The Richmond palladium and sun-telegram., 1922-05-24

\, anu (O1AoCAIuOO a S1OoIOA SNG
The commission in ordering the de-
creases-which are on a horizontal
basis-held that the nations railroads
are entitled to earn five and three
quarters percent on the value of their
property rather than the approximate
six percent fixed as a reasonable re-
turn under the transportation act of
1920
Other Rates Unchanged.
Transportation charges on passeng-
er travel and Pullman charges were
left unaffected by the decision.
Agricultural products will not be af-
fected by the reduction granted under
the commissions order today. The
reduction of 1914 percent made in the
western hay and grain rates last fall
and the voluntary 10 percent cut
made in all agricultural products by
railroads Jan. l will be substituted
for the decision on these commodities.
The commission in it's decision de-
clared a general reduction in rate
levels as substantial as the condi-
ton of the carrier will permit will
tend to stabilize conditions of all
business
Transportation charges have mount
ed to the point where they are i'm
pecing the free flow of commerce,
the commissions decision which or
dered a far greater reduction of rates
than had been anticipated in
any quarter, said, and are thus tend
ing the defeat of the purpose for
which they were establishd, that of
producing revenue which would en-
able the carriers to provide the peo-
pie of the United States with ade-
quate transportation.
Averages 10 Per Cent
Only two members of the board COM
missioners Lewis and Cox disented
holding that the adjustments should
have been made in commodity rates
rather than on a horizontal basis.
Chairman McChcrd and other com
missioners accepted this view in a
supplemental opinion concurring with
the majority.
In western territory the commits
sion ordered a cut of approximately
1872 per cent, and in the southern
and mountain Pacific groups approx
mately 13 Ito per cent. All erect
i've July 1.
The commissions rate cut was more
horizontally and a percentage OF
the general increases given to all
railroad rates in 1920.
Commissions Order
The order of the commission fixing
the new level of rates defined the
percentages of reduction as follows:
In the eastern group, also between
points in Illinois territory and between
Illinois territory and the eastern
n
per cent authorized in the decisions
last cited (the rate increases of 1920
In the western group and between
the western group and Illinois terri
tory, 81 $40 per cent instead of So pei
cent so authorized
In the southern and mountain Pa
cific groups. II 5-10 per cent instead
of 25 per cent so authorized.
On inter-territorial traffic except as
otherwise provided, 20 per cent in
stead OF 33 Is per cent so authorized
Separate Opinion
Commissioner Potter in a separate
opinion concurring with the majority
declared that the fixing of ''the per
centages mentioned, is in effect re
ouirement that present rates anC
charges shall, generally speaking, bt
reduced ten per cent-certain reduc
tions heretofore made to be treated
as part of such ten percent reduction.
The majority opinion revised the re
cent history of rate regulations anC
set forth summaries of argument
made by shippers In favor of redue
tions and carriers against reductions
1t expressed the conclusion that 'as
sumption that railroad rates can o
should be stabilized on the presen
high basis is futile"
The majority further said that 'un
I'll the public is convinced that ther
is little likelihood of immediate fur
ther materal reductions in prices o
transportation charges. conidenc
necessary to normal business will t
that extent be impaired"
Explaining the reason for adoptin
a horizonal method of reducing freigh
rates, the commission said that whi:
alterations in price levels had unequa
ly affected different commodities, 9Th
needs of commerce cannot be met
rates are to fuctuate with marke
prices of commodities. Its conclusio
was that reduction should be mad
generally upon all commodities i
substantially equal ratio"
In the matter of reasonable retur
the commission pointed out that unit
March l, 1922, railroads had bee
legally entitled to six percent annua
earnings on the aggregate value c
property used in transportation. TIL
sum was Fixed by the transportatio