Jackson County sentinel. (Gainesboro, Tenn.) 1914-current, 1921-06-16
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

! Washington, u. C.--In testifying be-
fore the Senate Committee on Inter
1 state Commerce, which is conducting
an inquiry into the railroad situation,
julius Kruttschnltt 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 the result OF high freight rates.
Second-That the real cause Of staR.
nation in produce shipments 10 lack
Of market or proftesring.
He said in part:
A widespread propaganda Is being
carried on 10 arouse public sentiment
against existing freight rates, whereas
The fact ls 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 aud 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-
lieye that the very great reduction In
traffic has been due almost entirely to
general business conditions that are
world wide 10 their effect. and that
would have come II 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
rapldity 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
II was n general denation and fair
In prices from the heights to which
they had been driven by war condi-
ti0ns that has caused a stagnation Of
business throughout the world
That II Is not caused by the cost Of
transportation is conylncingly shown
by the fact that stoppage OF buying
has caused an oyersupply of ships,
hence ocean tonnage rates have been
recently NJ 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 cemmodi-
ties would not move even II the freight
charges on them were abolished en-
Ni'iH' ''NadSe PiVuHtit Nuu Huu no
market.
That the decline In business is not
due to prohibltive freight rates is
shown by the following examples:
ln January OF this year the total
tonnage Of lines west OF FL Paso and
Ogden opsrated by the Southern Pa
cific Company FELL OF IL per cent.
The combined lntraststs freight ton.
mage In Arizona and Nevada declined
80 per cent although no increase In
the intrastste freight rates in those
states has been as yet authorized
braced grain. hay and livestock, a.
well as ores and other commodftiea
COTTON UNsHlPPED FOR LACK
OF MARKETS
OF a Texas cotton crop Of over fouf
million bales, 10 Per cent remains un-
marketed. The average cost Of rail
and wster shipment from produeins
point to livsrpsel has been reduced
about slzsls Der 100 pounds, ia the
race OF which about one half million
bales OF cotton less than normal have
been exported 10 Liverpool Obviously
the freight rate 10 not responsible for
the restricted movement
During september. October. and
November. 1929. Is per cent les, rIcs-
~ per cent less canned salmon and
u per cent less dried fruit were ex.
ported than during the same mouths
OF the previous year. although he
reduction In ocean rates was tvb.
Gsntislty more than the Increase Ia
Inland rah rates, so that the material
decline N the exports of these com
noditles was iu the lace ~ a less az
greats eost ~ transportation
The Case Of the Fruit Grower
The troubles II the California lemon
Trower have attracted much attention.
He claims he j. unable 10 shin his
'roduci because Of The Increased
'reight rates. \ removal II all the
'ecent Increase OF the rate an lemons
would not help him ~ has rate ~
Ies through the 'araua Canal 81 less
han half Is -. esu'-uf lh. rain
ate yet his lemorS ar- ie' taaraete.l.
The a,era@e nr!rr ~ rantalea,sx
ali dow n Nr, Fnss fr p es.aa
Y ~" - -
continued to page 81