Imperial Valley press., 1921-07-18
TELLS
WHY ROADS
CAN'T CUT
RA TES
Lines Must Rehabilitate
Properties to Fully Meet
Conditions Before They
Are Able to Extend Help.

To get at the actual facts on which
the Southern Pacific company based
its recent refusal to grant reductions
in freight tariffs for the benefit par
ticularly of farmers and shippers of
food stuffs, Charles P. Bayer, Of no-
mona, president of the California As
sociation Of Commercial Secretaries,
(secretaries of chambers Of COM
merce and like Bodies" addressed
communication to G. w. Luce, freight
traffic. manager of the road, as fol
lows:
'In view of the widespread demand
that rai,2oad rates should~be .reduced/
l would appreciate statement FROM
you concerning the recent ~
ment of the railroads that Y
rates cannot be generally yeduv, zeS-
this time.
Farmers, shippers and other fe.,
that, with the recent reduction of Il
per cent in railway wages and lower
ing of commodity prices, the railroads
should hasten return to normal times
by making general reductions in their
rates.
"Is it not fact that high freight
rates are preventing products from
moving to market, thus adversely af-
fecting business ?" rs -
Mr.. Luce replied under date of July
Is, to President Bayer's letter setting
forth the reasons why the railroads
cannot make reductions in i freight
tariffs at the present time, despite the
recent reduction in wage scale ar
dered by the Federal labor board. His
communication in part is as follows:
There can be no general reduction
in freight rates at this time because,
with all the savings that the railroads.
can possibly make as result Of wage
reductions and other economies, they
can hope to earn only with greatest
difficulty the amount necessary to
meet their fixed charges for 1921. s
ut is to the interests Of the farmer
and shipper that the railroads should
have opportunity to rehabilitate their
properties so that they may give ade-
quate service in the future, particu-
larly when business revives. An in
crease in net earnings is necessary il
this is to be accomplished.
"Under government control the rail
roads were not permitted, as We're
oaher business enterprises, to fnakc
large profits and roll up big surplusses
on which they might draw during per-
iods of depression. They were re-
stricted to the same net return they
earned during the three years before
the United States entered the war.
Their properties were allowed to de-
teriorate. The number of freight cars
available actually decreased 10000
under government control. The re.
cent business depression has hit the
railroads as hard as any other class
of business. They must be permitted
to put their properties in good eondi-
ton and get upon their feet financial
ly If they are to meet fully the traffic
requirements when general business
improves. They cannot do this IL gen
eral reductions in rates are made at
this time.
If the railroads, by granting reduc-
tions, absorbed the loss in profits that
confront various interests today, the
carriers would be overwhelmed. The
railroads must first cure their own
weakened condition and establish them
selves fimly before they cen extend
help to those industries that are s1af-
fering from the general deprossion.
They cannot je0pardixe the counfxy's
transportation system in ordor 70
meet q temporary business emsresuey.
At the beginning Of federal eoatyet
!, in 1918 freight rates were sllgHtly
less than in 1900. Increase In fSSieht
rates were granted in June ,1olo, ~
again in the latter part of Auen6f,
1920, the two raises increasing fright
rates only SO per cent above those AZ
1900. In the meantime wages kAd
advanced to o level Of 2l0 poy ce1st
above those Of 1900. The result wos
that, when the 1920 increase fikfseieha