The Washington herald., 1920-02-01
RAILROADS

Julius Kruttschnitt. chairman OF
the executive committee Of, the
Southern Pacific Company. has the
following to say relative TO the ef-
feet OF freight rates on the cost OF
living:
Tn the petition OF organized
labor leaders. headed by Mr. Comp
ers. presented TO the President on
December II. this statement oc-
ours:
Director General Hines and
members of the Interstate Com
merce Commission have shown
clearly that the return OF the rail-
roads will involve an increase in
freight revenue of close to a billion
dollars. the rates being Increased
25 TO so per cent. This increase in
rates. according to these same au-
thorities. will be reflected in an in
creased cost of living OF at least
s4.o00.000. 900, a year. possibly S.
eoO, 900, 900. The American people
cannot and should not stand such
increases'
Statement OF Labor Leaders.
In a similar petition filed by Or
ganized labor leaders with the Presi-
dent on January q the following
statement occurs:
"'You are aware that the return
OF the railroads will involve an in
crease in freight rates OF % TO 10 per
cent. since an additional railroad
revenue of close TO $l.Ooo. .0oo.0o0 will be
needed. Such an increase in freight
rates means an increase in the cost
OF living. as estimated by your
Director General OF Railroads, of at
least $4,000. COZ. 600 a year. This win be
nothing short of a national calamity.
These are nfisstatements un-
founded on fact that have so fire.
quently been made that, IL unchal-
lenged. will deceive many who are
without data necessary on which 70
base a correct opinion.
1--WE can make a forecast of the
future by remembering the past The
outbreak Of the European war in 1914
marked the beginning OF the rapid
rise of prices from which We now
suffer.
The cumulative effect of ali
steam railroad freight charges.
which in their remotest ramifica-
tions can affect the values of COM
modities for the year 1914. which
marked the opening of the war. has
been weighed. and the same has
been done for 1919. To establish the
influence of freight charges on the
hfuvh laval 81 rnpnrrAdffN nrira. in
1919 compared with 1914. the Inter-
state Commerce Commissions meth
DDS Of computing tonnage and reve-
nue. statistics and ours in estab-
fishing prices. being the same in
both periods, will not affect the
soundness of these conclusions:
1913. 1914.
Average commodity value
per ton 81 freight origi-
mated .................. sIla.oo SIS .or
Freight charges per ton
originated .--..---.------ ND -V
Increase in cost 10 con-
sumer. 1919 over 19I4.... 63.oo .....
Increase in freight charges
per ton. 80 ....
Relation Of freight increase
to cost increase Is. --.-.
In other words, only 80 cents out OF
s6S. or Is cents out of every dollar oil
increase in value OF commodities IN
1919. was caused by increased freight
charges; the responsibility for the re-
naming s62 20. or 9.T cents out o'
every dollar. must be sought else
where. 1t was not caused by freight
charges.
Rates Negligible Influence
The figures in the following table,
giving the fluctuations in freight rates
and commodity prices for thirty years.
Bradstreet's index numbers, 1See-lsls;
index numbers for 1880 and 1891 COM
piled on basis of United States De-
partment Of Labor index numoers)
show at a glance that freight rates
have had a substantially negligible in
fuence on commodity prices: