The Washington times., 1922-03-16

for the Southern Pacific Re-
the Interstate Commerce Co
its rate inquiry.
In presenting his arguments for the
carriers Mr.. Wood urged the com.
mission not to make any further re-
auctions In freight rates until there
has been . further liquidation Of
operating expenses. owing to the
financial conditions Of the railroads
throughout the United States.
WIN Hurt Credit.
''No greater blow" he said Ito the
credit Of carriers. to the Improvement
Of transportation facilities or to
. renewed purchasing power upon
the part of the carriers an an i'm
petus to industrial activity, could be
imagined than an order by this com.
mission whereby q general reduction
In rates Is ordered. either as . whole
Or upon any substantial volume Of
traffic; whether upon the theory that
business would be thereby stimulated,
Or through the medium Of a reduced
authorized rate of return. Tie main.
tenance even of present earnings and
Of the present upward tendency is In.
volved In much doubt and uncer-
tainty. ''.
The credit and financial position
Of the carriers has been maintained
during this period largely through
The hope of better conditions in the
future, and II Is inconceivable that
In the face Of the actual results of
operation for the past six months
and the computations made In the
constructive year the commission
VIII, by reason of the slight increase
which these figures show over the
sixteen months period as q whole,
find 1t either lawful or expedient to
neutralize the slight Improvement
which has already taken place by
rate reductions, seriously affecting
net earnings. Furthermore. when the
fiRures for the month of January.
1892, the first month which reflects
tho cumulative effect of rate, wage
and price reductions. are taken into
account the utter unwisdom, not to
cay illegality. Of orders reducing
rates becomes manifest.
Condition Critical. ..'..
Mr.. Wood said that with due
allowance for deferred maintenance
the present net earnings as well as
prospective earnings indicate that
the position Of the carriers Is sub
stantially as perilous as that which
continued through 1921 and little less
critical than at the termination of
Federal control"
amount Of money represented by re-
ductions made since 1920 in whole
sale prices Ia fifteen times a. great
~ the aggregate advance in freight
rates made by the commission In it's
order effective August rs. 1920. but
said that the lower price level had
not stimulated demand which re-
mains stasnant. .trr.
ITO suggest" said Mr.. Wood that
the relatively small further reduction
in prices. which might, but probably
would not follow a reduction In rates,
would have this effect is to assume
the incredible and to shut the eyes
TO the fundamental causes of busi.
ness depression" e x.
Bickls Against Reduction.
In opening for the railroads the
argument before the interstate
Commerce Commission in tho rate
Investigation case, Henry Wolf
Bickle, assistant general counsel OF
the Pennsylvania Railroad Com
pany, speaking on behalf of the
Eastern carriers, stated that these
carriers were unanimous In the
belief that no general reductions in
rates should be made at this time.
He said that the economic situa-
ton now confronting the country
has a wider basis than the rates
and fares Of the railroads; that H.
10 the result of the dislocation OF
industry and the destruction Of
values produced by the world war;
that until this dislocation is cor
rected and new values created by
productive effort, real prosperity
cannot return; that this return will
necessarily be gradual, and that any
effort to accelerate II artificially
by striking at the transportation
industry would produce reactions
which would defeat the very pur-
pose intended to be accomplished.
Mr.. Bickle asserted that the COM
missions finding in 1920 as to the
aggregate value OF the Eastern
carriers property indicated that
they earned. during 1921. only 80
per cent as against the per cent
TO which they were entitled under
the law; that or the last six months
Of 1921 their earnings were only
AS as contrasted with the per
cent to which they were entitled
under the law; that while expenses
Of operation have been to some
extent diminished, they have not
been diminished to such an extent
as to permit further general reduc-