The Democratic advocate. [volume] (Westminster, Md.) 1865-1972, 1921-05-20
GIVES 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.

aAIt Ni1 Gtihte NOiHIHllktt on litAcA~
state Commerce, which Is conducting
an inquiry into the railroad situation,
Julius Kruttschnitt, chairman OF the
board OF tile 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 lac made In this part OF
his testimony were:
FIpt--That business depression Is
not the result Of high freight rates.
second--Thst the real cause Of stag
nation In produce shipments is lack
Of market or profiteerina.
lie said, 10 part:
A widespread propaganda IA being
carried on 10 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 hy the commission mcr-
chant md the retailer for buying and
selling them.
Public Mlsied az 20 Situation
People are mislcd and conclude that
high rates hnye stopped tie movement
Of large amount Of freight aud that
the railways would make more money
n they would reduce the rates aud
thereby revive he traffic.
There Is the strongest reason 10 be.
lieve that the vefy great reduction IN
traffic hns been due almost entirely 10
general business conditions ihat are
worldwide Ia their effect. and that
would have cope Il there had been no
ndyani IN freigiit rates.
Prices ~ commodities reached their
maximum ia the hrat half IL ihe ycnr
1000 and thereafter fell with great
rapIdlty IN France, the United States
aud The United Kingdom The fall in
the United StHgs iegnu IN MAY. aBd
was rapidly 90 It's way downErnds In
September when the advanced rates
took effect Nevertheless traffic did
not drop Tor ~ least four mejifha.
slump Not Caused BY Higher Rates
!, VAS o general denatlon and fan
IN prices from the heights 20 which
they bad been driven by war condi-
lions that las caused q siagnation 81
business throughout The world
That h "a not casisesi Ny the cost ~
transportation n cuuylnclugly shown
by The fact ihat EioHpnrc % buying
has caused an uversuppiy ~ shlpa,
hence ocean tonnage rates have been
recently At the lowest points 10 their
history
Notwithstanding these iog rates,
ocean ifaihr shows a. great slagna.
ti1n ~ rail truffc. aud millions 81 tons
~ shipping here and abroad are rust.
ing away iu ldlencss Many eommOdi.
ties would not move even " the freight
charges on them were abolished en-.
ilrely, because producers eau fnd no
market
That the decline 30 business Is not
due 70 pfohibitlve freight rates Is
shown by the following examples:
iu January ~ this year The total
tonnage ~ lines vast % 81 phHn ard
ogden operated ~ the s5ufhefn IA
fiNo Company fsH on Is urH cent
The combined intfastats freight tom
haEe 10 Arizona and Nevada declined
o. pef cent although n0 increase iu
'bSs iHtraHiata freight rates in those
lHAtts has been Al yet authorized
ur made effective This decrease en-.
we'll a. ores and other rauimadltisS.
COTTON UhsHtPPEp FoH LAck
or MARKETS
~ Texas cotton crUb ~ over four
million haler 20 pef cent roinaius nn
marketed. The average cost 81 rail-
and water shipment from pfsaueina
point 70 Liverpool has been rsayesd
about si285s per 100 pounds, 81 The
faco % which about one half million
bales ~ cotton less than normal have
been rspuited 90 Liverpool obviously
M" ftelHht rate II not rcHp0nKibIs fur
the restricted movement
buunE September, October, aud
November, 1870 = per cent less rice,
90 pur cent icns canned salmon ana
~ pff cent less dfled mutt WsTe es-
ported than during the same months
OF the previous year although tile
rsoue,ion N ocean rates was sub
inland rail rates, - that the material
decline in the eAp8ria of thrHs COM
moditiss was ~ The face ~ = less az.
EreEate cost - trausporia ton
The Case Of the Fruit Growers
The troubles Of the California lemon
grower have attracted much attention.
lie claims he Is unable 10 ship his prod.
uct because OF the increased freight
rates A removal Of all the recent ia.
crease Of the rate on lemons would not
help him. He has a rate by sea through
the Panama Canal OF less than half
4s per cent-of the rail rate, yet his
lemons are not marketed.
The average price Of a canfaloupe
laid down IN New York IN tile season
OF 1920 was not quite II cents. As
they were retaled at about % cents.
there Is further profit to somebody
Of II cents per cantaloupe.
The managers OF the propaganda for
n general reduction Of freight rates
have lost sight 81 the fact that IN oc.
t0ber, 1920. l,195,3oi carloads OF conf
were moved, being the maximum NOV
ed In any month IN the preceding two
years, although II was handled OF the
advanced freight Iates, and we have
heard nothing MS TO coal being pro-
luced nj loss or Of the coal mine
owners going ont o. business because
of existing freight rates
The percentage Of freight charges
20 value In the early part OF 1927 Is
almost exactly the same as Il was III
1914
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