The labor world. [volume] (Duluth, Minn.) 1896-current, 1920-08-14
MUST NOT BOOST
COST OF LIVING
Protiteers Would Multiply Prices
Four-fo|d on Strength Of
New Railroad Rates.
Continued From Page One.

maximum, only 33 cents to the legiti-
mate cost of barrel Of flour carried
from Minneapolis to Philadelphia.
Similar conditions exist in the case
Of clothing. In 1919, the freight rate
on a $50 suit Of clothes for such an
unusually long haul as from Chicago
to Los Angeles was only % cents. An
increase Of 40 per cent in freight rates
should add less than cents to trans
portation costs, and should add only
that amount, as a maximum. to the
cost of Chicago-made suit Of clothes
in Los Angeles, California. Again, in
1919, the freight rate on $1,000
West, Florida, was only 81 cents per
pair. Thus an increase of 40 per
cent in freight rates would add less
than 2 IL cents to the cost of Bos-
ton-made pair of shoes in Key West,
Florida.
Even on Photographs.
Even in the case of such luxuries
as monographs and pianos, the sit
uation is not very different. Thus, in
1919, the freight rate for transporting
photograph retailing at $3.50, from
New York to Atlanta, Georgia, was
only $2.S5. An increase of 40 per
cent would add only $1.14 to the cost
of a. New York-made phonograph in
Atlanta, Georgia. For hauling such
a bulky and awkward object as a
piano all the way across the CONT
nent. the freight charge in 1919 was
$500. Thus an increase Of freight
rates Of 40 per cent should add not
over $11.20 to the cost of a New York
piano in San Francisco.
The cases above cited are rather
extreme, in that the average haul is
probably very much less than those
mentioned as examples. and the
freight charge IS therefore consider
ably less. For instance. while Min
neapolis is the center OF the flour
milling industry. much flour is ground
locally and often not subject to trans
portation by train at ALL
Some Freight Statistics.
The conclusion thereof seems inev-
liable that while the increased. freight
rates will place an added burden
upon the consumer, this burden will
not be very heavy, provided prices
Of commodities are raised no more
than necessary to compensate for the
increased freight rates. This conclu-
sion is fortified by the fact that, in
1919, the total value OF all commodi-
ties transported by freight was $1,000
per ton, whereas the average charge
per ton was only $3.50, or less than
IL per cent of the value. An in
crease Of even 40 per cent in freight
rates would therefore add less than
l per cent to the average value Of the
total freight carried.
However, there is a solution of the
problem that would involve no addi-
tional burden to the general public.
The increase in freight rates, it has
been estimated, will amount to $780,
100000 year. Even this large
amount is insignificant as compared
with the excess profits now being ex-
acted by the basic Industries, and
could easily be absorbed by them out
OF these profits without any increase
at all in prices
Some Excess Profits.
In the data on profiteering pre-
sented by the railroad brotherhoods to
the Railroad Labor Board. it was
shown that the corporations Of the
country were making excess profits
to the extent Of At least 81, 500, 900, 900
annually: That b, these companies
were making this huge amount over
and above the laorn1a1 profits which
they made in pre-war years. These
figures were for the year 1918, and it
was proved that In 1919 and 1920
even larger profits were being made.
In other words, the great industries
OF the country could amply afford to
deduct the increased freight charge
from. the price of their products, thus
allowing the commodity to reach the
retailer at the same price as formerly.
BY so doing, they would be reducing
their excess profits less than one
fourth, and would still have left their
full normal profit and three-fourths
or more of the excess profit which
they are now making.
The figures on which this statement
is based are those published by the
companies themselves in the recog-
nized financial manuals. The earn
:lngs of large group Of over 200
representative industrial corporations
were analysed for. the seven-year
period. 1912 to 1918, inclusive. For
the pre-war period, 1912-1914, the
average annual net income Of the en-
tire group was $4sS,663,427. During
the war years Of 1915, 1917, and
1918, these same companies made an
average annual net profit, after pay
ing all war and other taxes, Of 1884,
1888, an excess Of approximately
$So0,0oo,o0o per year over the pre-
war earnings.
Six Times More,
Based upon figures reported by the
Treasury Department this group COM
prised about one-sixth Of the total
corporate income Of the country. AS
they were not selected in any way
and were faily representative of in
dustry as a whole, it is entirely fair
to assume that the aggregate of excess
profits made by all corporations was
| at least six times the amount shown,
or $4,000, 900, 900.
! A further study of profits for the
year 1919 showed that 127 of these
companies which had issued report,
made $740,391,243 in that year a,
compared with $61s,373,sse in 1918
At the time this latter analysis wa,
made all of the corporations formerly
Included in the compilation had moi
issued reports. A still further study
| ~ current oro19fo rr1,So1, 49, zx,.,