Cleveland County herald., 1921-05-26
CI.ES 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.

| state Commerce, WnlCn IS conducting an inquiry Into the railroad situation, Julius Kruttschnitt, 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 ls not the reeuIt of high freight rates.
 second-That the real cause of stag nation In produce shipments Is lack of market or profiteerlnq.
 He said, in part .. ..,. .--ss'-. s'sa,'- A widespread bFopaganda is being carried on to arouse public sentiment against existing freight rates, whereas the fact is that even since the rates 1 have besetb adva1hiceed the cost of ffrahs- porting commodities is far less than the toll taken by the commission mer- chant and the retailer for buying and selling them,
 Public Mlsled as to 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 traffic.
 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 advand9 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 1 the United States began in May, and was rapidly on it's way downgrade in 1 September, when the advanced rates took effect. Nevertheless traffic did not drop for at least four months.
 Slump Not Caused by Higher Rates
 It was general deflation and fall Tn prices from the heights to which they had been driven by war condi- tions that has caused a stagnation of l business throughout the world. | That it is not caused by the cost of l transportation is convincingly shown by the fact that stoppage of buying has caused an oyersupply 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 prohibitive freight rates Is shown by the following examples:
 In January of this year the total
 tonnage of lines west of El Paso and ogden operated by the Southern Pa
 cific Company fell off Il per cent.
 The combined ntrastate freight tom mage in Arizona and Nevada declined | 50 per cent although no increase in | the intrastate freight rates in those SldleS illus pGtH dS yet dQlnOFlZeu
 or made effective. This decrease em- braced grain, hay and livestock as
 W Wel! as ores \, and 2 15 ether eommodties onn | OF MARKETS
 Of a Texas cotton crop of over four
 million bales, 40 per cent remains un-
 and water shipment from producing
 point to Liverpool has been reduced
 about $1.2sE per 100 pounds, in the h9laS of cotton less than a been exported to Liverpool Obviously 1 the freight rate is not responsible for the restricted movement.
 During September, October and November, 1920 45 per cent less rice, 50 per cent less canned salmon and | IT per cent less dried fruit were ex- ported than during the same months of the previous year, although the reduction In ocean rates was sub stantially. more than the increase in Inland rall rates, so that the material decline in the exports of these com modities was in the face of less az gregate cost of transportation.
 The Case of the Fruit Growers
 The troubles of the California lemon grower have attracted much attention. He claims he is unable to ship his prod uct because of the increased freight rates removal of all the recent in- crease of the rate on lemons would not iCIp Hill. liC lleto q lcitt DN SSd lOIOuSU the Panama Canal of less than half i AS 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 1 of 1920 was not quite II cents. As they were retailed at about 9 cents. there is 6 further profit to somebody of II cents per cantaloupe. The managers of the propaganda for Il general reduction of freight rates have lost sight of the fact that in Oe- tober. 1920, 1,195,321 carloads of coal ! were moved being the maximum nov ed in any month in the preceding two years although it was handled at the ! advanced freight lates, and we have heard nothing as to ccal being pro- 1 duced at a joss or of the coal mine | owners gong out of business because ,i e,X sing freight rates
 The percentage of freight charges 5o value in the early part of 1921 is most eXactly the same as t was in ial4