Shoshone journal. [volume] (Shoshone, Idaho) 1884-1931, 1921-05-20
GIVES REASONS
FOR DEPRESSION
Railroad Chief Declares
Freight Charges Not the
Cause of Stagnation.
FARM PRODUCTS ARE CITED
Business Depression and Lack
of Demand the Real trouble

railroad situation, JULIUS hFutt
scHnItt, Chairman OF the Boar
Oh the southern Pacific Company
went l4to great detail as 10 tn
effect Of freight rates on produci
shipments, foreign and domestic
Inc nam points he made IN Thu:
part OF his testimony were: Firs
THAT business depression is no
the result of hlgh freight rates
Secon0-That the real cause OF
stagpatlon In produce shipments
ls lack of market or prOfIteerIng
be 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 transporting commodities Is
far less than the toll taken by the
commission merchant and the re-
taller for buying and selling them.
Public Misled as TO Situation
| People are mlSled 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 there
by revive the traffic. There Is
| the strongest reason to believe
that the very great reduction in
| traffic has been due almost en-
| TREY to general business condl-
| lions that are world wide in their
| effect, and that would have come
| If there had been no advance III
| freight rates. Prices of COM
modities reached their maximum
in the first half of the year 1920
and thereafter fell with great
rapidly in FraIce. the United
States and the United Kingdom.
The fall in the United States be-
gan in May, and was rapidly on
its way down-grade 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 a general deflatlon and
fall in prices from the heights TO
which they had been driven by
war conditions that has caused
stagnation of business through
out the world. That 1T is not
caused by the cost Of transporta-
ton 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 stagnation as rail
traffic, and millions of tons OF
shipping here and abroad are
rusting away in idleness. Many
NJ. a Ii ~ 3
if the freight charges on them !
were abolished entirely, 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 or lines west OF Ell Psso and
ogden operated by the Southern Pacific
Company fell Off Al per cent The
combined lntrastste freight tonnage
in Arizona and Nevada declined SO per
cent although no increase in the intrs-
state freight rates in those states
has been as yet authorized or made
effective. This decrease embraced
grain hay and livestock, as well as
ores and other commodities.
Cotton Unshipped for Lack Of
Markets
or Texas cotton crop OF over four
million bales. 40 per cent remains I'M
marketed. The average cost OF rail
and water shipment from producing
point 10 Liverpool has been reduced
about si.2sh per 100 pounds In the I
face OF which about e-hslf million
bales OF cotton less than normal have
bean exported 10 Liverpool. Obviously I
afoxf d for
the restricted movement. During
September. october. and November.
1890, as per cent less rice, 30 per 4
cent less canned salmon. and ~ per
cent les, dried fruit were exported
than during the same months OF The 4
previous year. although the reduction
In ocean rates was substantially more
than the increase in Inland rail ratss, :
so that the material decline In the
exports OF these commodities was In
the face OF a less aggregate cost or :
transportation.
Tho Case Of the Fruit Growers
The troubles Of the California :
,mon grower have attracted much :
ttention. He claims he is IN
Bile TO ship his product because =
( the increased freight rates. A :
emOval of all the recent increase !,
+ the rate on lemons would not =
clip him. He has a rate Dy sea :,
trough the Panama Canal Of less :,
nan half-4S per cent-of the =
all rate, yet his lemons are not =
The average price OF :;
cantaloupe laid down in New ::
ork in the season of 1920 was :,
OF quite If cents. A they were =
stailed al about % cents. there Z
a further profit TO somebody =.
Z "a cents per cantaloupe. The 4
managers of the propaganda for
general reduction OF freight =
ates have lost sight Of the fact =
lat in October. 1920. i,fe5,32i :
arloads Of coal were moved. be- =
IL the maximum moved in any -
onth in the preceding two years. !
Though il was handled at the
ivanced freight rates. and we y
ave heard nothing rs TO the coal !
sing produced At loss or Of the z
5Hl mine owners going out OF o.,