Okolona messenger. (Okolona, Miss.) 1900-current, 1921-05-26
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.
FARM PRODUCTS ARE CITED

| NaSninSlOni ~ C.--An teSJlIylng De
fore the Senate Committee on Inter
state Commerce, which Is conducting
an inquiry into the railroad situation
Julius Kruttschnltt. chairman Of tn
board of the Southern Pacific com
pany, went into great detail as to tn
effect of freight rates on produce ship
ments, foreign and domestic TIL,
main points he made In this part o
his testimony were:
Eirst-That business depression Il
not the result Of high freight rates.
Second-That the real cause Of stag
nation in produce shipments is IacI
Of market or profIteerInc.
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 MisIsd as 80 Situation
People, are misled and conclude that
high rates have stopped the movement
Of a large amount OF freight and that
the railways would make more money
If they would reduce the rates and
thereby revive the trafflc.
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
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 general defation and fall
in prices from the heights to which
they had been driven by war condi-
tons that has caused a stagnation Of
business throughout the world.
That it is not caused by the cost OF
Is conyincingly 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 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 prohibitiye freight rates Is
shown by the following examples:
In January of this year the total
SonHdSe Oh lines west OF FL PaSO ana
Ogden operated by the Southern Pa
cific Company fell OF Al per cent.
The combined lntrastate freight ton-
mage In Arizona and Nevada declined
the intrastate freight rates in Those
States has been as yet authorized
or made effective. This decrease eIn-
braced grain, hay and livestock, a.
COTTON, UNSHIPPED FOR rack
OF MARKETS
OF Texas cotton crop Of over four
million bales. 20 per cent remains un-
marketed. The average cost Of rail-
and water shipment from produclna
point to Liverpool has been reduced
spout $l.zsN per 100 pounds N the
bales Of cotton less than normal have
been exported to Liverpool Obviously
the freight rate 10 not responsible for
the restricted movement
During September, October ana
November, 1920, As per cent less rice.
80 per cent less canned salmon and
n per cent less dried fruit were ax-
ported than during the same months
Of the previous year, although the
reduction IN ocean rates WAS sub
etantlally more than the Increase n
Inland rail- rates, so that the material
decline in the exports of these come
nfodities was in the face of less ar.-
gregate cost OF transportation.
The Case Of the Fruit Growers
The troubles Of the California lemon
rover have attracted much attention.
lie claims he is unable to ship hts
roduct because of the Increased
reight rates. A removal Of an the
ecent increase of the rate on lemons
fould not help him. He has d rate by
ca through the Panama Canal 81 l6ss
han halls per cent-of the rdl
ate, yet his lemons are not marketed.
The average price Of a canfal0une
hid down In New York IN the season
1920 was not quite II cents AZ
hey were Rotated at about q cents
here is further profit to somebody
IA cents per caIithlolpe
The mana"ers OF the nropaeanda Tor
general reduction Of freight rates
ave lost sight OF The fact that in Oc-
5ber 1920 l,l052l carioaSs 81 COIL
ere moved he,Hg the naxsiagm ROY.
4 h ans MOT ii N the preceding tt.o
pars altlspegll aa lS. isel n; lie
avanced fseight raj = ara ~ !afc
aard n9thn3 as 10 roal heine Bro.
need e . loss or III flin ne.fl n,lnn
sners = ~ nrt sssrs e.s.,t,,.a
yle rcneee aa maalf
n