Mountain Home Republican. [volume] (Mountain Home, Idaho) 1915-1946, 1921-05-21
lives REASONS
FOR DEPRESSION
railroad Chief Declares
Freight Charges Not the
Cause of Stagnation.
ARM PRODUCTS ARE CITED
BUSINESS Depression and Lack
If Demand the Real Trouble

BUSINESS Depression and Lack
IF Demand the Real Trouble
Washington, ID. C.-In testify
ug before the Senate Committee
IN Interstate Commerce, which is
Onductlng an inquiry into the
abroad situation, julius Krutt-
schnltt, Chairman of the Board
i the Southern Pacific Company,
vent into great detail as to the
fleet OF freight rates on produce
shipments, foreign and domestic
The main points be made in this
part OF his testimony were: First
That business depression is not
he result OF high freight rates;
oocond-That the real cause OF
stagnatlon In produce shipments
) lack of market or profiteering
lie said, In part. A widespread
propaganda is being carried on
20 arouse public sentiment against
Existing freight rates, whereas
The fact is that even since the
rates have been advanced the cost
Or transporting commodities is
far less than the toll taken by the
commission merchant and the re-
taller for buying and selling them.
Public Mlsied 40 TO SituatIon
People are misled and conclude
that high rates have stopped the
movement Of large amount Of
freight and that the railways
would make more money if 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 oondl-
tons 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
rapidly 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 NOT Caused by Higher hates
1t was general deflatlon and
fall in prices from the heights to
which they had been driven by
war conditions that has caused
stagnation of business through
out the. world. That 1t Is not
caused by the cost of transporta-
ton is convincingly shown by the
fact that stoppage Of buying mas
caused an oversupDly OF snlps,
hence ocean tonnage rates have
been recently at the lowest points
in their history. Notwithstanding
these low rates, ocean traffic
shows as great stagnation as ran
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
due to prohibitive freight rates is
shown by the following examples;
In January Of this year Ihe lotai
tonnage OF lines west OF FL Paso ana
ogden operated by the Southern Pacific
| Company fell off Al per cent fhe
combined interstate freight tonnage
| I'm Arizona and Nevada declined 90 per
cent although no increase In the lhIra-
state freight rates In those states
| has been as yet authorized or MADE
effective. This decrease embraced
grain. hay and livestock, as well as
! ores and other commodities.
Cotton UnshIpped for LaoR or
| Markets.
! or Texas cotton crop Of over four
million bales, 40 per cent remains I'M
! marketed. The average cost OF ran
| and water shipment from producing
| point 10 Liverpool has been reduced
about si.2Sh per 100 pounds In the
| race of which about one-half million
| bales of cotton less than normal have
been exported to Liverpool obviously
| the freight rate is not responsible fof
| the restricted movement Duflng
sentember. october, and November,
| 1920. as per cent less rice, so 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,
60 maj the material decline In the
exports OF these commodities was III
mo roce nr less aggregate cost OF
transportation.
Tho Case of the Fruit Growers
The, troubles of the California
lemon grower have attracted much
attention. He claims he S un-
able to ship his product ! cause
Iof the increased freight rates. A
removal of all the recent increase
of the rate on lemons would not
helm him. He has a rate by sea
through the Panama Canal OF less
Than half-48 per cent-of the
rail rate. vet his lemons are not
marketed. The average price OF
cantaloupe laid down IN New
York in the season of 1921 was
not unite ii cents. AS they were
retaiied at about 25 cents, there
is further profit to somebody
Of ia cents per oantaloupe. The
managers of the propaganda for
general reduction of freight
rates have lost sight of the fact
Thai in October, 1920, t,t95,32f
carloads Of coal were moved, be-
ing the maximum moved In any
month In the preceding two years
although 1t was handled at the
advanced freight rates, and we