The Oklahoma miner. [volume] (Krebs, Okla.) 1912-192?, 1921-06-02
Rail Chief Declares Freight
Charges Not the Cause
Of Stagnation.
FARM PRODUCTS ARE CITED
Business Depression and Lack Of
Demand the Real Trouble.


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 Is
not the result of high freight rates.
Second-That the real cause of stag
nation in produce shipments is lack
Of market or profiteering.
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 Mislcd as 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
If 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
advan T. in freight rates
Prices of commodities reached their
maximum in the first half of the year
1920 and thereafter fell with great
rapidity i'm France, the United States
Nnd the United Kingdom The fall in
he 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
In prices from the heights to which
they had been driven by war cOndi-
tions that has caused a stagnation Of
business throughout the world
That it is not caused by the cost of
transportation is convncingly 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.
Notwithstanding these low rates,
ocean traffic shows as great stagna-
ton as rail traffic, and millions of tons
Of shipping here and abroad are rust
lng away in idleness Many cOmmodi-
ties would not move even if the freight
charges on them were abolished en-
drely, because producers can find no
market
That the decline in business is not
due to prohbitive freight rates is
shown by the following examples:
In January of this year the total
tonnage of lines west Of lei Paso and
ogden operated by the Southern Pa
cihc Company fell Off Al per cent
The combined lntrastate freight ton
mage in Arizona and Nevada declined
30 per cent although no increase in
the ntrastate freight rates in those
States has been as yet authorized
or MADE eHecuEe. rms rms decrease EN-
wen as ores and other commodities.
ctTToN uNsHIPPEo FOR LACK
Texas cotton crop of over four
miV on bales, 40 per cent remains un-
P,<rketed. The average cost Of rail
md water shipment from producing
koInt to Liverpool has been reduced
about $12sR per 100 pounds, in the
gaCe of which about One-haf million
2ales of cotton less than normal have
been exported to Liverpool. Obviously
ne freight rate is not responsible for
NE restricted movement.
During September, October, and
lavender. 1920 As per cent less rice,
so per cent less canned salmon and
n per cent less dried fruit We're ex-
port%z than during the same months
of % previous year although the
redkS2'eH In ocean rates was SUBJ
sshRt!klH more than the increase in
F1Sn& rail- rates, so that the material
e4Gine in the exports of these COM
Godites was in the face of a less ag-
gregate cost OF transportation.
The Case of the Fruit Growers
The troubles of the California lemon
cover 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. lie 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 cantalOupe
laid down i'm New York in the season
of 1920 was not quite II cents. As
they were retailed at about 20 cents
there Is further profit TO somebody
of IT Cents per cantalOupe,