Montpelier examiner. [volume] (Montpelier, Idaho) 1895-1937, 1921-06-03
GIVES REASONS
FOR DEPRESSION
Railroad Chief Declares
Freight Charges Not the
Cause of Stagnation.
ARM PRODUCTS ARE CITED
business Depression and Lack
Of Demand the Real Trouble

w hSuluktVuS ~ I'LL teSttAy- |
ng before the Senate Committee |
"a Interstate Commerce, which is
.onducting an inquiry into the |
abroad situation, julius krutt-
,chnitt, Chairman of the Boaru
II the Southern Pacific Company, |
vent into great detail as to the
fleet of freight rates on produce
shipments, foreign and domestic,
| the main points he made in this
)art of his testimony were: Frs,
| THAT business depression Is no.
| he result OF high freight rates,
| Second-That the real cause OF
stagnatlon in produce shipments
| lack of market or profiLeering
de said, in part: A widespread
| propaganda is being carried on
. arouse public sentiment agains.
.Xlsting freight rates, whereas
ne fact is that even since the
ates have been advanced the cosr
Il Transporting commodities i
ar less than the toll taken by the
commission merchant and the re-
.ailer for buying and selling them.
Public MIsIed aa TO Situation
People are misled and conclude
that high rates have stopped The
movement of Q large amount OF
reight and that the railways
would make more money if they
would reduce the rates and there
by revive the traffic. There Is
The strongest reason TO believe
that the very great reduction III
traffic has been due almost en-
,irely to general business condl
lions that are world wide III their
fleet, and that would have come
If there had been no advance III
freight rates. Prices Of com
nodities reached their maximum
N the first half of the year 1870
and thereafter fell with great
fapidity in France, the United
states and the United Kingdom.
,he fall in the United States be-
gan in May, and was rapidly. on
lis way down-grade In September,
when the advanced rates took
fleet. Nevertheless traffic did
lot drop for at least four months.
Jump Not Caused by Higher Rates
1t was a general deflation and
all in prices from the heights TO
which they had been driven by
var conditions that has caused
4 4 stagnation of business through
I1ut the world. That il is not
caused by the cost Of transporta-
ION is convincingly shown by the
TACT that stoppage OF buying mas
caused an oVersupDly OF SHIPS,
lence ocean tonnage rates nave
been recently at the lowest points
n their history. Notwithstanding
hese low rates, ocean tfatilc
shows as great stagnation as ran.
,raffic, and millions of tons OF
shipping here and abroad are
asting away in idleness. Many
commodities would not move even
/ the freight charges on them
we're abolished entirely, because
PRODUCERS can find no market.
That the decline In business is not
iue to prohibitive freight rates 10
,hoWn by the following examples:
In JanuNry OF this year the total
tonnage OF lines west OF 81 Paso and
ogden operated by the Southern Pacific
Company fell off 81 per cent. the
combined intrastate freight tonnage
in Arizona and Nevada declined 30 per
cent although no Increase in the intra-
state freight rates 10 these states
has been IS yet authorized or mace
effective. This decrease embraced
grain, bay and livestock, a. well .
ores aud other commodities.
Cotton unshIpped for laoR Of
Markets
OF Texas cotton crap Of over four
million bales 20 per cent remains I'M
marketed. The average cost Of Fati
and water shipment from producing
point % Liverpool has been reduced
about S1.eeh per 100 pounds In the
face OF which about one half million
bales OF cotton less than normal have
been exported 70 Liverpool. Obviously
the freight rate Is net TesDonsibls for
the restricted movement During
September. October. and November.
1920, IS per cent less rice, 30 per
cent less canned salmon, and ~ per
cent less dried fruit were exported
than during the same months OF the
previous year, although the reduction
In ocean rates was substantially more
than the Increase IN inland rail rates.
% that the matsrisl decline In the
exports OF these commodities was in
the face Of > less aggregate cost Of
transportation.
The Oaee % the Fruit Growers
The troubles Of the Californl
emon grower have attracted muc
attention. he claims he 9 un
Of the increased freight rates.
removal of all the recent increas
of the rate on lemons would nc
help him. he has q rate by sc
through the Panama Canal Of les
than half-49 per cent-of tn
rail rata, yet his lemons are M
marketed. The average price
cantaloupe laid down In Ne
York in the season Of 1920 we
not quite II gents. AS they wei
retafied at about % cents, the
is a further profit 70 somebot
Of Il cents per cantaloupe.. TT
managers Of the propaganda !.
general reduction of freiR
rates have lost sight OF the "a
that in October, 1920. f,i05,5;
carloads OF coal were moved,
ing the maximum moved in a
month in the preceding two veal
although Il was handled at I
A..nnnA RrnIah4 nnAnm and