug. 3.-The freight rate
increase granted the railways by the in
terstate commerce commission. may
"precipitate revelry Of high prices and
high wages" according to Clifford
Thorne prominent attorney and trans
portstion authority.
In an interview today Thorne com
mended the action OF the commission In
wiping out all 'ictituous capitalization"
and tentatively fixing the value OF the
railways. but declared that in the matter
OF rate adjustments the commission has
not been as considerable OF the rights
and interests Of shippers "a was the rail-
road administration
zone very far reaching result Of the
decision may be economic" Thorns
said.
1T will probably stop the movement
recently inaueurated for reducing the
prices of the necessities of life
ut is possible the decision may pre-
cipitate q revelry Of high prices and
high wages
This, however. will not apply to grain
and live stock, rs they are so thorough
~ dependent upon werld conditions.
Improved railway service. as a result
of the ~lecision is earnestly to be de-
sired
Shippers should cooperate to the
limit in the heavy loading and prompt
release Of cars
1T IS now up to the railroads to make
good"
Thorne explained how the commission
had gone about determining the valua-
ton Of the railways.
The commission has reduced the
claims of the railways by more than
100000 600 annually" he said.
MAKES OWN
APPRAISAL.
1T has reduced this sum by more
erty Investment accounts Of the rail
ways as representative Of their value.
TT has reduced thus sum by more
than 100000 600
a reduction of 800, 600 600 may seem
small, but it is twice as. great as the
total amount involved in The advance
rate case of 1910, twice as great as that
involved in the celebrated Z per cent
case of 1913, and sixteen times as great
as that in the western advance rate
case Of 1915
On the other hand, the commission
has been very liberal TO the carriers,
granting 90 per cent Of their claims
IF one were to buy all the railroad
property in the United States at the pres
ent market prices of their securities and
could sell them to the government at the
vzlue fixed by the commission. he would
make more than five billion dollars
AT a time when railway securities are
not worth more than IS cents on the dol.
laI the commission has deliberately wiped
out all fctitious capitalization and
adopted as a value of orr railroads a
sum equivalent or equal TO the parvalue
plus more than one billion dollars.
dCfnrn1iuiuo fhp vaIua n he
ways the commission did not outline its
reasons OF facts in detail. but wisely left
that for more extended investigation,
making the present appraisal only tenta-
tive
The next great case is going to be
lie actual determining of the valuation
Of the railways. by company.
Test cases will be decided in Tie
very near future
IN discussing the rate adjustment
chase, Thorne said;
THAT which is of keen interest 10
manufacturers and jobbers relates TO The
rate adjustments between competitive
Joints
a percentage advance makes whole
gale disturbance in rate relationship.
"A 40 PER cent increase on a dollar
rate is four times as much as a 40 per
cent increase on 25-cent rate
consequently. percentage advance
will compel the long haul shipper to
absorb a very substantial portion of the
advance to meet the prices of his COM
petitors
/ At present commodity prices have
.Abeen adjusted to equalize this freight
2st and that equalization or parity can
q X maintained If the advances in rates
NJ - substantially the same for rival
q panies; otherwise it forces a read
-. ztment of values and a disturbance in
49, mess conditions of the most serious
{ <*Eracter.
= - In this respect the commission has
<<zt been as considerate of the rights and
terest Of the shippers as was the rail-
II Toad administration
That body made ia. increase In cents
Z Is hundred pounds, thereby preserving
listing rate relationship on a large
1mher of haste commodities