The New York herald., 1921-07-25
AXE SOON TO FALL
ON FREIGHT RATES
Harding and Advisers Turn
Their Attention to a Re-
vision Downward.
AGRICULTURE is HIT
Ruinous Rail Charges Blow
to Export Trade of
America.
FARMER SUFFERS MOST
Prohibitive Tariff Called Men
ace to Industry by Check
ing Production.
FARMER SUFFERS MOST

Special Despatch to THE New YORK HERALD.
New York Herald Bureau.
Washington, July "a.
With the important question of rail-
road finance and the rehabilitation of
the carriers as whole apparently
in a fair way to settlement through
agreement between the Administration
and the carriers, President Harding
and his advisers are giving attention
to revision downward of prohibitive
and-ruinous freight rates, particularly
on grains and other agricultural
staples.
Railroad freight rates on the great
food commodities of the United States
as we'll as cotton and other raw mate
rials, are entirely out of line with the
economic situation in the opinion of
the President and his chief advisers
on ths railroad problem. They are
paralyzl,1g the agricultural industry in
some conn Anunities and are everywhere
having a depressing influence.
Attention IS best focused on the stu
tary Of Agriculture Wallace that freight
rates on great staple grains are far
higher from central marketing points
in the United States to- the American sea-
board than the ocean freight rates from
the seaboard to the countries that under
favorable conditions buy American ex-
ports of foodstuffs and raw materials.
In some instances fruits are brought
from southern Europe to New YORK at
lower rates than they can be shipped
from the Pacific coast States. This con-
dition of affairs has been emphasized by
Secretary of Commerce Hoover, who
pioneered the movement for reduction In
rates on fruits, foods, vegetables, grain
and cotton. as absolutely essential to
normal revival of open trade.
Work Well Under Way.
In a perfectly open way, but without
attracting great public attention. the
President and his advisers, particularly
Secretaries Hoover and Wallace, have
been working hard on the problem. The
Interstate Commerce Commission has
been engaged on a programme OF fuu
cooperation.
Negotiations are under way between
the commission and the railroads to adj
Just many of the inequalities in such
rates which resulted from the increases
sponsored by william G. McAdoo, as Di-
rector-General of Railroads 1t was
these increases that made the cost of
shipping wheat from producing markets
at Kansas City and Chicago TO coast
points greater than the total rate from
Argentina and other producing countries
to European consumers.
Many adjustments have been made by
the commission and the carriers. but
> many more must be made IL the United
t, 20 at ne nnGiffnn a
large exporter of staple crops and food
stuffs.
Rates on fruits from California 70
Eastern markets have been lowered,
many grain and cattle rates have been
lowered, but the situation is such rs to
still be a serious impediment to the ex-
port trade of the United States. 1t is
eptomized in the statement from Sec
retary of Agriculture Wallace. who said
In part:
while the cost of ocean transporta-
ton is an essential factor in the market
ing of agricultural products In foreign
markets, II is by no means as 1mpor-
tant a factor as is the cost of rail
transportation to the seaboard. For
example the export lake and rail freight
rate on wheat from Duluth to New
York Is 28S cents a bushel, while the
ocean freight rate from New York TO
Liverpool is 1876 cents. making conn
bIned rate of Ala cents, of which the
lake and rail freight costs represent
69.6 per cent. The export rail rate from
Kansas City to Galveston is 81 cents
bushel, and the ocean freight from Gal
weston to the United Kingdom is Is
cents a bushel. a total OF ~ cents
bushel. of which the cost OF the inland
rail haul represents 64.3 per cent.
How Argentina Benefits.
"In this connection II is interesting
to compare these rates with the rail and
ocean freight rates to the United King
dom from the wheat producing centres
of Argentina, where the rate for trans
porting 1000 Kilograms (2,204.6 poundsl
Of wheat a distance Of 500 kilometers
C3106 miles) is s15.44 Argentine paper,
or 1872 cents bushel, calculated on the
basis of the prevailing rate of exchange.
The average rail haul in Argentina is
435 kilometers (261 miles).
"Argentine growers thus have an APP
parent advantage OF about IA cents q
bushel over the interior sections OF the
United States in cost OF transporting
their wheat to the seaboard. This adj
vantage, however is partly offset by in
creased ocean freight rates from Argen-
tina to the United Kingdom, which al
the present time are around 20 cents a
bushel. making a combined ocean and
rail rate Of 35.2 cents O bushel for Ar
gentine wheat"
The key TO the log jam in the present
industrial problem Is lower railroad
rates. in the opinion OF Secretary oi
Commerce Hoover He says high freight
rates are reacting dlsastrously on th'
American farmer at time when hi
own products are at rock bottom prices
and he is forced to sell often at n los.
if ne sells at all.
mot only the farmer is suffering by
rates that are unjustly high on many
commodities produced on the farms,
he said, but the consumer is made e
carry just that much more load besidei
the other burdens imposed by post wal
conditions.
although the farmer has accepted
losses greater than those In any othei
industrial group. he Is forced to pa!
freight rates out OF all proportion wher
the prices paid the farmer are consid
ered'
During the last year. Mr.. Hoover
pointed out. farmers everywhere have
been unable TO ship their commodities
because freight costs have exceeded the
prices they have received for their prod
ucts. This was true of the California
fruit products 1t Is true OF many other
classes Freight rates make profitable
shipment of commodties TO market al