Iron County record. [volume] (Cedar City, Utah) 1893-1982, 1921-05-27
GIVES REASONS
FOR DEPRESSION
Railroad Chief Declares
Freight Charges Not the
Cause of Stagnation.
FARM PRODUCTS ARE CITED
Business Depressiona and Lack
OF Demand the Real Trouble


ing before The Senate Committee
on Interstate Commerce, which Is
conducting an inquiry INTO the
railroad situation, julius krutt-
sChnilt, Chairman OF the Board
OF the Southern Pacific Company,
went iItO great detail as TO the
effect Of freight rates on produce
shipments, foreign and domestic.
The nam points he made in this
part or his testimony were. First
That business depression is not
the result of nigh freight rates,
SeCOnd-IhaL the real cause OF
Btagnation III produce shipments
is lack of market or prOfltCerlng,
He said, In part: A widespread
propaganda rs 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 transporting commodities Is
far less than the toll taken by the
commission merchant and the re-
taller for buying and selling them.
Public Misled 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 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-
tions that are world wide in their
effect, aud that would have come
If there had been no advance III
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 Rates
II was a general deilatlon aud
fall in prices from the heights to
which they had been driven by
war conditions that has caused
q stagnation of business through
out the world. That 1t is not
caused by the cost of transporta-
ton is convlncingly shown by the
fact that stoppage OF buying has
caused an oyersupply OF ships,
hence ocean tonnage rates nave
been recently at the lowest points
in their history. Notwithstanding
these low rates, ocean tratllc
shows as great stagnatIQn as ran
traffic, and millions Of tons OF
shipping here and abroad are
rusting away in idleness. Many
commodities would not move even
il the freight charges on them
we're abolished entirely, because
producers can find no market.
That the decline in business is moi
due to prohibitive freight rates is
shown by the following examples:
In January OF this year the total
tonnage or lines west OF III Paso ana
Ogden operated by the southern Pacific
Company fell Off Al per cent. The
combined interstate freight tonnage
in Arizona and Nevada declined so per
cent although no increase In the mira
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 Lack or
Markets
or a Texas cotton crop OF over four
million bales 40 per cent remains I'M
marketed The average cost or rau
and water shipment from producing
point 10 Liverpool has been reduced
about si2s1s per 100 pounds In the
face or which about half million
bales OF cotton less than normal nave
been exported 10 Liverpool. obviously
the FIRE ght rate Is not responsible Tor
the restricted movement. During
September, october, and November,
1920, 45 per cent less rice. 30 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 Callfornlt
lemon grower have attracted muci
attention He claims he Is un
able to ship his product becaus
of the increased freight rates.
removal of all the recent increas
Of the rate on lemons would no
help him. He has rate by SCI
through the Panama Canal Of les
than half-IS per cent-of tn
rail rate, yet his lemons are no
marketed. The average price. o
cantaloupe laid down in NeN
York in the season of 1920 wa
not quite / cents AS they wer
retaiied at about % cents, ther
is further profit TO somebod
OF IA cents per cantaloupe, Tn
managers Of the propaganda 70
general reduction Of freigt
rates have lost sight Of the faC
that in October. 1920 ii95,32
carloads Of coal were moved, ht
ing The maximum moved in an
month in the preceding two year
although it was handled at tn
advanced freight rates, and "
have heard nothing as 10 the co;
A. 4