The New York herald., 1922-05-25
FREIGHT RATES CUT
tenth TOBRING
| NORMAL CONDITIONS
Commerce Board Ruling
Affects Nearly All Classes
and Commodities.
5.'5 P. C. RETURN FIXED
Order Made Effective July l
and Roads to Answer
by May 81.
FARM PRODUCTS EXEMPT
Passenger and Pullman Tariffs
Unchanged-Commission
Divided on Methods.
FARM PRODUCTS EXEMPT


WASHINGTON. May "a. = Railroad
freight rates will be reduced on July /
by amounts equal to 10 per cent. of
their present levels under a decision
Of the Interstate Commerce Commits
sion. announced to-day
Practically all classes and COM
modities of traffic are affected by the
decision, which marked the close Of
the investigation begun last autumn
by the commission on its own initia-
tive into the reasonableness of ex-
isting freight levels.
Agricultural products in all sections
outside of New England, live stock
and Western grain and grain products
are the chief commodities excluded
from the reduction, these comprising
reductions have been put into effect.
Passenger charges and Pullman fares
also are left unchanged by the de-
cision.
Reasonable Annual Return.
With its decision on rates. the COM
mission announced also its determina-
ton of $40 per cent. as the reasonable
annual return which carriers In the
future will be entitled to earn on their
actual capital investment. This COM
pares with per cent, the reasonable
return level fixed under the transporta-
tion act fer the period expiring March l.
Railroads were required to signify tc
the commission before May 81 whether
ithey would voluntarily make new sched-
ules complying with the decision or re-
quire the commission to issue its formal
and detailed order for the alteration.
Though divergence In view with the
commission was indicated by several
supplemental concurring or dissenting
opinions. the full weight Of the commits
sion appeared to be thrown behind the
statement made in the majority and
controlling opinion that general reduc-
ton in the rate level as substantial as
the condition OF the carriers will permit
will tend to stabilize the conditions
under which commerce and industry are
carried on, with consequent fuller assur-
ance to carriers of realizing fair re-
turn
Reduction of Freight Bill.
On the statement Of the commission
that rail freight revenues In 1921 ap-
proximated $4,000, 900, 900. to-day's de-
cision would reduce the national freight
bill by 3400.0o0,000 a year, provided the
~
as then, which executives say they are
not. Estimates made in some quarters
here placed the actual loss of revenue to
the roads at about s225.0oO,0o
AS stated In technical language to the
railroads, the commission said that after
July l II would hold unreasonable rates
Including more than the following per-
centages Of increase over the rates In
effect Immediately prior to August 26
1920" and set up the territorial sched-
ules as follows:
In the eastern group, also between
points In Illinois territory and between
Illinois territory and the eastern
group, 26 per cent. instead of the 40
per cent authorized In the decisions
last cited Cnreased rates of 1900.
In the western group and between
the western group and Illinois terri
tory, Zl.O per cent. lnstedu Oh the 80
per cent so authorized.
In the southern and mountain Paci-
nc groups. 1875 per cent. instead of the
20 per cent. so authorized.
On inter-territorial traffic, except as
otherwise provided herein, 20 per cent.
instead OF the 33 1-3 per cent. so au-
thorized.
Commissioner Potter. in concurrine
decision. pointed out that the percentage
reductions so defined are 'in effect VI
requirement that present rates and
charges shall, generally speaking, be re-
duced 10 per cent"
For Hori.onnI Lowering.
The commission after reviewing tho
arguments for and against rate rcduc.
tions as made before IL by shippers, rail.
roads and representatives of geograph.
ical areas OF the country. declared that
as rates had been pushed up by horizon.
| tai percentage increases "a similar proc
ess should be followed" in bringing then
down ito meet lowered expenses OF OPP
eration."
The arguments which President Har-
ding advanced before railroad executives
at a dinner conference last week were
in favor OF rate reductions affecting
sharply basic commodities but leaving
untouched existing rates on high priced
finished commodities which generally
take class rates.
1t was chiefly on this point that sup
Elemental and dissenting opinions were
filed. Chairman McChord and Commits
sIoners Lewis and Cox advocated sharper
commodity reductions. rather than the
horizontal fashion cuts decided upon by
the majority.
Mr.. McChord likewise dissented to the
5.75 per cent fair return provision while
Commissioner Potter suggested also re-
ductions In passenger rates.
practically all agree that stability
Of freight rates is highly desirable" the
majority opinion declared, 'and that
normal trafic may not we'll be ex-
pected until the present widespread
expectations of rate reductions Is real
lied or dispelled. To assume that rates