The Hays free press. [volume] (Hays, Kan.) 1908-1924, 1921-05-19
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.


state Commerce. which is Conducting
an inquiry into. the railroad situation.
Jnilus kruttschnitt. chairman Of the
BOARD OF the Southern Pacific com
pany, went into great detail as to the
eject 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 profiteerlne.
He said iu part:
n widespread propaganda is being
carried "n 1" arouse public sentiment
against existing freight RACES. whereas
the fact * that even since the rates
have been advanced the cost of trans
porting commodities is far less than
the toll taken 10y 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 Il 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
advance in freight rates
Prices Of commodities reached their
maXimU" in tho first half of IA" wear
1920 and thereafter fell with great
rapidity i'm France. the United States
and the United Kingdom. The fail 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
II was general defiation 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 il 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-
ton as rail traffic. and millions of tons
OF shipping here and abroad are rust
ing away in idleness. Many commodi-
ties would not move even II the freight
charges ON them were abolished en-
tirely. because producers can find no
market.
due To prohibitlye freight rates is
shown by the following examples:
In January Of this year the total
tonnage % lines west Of II Paso and
Ogden operated by the Southern Pa
cine Company fell OF Al per cent.
The combined lntrastate freight ton
mage in Arizona and Nevada declined
50 per cent although no increase in
the intrsstate freight rates IN those
States has been as yet authorized
or made effective. This decrease en-
braeed grain. hay and livestock. as
COTTON UNsHIPPED FOR LACK
OF MARKETS
7 OF a Texas cotton crop Of over four
million bales. 40 per cent remains IN
marketed. The average cost Of rail-
and water shipment from producing
point to LIVerpooI has been reduced
about S1.2s1a per 100 pounds. in the
face of which about one-ha!f million
bales OF cotton less than normal have
been exported to Liverpool Obviously
the freight rate is not responsible for
the restricted movement.
During September. October. and
November. 1920, 45 per cent less rice,
so per cent less canned salmon and
n per cent less dried fruit were ex-
ported than during the same months
OF the previous year. although the
reduction In ocean rates was sub
stantialIy more than the Increase In
Inland rail- rates, so that the material
decline in the exports OF these COM
modities was in the face OF less ag-
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
product because OF the increased
freight rates 4 removal Of all the
recent increase OF the rate on lemons
would not help him. He has a rate by
sea through the Panama Canal of less
than haIf-4S per cent-of the rail
rate vet his lemons are not marketed.
The average price OF a cantaloupe
laid down An New York in the season
of 1920 was not quite IL cents. AS
they were retailed at about 70 cents
there is a further profit TO somebody
of IA cents per cantaloupe-
The managers OF the propaganda Tor
q general reduction OF freight rates
have lost sight OF the fact that In DC
tober. 1920, 1.195.321 carloads OF coal
were moved, being the maximum NOV
Cd In any month in the preceding two
wears. although IL was handled at the
advanced freight rates, and we have
beard nothing as TO coal being pro
duced at loss OF OF the COa' NINE
owners going out Of business because
of existing freight rates
The percentage Of freight charges
TO value in the early part OF 1871 Is
almost exactly the same as II was III
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