The Rice belt journal., 1921-06-18
Rail- Chief Declares Freight
Charges Not the Cause
Of stagnation.
FARM PRODUCTS ARE CITED
Business Depression and Lack Of
Demand the Real Trouble.

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 we're:
First-That business depression u
not the result Of high freight rates.
second-That the real cause OF stag
nation In produce shipments 10 lack
Of market or profiteerIno.
He said In part:
A widespread propaganda 10 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 OF trans
porting commodities is far less than
the toll taken by the commission n1er'
chant and the retailer for buying and
selling them.
Public MIsled 40 70 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
II they would reduce the rates and
! thereby revive the traffic.
There Is the strongest reason TO De-
lleve that the very great reduction IN
traffic has been due almost entirely 10
general business conditions that are
worldwide In their effect, and that
would have come If there had been no
advance 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
the United States began In May, and
was rapidly on its way downgrade IN
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 q general dehation and fall
In prices from the heights to which
they had been driven by war condi.
tions that has caused stagnation ct
business throughout the world.
That 1t Is not caused by the cost OF
transportation is convincingly shown
by the fact that stoppage of buying
has caused an oversupply 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-
tion 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 II the freight
charges on them were abolished en-
tirely, because producers can find NO
market
That the decline In business ls not
due to prohibitive freight rates 10
shown by the following examples:
In January of this year the total
tonnage Of lines west Of m PAao and
Ogden operated by the Southern Pa.
eifo Company fell of " per cent.
mage In Arizona and Nevada declined
80 per cent although no increase IN
the intrastate freight rates In thoaa
States has been 40 yet authorized
or made effective. This decrease eFn.
braced grain, hay and livestock. as
wei as ores and other commodities.
COTTON oNsH1PskR oE MpskRre soR LACK
Of Texas cotton crop Of over four
million bales, 40 per cent remains un.
marketed. The average ooaS OF ralI
and water shipment from preauelaa
peint to Liverpsoi has been reduced
about St.2sN per 100 psunde, In the
face OF which about ons-haR million
bales OF cotton less than norNAai have
been exported to Liverpool. Obviously
the freight rate is not responsible for
the restricted movement,
During September, October, and
November, 1920, Is per gent less riOe,
30 per cent less canned salmon and
n per cent less dried fruit were ex-
Of the previous year, although the
reduction In ocean rates was suh.
Stantlaly more than the lnerease In
ln'ano raiI rates, 30 that the material
decline In the exports Of these com.
modities was In the face Of less az
Eregats cost Of transportation.
The Case Of the Fruit orewsrs
The troubles Of the California lemon
grower have attracted much attention
He claims he is unable 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 legs
than half-4S per cent-of the rail
rate, yet his lemons are not marketed,
The average price Of a cantaloups
laid down in New York In the season
OF 1920 was not quite IL cents. Al
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 oe.
tober, 1920, 1,1e5,821 carloads Of coal
were moved, being the maximum NOV.
ed In any month In the preceding two
years, although 1t was handled al the
advanced freight rates, and we have
heard nothing as to coal being pro.
duced at loss or of the coal mine
owners going out Of business because
Of existing freight rates. t.a
The percentage OF freight CHARGES
to value in the early part OF 1921 Is
almost exactly the same as 1t was IN
1914.
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