Imperial Valley press., 1921-04-19
co N N ERCE
HEAD NOT
SANGU|NE
ON GUT
Railroad Operating Expense
Too High to Permit of Re-
ducti0n in Freight Rates
on California Products.

United States Senator Samuel M.
Shortridge started in his first days as
a representative Of California inter-
ests at Washington by endeavoring to
secure hearings from the Interstate
Commerce Commission on'the subject
of freight rates from California to
the eastern markets on fruits and
He has just made, public a letter re-
ceived from Edgar f. Clark, chairman
of the commission in reference to the
to the matter 1t will be noted that Mr..
Clark states that no hearing can be
had in California; but since this letter
was written the commission has agreed
to hold hearing in Sacramento. The
outstanding points of the letter fol-
lows:
my Dear Senator: Following your
telephone conversation of day or two
since, l have your letter of the 4th,
relative to desire of parties interested
in the distribution of fruits and vege-
tables to have hearing at Los An
geles on the subject of freight rates.
THE request grows out of the fact
that we recently arranged to have our
director of traffic hold an informal
conference with Representatives of the
fruit and vegetable industry and of the
railroads at Dallas, Texas. The pur-
pose of the hearing was to have a full
exchange of ideas, to give the shippers
opportunity to present the difficulties
which they encounter, and to have the
railroad representative consider care
fully whether or not conditions were
such as to justify reduction in the
freight rates on these commodities.
"We sent notices Of the hearing to
railroads and interested shippers in
various sections of the South and
Southwest, including California. The
Los Angeles people requested that a
hearing be had at Los Angeles fol-
lowing the conference at Dallas, but
it was not practicable to comply with
that request.
"We have no authority to require
the railroads to reduce rates, except
after full hearing, at which the pro-
priety of the reduction is demonstrate
ed. We would be obliged to find that
the existing rates are unreasonable.
"The freight rates are on a very
high level. No one would be more
pleased than We if conditions would
permit general reductions therein. 1t
is, however, difficult to see how the
railroads could be urged to reduce the
rates when, as is shown by the Off
cial reports, they are as a whole earn
ing scarcely more than their operat-
ing expenses and taxes. 1t is obvious
that the present condition cannot long
continue without bringing widespread
bankruptcy to the roads. More than
90 cents Of every dollar they earn is
spent in operating cost of earning it.
Less than 10 cents of each dollar is left
with which to pay taxes. interest and
return on investment. Sixty cents out
of every dollar earned are paid out
in wages and on some roads this runs
as high as 81 cents.
"At the time the increased rates
We're inaugurated in August last it
was reconizegd that some readjust-
ments would be necessary. Many re-
adjustments have been made. In some
stances investigation has demonstrat-
ed that some reduction in the rates
would move substantial volume of
traffic with some profit which would
not move under the then existing rate.
Under those circumstances readjust-
ments have been made and are under
consideration.
1T is not pleasant to have to write
in this tone, and do not want to be
understood as pessimistic. l believe
that the situation is clearing and will
gradually clear, and that readjustment
Of the operating expense Of the rail
roads will produce a much brighter
outlook and make it possible to effect
more readjustments of rates with con-
sequent benefit to commerce and in
dustry generally.