Evening journal., 1920-01-30
Where Commissioner WoolIey is Right and
Where Wrong About Railtcay Rate Increases
lrrom lhe New York snn.l

Commissioner Woolley OF The lnier-
state Commerce Commission ls being
generally reprOved by railroad men for
his public statement against an Increase
In railway traflo rates, because, as he
was quoted, II there were an advance
IN freight rates the charges would reach
The public as a very much larger sum
that the freight advance itself.
If Commissioner WOOlley was cor
reotly quoted he does deserve reprO0f,
but not for the reason some railroad
men criilclse him bitterly for-hls dec
laration that the public must pay the
increased transportation charges. That
Is Just what the public VIII do.
The Railway Age backs an argument
to the contrary which may be briefly
stated. II Is that commodity prices
have gone up, sometimes enormously,
without traffic rates going up appre-
cably or at all; that railway rates have
gone up at times but commodity prices
either have remained stationary or have
gone down.
The Railway Age cites as examples
that from the fiscal year Of 1914 TO the
end Of the first five months OF 1918 the
freight rate 90 the zone mile Increased
only per cent, while in the same per-
iod the average increase In the whole
sale prices Of commodities was 9i per
cent. But between the end Of May,
1918, and the end Of May. 1919, the aver
age freight increase was 81 per cent,
vet the average increase in wholesale
prices for the same period was only 10
per cent, while there was actually
decline In the retail price Of most kinds
Of dry goods" The Railway Age fur
thermOre submits:
Taking twenty-five articles rang
ing all the way from sirlOin steak
10 oranges, the Bureau Of Labor
Statistics shows that If the weighted
average prices Of these articles on
August Is, 1915, be taken as 100 per
cent. then their weighted average
prices in 1917 were las per cent. in
1918 40 per cent. and in 1919 t9i
per cent While freight rates actu-
ally declined between 1913 and 1917,
the average increase in prices was
4S per cent. and while the advance
i'm freight rates betweN 1918 and
1919 was 81 per cent, the weighted
prices Of articles Of food advanced
only 81 points, representing a per
centage Increase i'm prices Of Just
about 30 per cent. The fact is that
freight rates are So low compared
with the value OF most commodities
that they exert very little influence
upon their prices
NOW this sort Of argument is not so
idiotic us the celebrated suit OF UNDER
wear argument used by some railroad
mon buf f. is iust as unsOund. The
suit OF underwear argument runs
something like this: The retail price
of n suit Of underwear made in New
England has gone up, say, three dol
lars. but 20 ship IL from Boston TO chi
cago costs only a few cents more than
II cost before. But in the cost OF pro-
duction Of the suit Of underwear itself
from start to finish were various ana
varied freight charges-on machinery
raw material, the food eaten by the
operatives working on the underwear,
the food eaten by the men who built
the house in which the operatives and
their families live, the food eaten by
the men who made the material going
into the house and eaten by their fami-
lies. And, of course, a suit or under
wear is only a very small part OF a
familys annual purchases. WHAT IS
true OF the suit Of underwear and the
hundreds Of different traffic rates in it,
moreover, is true Of every single thing
a man and his family eat, wear and
otherwise consume All the articles |
carry many different items Of railway |
traffic rates.
The Railway Age argument about the |
course Of prices is as unsound as the /
suit OF underwear argument because |
the fact remains OF the hundreds Of /
millions Of extra transportation charges /
paid by the American public and by /
nobody but the American public be- |
cause there is nobody else to pay them. /
Commodity prices might 20 up under |
the natural laws while traffic rates
were standing still, but that would not 4
prove and could not prove that com |
modify prices could not have gone still /
higher if the trafllc rates also had gone I
up. Commodity prices might go down
and 60 down heavily, under the natural
laws, while trafllc rates were going up