Taiban Valley news., 1921-07-22

Gives REASONS
FOR DEPRESSION
Rail Chief Declares Freight
Charges Not the Cause
of Stagnation.
FARM PRODUCTS ARE CITED
Business Depression and Lack Of
Demand the Real Trouble.

fore the Senate Committee on Inter-
stnte Commerce, which is conducting
an inquiry into the railroad situation,
Julius Kruttschnitt, chairman of the
board of the Southern Pacific COM
pany, went into great detail as to the
effect of freight rates on produce ship
ments, foreign and domestic. The
main points he made In this part of
his testimony were:
First-That business depression ls
not the result Of high freight rates.
Second-That tho real cause Of stag
nation in produce shipments 10 lack
of market or prohteerlno.
He said, in part:
A widespread propaganda is being
carried on to arouse public sentiment
against existing freight rates. whereas
the fact Is that even since the rates
have been advanced the cost Of trans
porting commodities is far less than
the toll taken by the commission mer-
chant and the retailer for buying and
selling them.
Public Misled az TO Situation
People are misled and conclude that
high rates have stopped the movement
of large amount of freight and that
the railways would make more money
II they would reduce the rates and
thereby revive the traffic.
There is the strongest reason to be-
lieve that the very great reduction In
traffic has been due almost entirely to
general business conditions that are
worldwide in their effect, and that
would have come If there had been no
advanN in freight rates.
Prices Of commodities reached their
maximum In the first half of the year
1920 and thereafter fell with great
rapidity in France, the United States
and the United Kingdom. The fall in
the United States began in May, and
was rapidly on Its way downgrade in
September, when the advanced rates
took effect. Nevertheless traffic did
not drop for at least four months.
Slump Not Caused by Higher Rates
1t was a general dehation and fall
III piiNCb LIOH Iuc HtlSHlS W WHICH
they had been driven by war condI-
tions that has caused stagnatlon Of
business throughout the world.
That II Is not caused by the cost Of
transportation is convincingly shown
by the fact that stoppage OF buying
has caused an oversupply Of ships, |
hence ocean tonnage rates have been
recently at the lowest points in their
history. e
Notwithstanding these low rates,
ocean traffic shows as great stagna-
tion as rail traffic, and millions of tons
Of shipping here and abroad are rust
ing away in idleness. Many commorli-
ties would not move even II the freight
charges on them were abolished en-
tirely, because producers can find no
market.
That the decline In business is not
due to prohibltive freight rates Is
shown by the following examples:
In January OF this year the total
tonnage OF lines west OF Cl Paso and
cifc Company fell of II per cent.
The combined lntrastate freight tom
mage In Arizona and Nevada declined
80 per cent although no increase in
the intrastate freight rates in those
States has been as yet authorized
or made effective This decrease EN-.
braced grain, hay and livestock, as
well as ores and other commodities.
COTTON uNSHIPPED FOR LACK
OF MARKETS
Of Texas cotton crop OF over four
million bales, 40 pof cent remains un-
marketed. The average cost Of rail-
and water shipment from producing
point to Liverpool has been reduced
face Of which about one-haif million
bales OF cotton less than normal have
bee been ,1Sip exported to Liverpool. obviously
the restricted movement
=, During September, October, and
November, 1920. 45 per cent less rice,
~ per cent less canned salmon and
ported than during the same months
OF the previous year. although the
reouotion In ocean rates was sub.
etantlaiy more than the Increase In
Inland rail- rateO. 10 that the material
decine IN the exports Of these com.
modlties was in the face OF a less a9-
greEnte cost Of transportation.
The CaSe Of the Fruit ororerv
The troubles Of the California lemon
grower have attracted much attention.
he claims he Is unable to ship his prod
uct because Of the increased freight
rates. A removal Of all the recent In.
crease of the rate on lemons would not
help him. He has rate by sea through
the Panama Canal of less than half
4s per cent-of the rail rate, yet his
lemons are not marketed.
The average price Of cantalouDS
laid down In New York in the season
OF 1920 was not quite II cents. As
they were retnled at about 25 cents,
there is further profit to somebody
of IA cents per cantaloupe.
The managers Of the pi Opaganda for
a general reduction Of freight rates
have lost sight Of the fact that lr Oc-
tober, 1920, 1,195,321 carloads OF coal
were moved, being the maximum mov-
ed In any month In the preceding two
yenrs, although II was handled at the
advanced freight rates, and we have
heard nothing as TO coal being pro-
duced at a loss or Of the coal mInc
owners going ont Of business because