The Bingham County news. [volume] (Blackfoot, Idaho) 1918-1930, 1921-07-08
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

W dSlll4S ION, u. C.-ln testify
Ing before the senate Committee
on Interstate Commerce, Which Is
conducting an INQUIRY into the
railroad situation, JulluS krutt-
SCnnltL, Chairman Of the Board
OF the Southern Pacific Company,
went l..tO great detail as TO the
effect Of freight rates on produce
shipments, foreign and domestic.
Inc mann points he mace Ill this
part Of his testimony were: FIRST
That business depression is not
the result Of nlgn freight rates,
Oeconu-Ihat ire real cause or
StaSndtlOn III produce shipments
Is lack Of market or prOflteerlng
He SAID, i'll 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
far less than the toll taken by the
commission merchant and the re-
taller for buying and selling them.
Public Eaislec "a 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 ii 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-
tirely to general business cOndi-
lions that are world wide in their
effect, and that would have come
if there had been no advance in
freight rates. Prices of COM
modities 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 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 riot Caused by Higher Rates
1t was general deflatlOn and
fall in prices from the heights to
which they had been driven by
var conditions that has caused
stagnatlOn of business through
out the world. That it is not
caused by the cost of transpOrta-
ion is convincingly shown by the
fact that stOppage Of buying has
caused an oversupDly of ships,
hence ocean tonnage rates have
Oeen recently at the lowest points
n 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
commodities would not move even
if the freight charges on them
we're abolished entirely, because
producers can find no market.
That the decline in business is not
1ue to prohibitive freight rates is
shown by the following examples:
In January OF this year the total
tonnage Of lines west of Ell Paso and
Ogden operated by the Southern Pacific
Company FELL Off Al per cent. The
combined interstate freight tonnage
In Arizona and Nevada declined so per-
cen although no increase in the intra-
state freight rates in those states
p has been as yet authorized or made
effective. This decrease embraced
grain, hay and livestock, as well as
ores and other commodities.
Cotton UnsIiIppcd for Lack Of
Markets
OF 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 to Liverpool has been reduced
about st.2Sh per 400 pounds in the
face OF which about one half million
bales of cotton less than normal have
been exported to Liverpool. Obviously
the freight rate is not responsible for
the restricted movement. During
September, october, and November,
| 1920, as per cent less rice, 80 per
| cent less canned salmon, and II per
| cent less dried fruit were exported
| than during the same months of the
previous year. although the reduction
in ocean rates was substantially more
than the increase in inland rail rates,
| SO that the material decline in the
exports of these commodities was in
| the face of a less aggregate cost OF
transportation.
The Case Of the Fruit Growers
The troubles Of the California
emOn grower have attracted much
attention. He claims he is IN
able to ship his product because
of the increased freight rates. A
removal of all the recent increase
! of the rate on lemons would not
help him. He has a rate by sea
through the Panama Canal of less
than half-48 per cent-of the
rail rate, yet his lemons are not
marketed. The average price Of
a cantaloupe laid down in New
York in the season of 1920 was
not quite ii cents. AS they were
retailed at about 25 cents, there
is a further profit to somebody
of IA cents per cantaloupe. The
managers of the propaganda for
general reduction of freight
rates have lost sight Of the fact
that in October. 1920, 1,195, 32t
carloads of coal were moved, be-
4 inc the MAXIMUM moved in any