The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1921-05-20
Rail Chief Declares Freight
Charges Not the Cause
of Stagnation.
FARM PRODUCTS ARE CITED
Business Depression and Lack OF
Demand the Real Trouble.

IOre Tue Sendte SOuulLlec Oh An'
state 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 10
not tho result Of high freight rates.
second-That the real cause Of stag.
nation in produce shipments 10 lack
Of market or profiteerlno.
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 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
II they would reduce the rates and
thereby revive the traffic.
There Is the strongest reason to be-
It,ra +h,+ tho ,orv oroof rodurfion iO
traffic has been due almost entirely to
general business conditions that are
worldwide In their effect, and that
would have come II there had been no
advandn 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 defation and fall
in prices from the heights to which
they had been driven by war condi-
tons that has caused stagnation OF
business throughout the world.
That it 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.
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 commodi-
tics would not move even If the freight
charges on them were abolished en-
tirely, because producers can find no
market.
That the decline in business is not
due to prohibitive freight rates Is
shown by the following examples:
In January Of this year the total
tonnage Of lines west Of E Paso and
Ogden operated by the Southern Pa
cifc Company fell off II per cent.
The combined Intrastate freight ton.
50 per cent although no increase In
the intrastate freight rates in those
States has been as yet authorized
or made effective. This decrease en-
brseed grain, hay and Livestock, ,Sai,,,a. as
COTTON UNSHtPPED FOR LACK
or Markets
OF q Texas cotton crop Of over four
million bales. 40 per cent remains unI
and water shpnnsnt from producing
point 70 Liverpool has been reduced
about t1.esI per 100 pounds In the
face Of which about ons-half million
been exported to Liverpool. Obviously
the freight rate is not responsible for
the restricted movement.
During September, October, and
g. par cent iyt less canned S'a Salmon @ and
n per cent less dried fruit were eI-
ported than during tho same months
Of the previous year, although the
.ssnsIafIy aHS mors NJ s'sa shan the tho increase GRE % IN
Inland rail- rates, 30 that the material
decline in the exports Of these COM :
modities was in the fac6 Of less ar
gregate cost Of transportation.
The Case Of the Fruit Growers
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 freigh,
rates. A removal Of all the recent in
crease Of the rate on lemons would no,
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 cantaloupe
laid down In New York In the season
Of 1920 was not quite II cents. As
they were retailed at about Is cents
there Is a further profit to somebod!
Of ID cents per cantaloupe.
The managers Of the propaganda fol
general reduction Of freight rates
have lost sight Of the fact that in Oc
tober, 1920 1,195,321 carloads Of Goa
were moved, being the maximum NOV
ed in any month In the preceding two