Evening star., 1921-10-22
Decision to Cover
Wide Scope in
Rail Problem.
REDUCTIONS TAKE
EFFECT AT ONCE
One-Half of Increases
Given in 1920 Or
dered Removed.


In a sweeping decision involving the
eptire railroad situation. wage scales
depression in industry and hnances' Tue
Interstate Commerce Commission tooa!
ordered the freight rates on grain' grain
products and hay throughout the west
ern half of the United States reduced
Nv an average of approximately 16 per
cent.
Notice was given the carriers that the
commission expected the reductions 70
be put into effect Immediately. and py
November 20 at the latest, and that
tho low state of railroad earnings,
which led to the increases in 1920,
should hereafter be rectif1ed by reduc-
tfcns in wages and prices and that
downward tendency should be set 1or
theiI rates.
Rendered Because Of Appeals.
ANTICIPATED by statements in official
quarters bearing upon the strike call
@: the railroad brotherhoods. the de-
cision was rendered in the case brought
to the commission September Ds
tventy-four western state and agrcui-
1ural organizations. The commission
unanimously held with the states pc
Iiiioas for reductions, though conced-
ing the difficult financial situation OF
the railroads.
The decision removes from wheat
and hay one-half of the increases given
the railroads in 1920 and on all other
grains fixes rates at 10 per cent less
than those on wheat. The commits
sion further ordered a new relation
ship built up in the rates on grain
products. including flour and other
commodities, to agree with the lower
level on the. raw material. Ihe IN
creaSes given in 1920 gave the carriers
a 35 per cent advance in the Mississip-
pi valley and western territory. 20
per cent advance within the mountain
and Pacific territory and SO 1s per cent
advance on commodities moving across
the division line. of which half is now
taken away. '-~-.---s-s--
Speak for Basic Industry.
Summarizing the situation before
u.s." the commission said. the petit
TONERS speak for a iasic industry
shows is in state of financial pros
tration, receiving for its products
prices which approach and in some
cases have fallen below pre-war
levels, but paying transportation costs
many of which are still at the war
time peak. On the other hand, the
evidence shows with equal clarity
that the respondents (the railroads)
are likewise suffering from financial
depression and that their net earn
ings have been far below the stand
ard which has been fixed by the law,
although the tendency is now up
ward"
Points to Boards Decision.
Dealing with the railroad financial
situation. however, the commission
pointed to the Railroad Labor Board S
decision of last July reducing wages
about IL per cent. and to certain
changes in labor rules and working
conditions accomplished by the labor
board which have lessened expense to
the carriers. These. the commission
estimates, will produce a saving of
about $425. 900 900 per year The COM
mission also declared that the cost of
important commodities. which enter
largely into the operating expense ac-
count of the carriers. had decreased,
although not vet reflected as COM
pletely in operating expenditures as
must occur. because term contracts
for supplies. entered into at high
price levels, still are holding expenses
to levels which must be accepted as
abnormal. The commission said there
also was every indication that the
volume of traffic was on an increas-
ing curve. This is evidenced by steady
increase in the number of carloads
of revenue freight and the reduction
In the number of surplus cars"
Rate Requirements Discussed.
The commission discussed the re-
quirement upon it by law to give the
railroads in rates per cent return
upon property used in transportation.
but remarked that the August earn
ings of western roads. if maintained
throughout the year, would give CAT
per cent, and That maintenance ex-
penditures were mot subnormal."
at is plainly our duty to do every
thing in our power to carry out this
purpose" the commission said, in dis
cusSing the per cent return provi-
sion and the railroads failure to Sc
cure it during the last year.
The experience of the past twelve
months, however. has shown the limi-
tations which surround in actual
practice this provision of the law.
1t does not constitute a guarantee to
the carriers, nor is the obligation
cumulative. What is contemplated by
the law is that i'll this exercise of
our rate-making power the results
shall reflect our best judgment as to
the basis which may reasonably be
expected for the future to yield the
prescribed return.
Forces Cited at Length.
At length the commission discussed
the forces working to lower the
TRANSPORTATION rate level.
Tine TACT tudl
charges are still levied at the war
time peak -" are cause of dis
coura cement to the producer, who has
been unable to maintain his prices
and to the employe. who has expert
enced reduction of wages" the COM
mission said.
The really vital concern of the
carriers in this situation is to promote
the return of what may be deemed
normal traffic. and anything which
will helD toward this end is greatly
TO their benefit. So far as a tendency
downward in their rates can be in
duced, and so far as tie reductions in
wages and prices which have already
been made effective can be converted
into rate, reductions. we are assured
that the full return of prosperity will
be hastened for both industry and
labor. The carriers have. we feel.
themselves manifested a realization
of this fact in the substantial reduc-
tions in rates which they kave volun-
tarily made"
Eastern Rates to Be Affected.
In passing upon the technical de-
tails of the reductions ordered the
commission noted that rates in the
eastern district would be affected and
that further proceedings and orders
would be necessary to control these.
The membership of the commission
was unanimous rs to the action taken.