New-York tribune., 1922-05-25
Decision of I. C.. E.. Esti.
mated 10 Mean Yearly
Saving of 400 Millions
Paid TO the Railroad.
All Classes Of
Goods Affected
Lines Given Until Nav
81 to Signify Whether
They Will Voluntarily
Rearrange Schedules

WASHINGTON. May 24.-Rail-
road freight rates win be reduced on
July by amounts equal TO 10 per
cent of their present levels, under a
decision of the Interstate Commerce
commission, announced to-day. Prac-
tically all classes and commoditie,
Of traffic are affected by the decision,
which marked the conclusion Of az
investigation begun last autumn, or
the commissions own initiative. into
The reasonableness of existing freight
levels.
Agricultural products in all sec
tons Of the country outside Of New
England; livestock and Western
grain and grain products. are the
chief commodities excluded from The
reduction, these comprising the
freight classifications upon which re-
ductions have been recently put into
effect. Passenger charges and Pull
man fares also are left unchanged b.
to-day's decision.
With its decision on rates the COR
mission announced also its determine
tion of 5.75 per cent as the asorab.e
annual return which carriers in III.
future viii be entitled to earn on tlae!r
actual capital investment This com
pares with 6 per cent. the reasonable
return level fixed under the transporta
tion act for the period expiring March /.
Must Answer by May 81
Railroads we're required TO sign!ty
whether they would voluntarily make
new schedules complying with the do
cision or require the commission 20
issue its formal and detailed order for
the alteration Though divergence in
view within Tire commission was indi-
Gated by several supplemental concur
ring or dissenting opinions, the fuil
weight Of the commission appeared to
be thrown behind the statement made
in the majority and controlling opinion
that general reduction in the rate
level as substantial. as the condition o.
the carriers will permit will terd 70
stabilize the conditions under which
commerce and industry are carried or,
with consequent fuller assurance &c
carriers Of realizing a fair return
On the statment of the commission
that rail freight revenues in 1921 az
proximated S4,000,000, 600. to-day's de-
cision will reduce the national freig igfr
bill by $40O, ,000,0 . year.
Arrangement by Schedule
As stated in technical language. 20
the railroads the commission said tina.
after July / il would hold unreasonable
rates "including more than the follow
| ing percentages of increase over th5
rates in effect imm ediately prior to
| August 26. 1920 and set ND the terr.
torial schedules as follows:
''In the Eastern group, also betreen r
points in Illinois. territory and between
| Illinois territory and the Easter.
group 26 per cent instead Of the 40 p
cent authorized in the decisions las
cited Increased rates Of 1920.
"In the Western group and bctwecH
the Western group and Illinois terry
tory. 21.5 per cent. instead of the ~
per cent so authorized
an the Southern and Mountain Pc
cifc groups, 12.o per cent lnstead Of the
% per cent so authorized
"On inter territorial traffic, except .,
otherwise provided herein. 20 per ceD
instead of the 33 Is per cent so auth-
/ orized"
Commissioner Potter in concurrirs: ::
decision pointed out that the percent
age reductions so defined are "in effect
q requirement that present rates aud
charges shall, generally speaking, bs
reduced 10 per cent
Follows Harding's View
The commission. after reviewing th.
arguments for and against rate reduc-
ticns as made before it by shippers
railroads and representatives OF geo
graphica areas OF the country. declare
that as rates had been pushed up b.
horizontal percentage increases ~
similar process should be followed" in
bringing them down 'to meet lowere j
expenses of operation" This coin
cided with the arguments which Pres
dent Harding advanced before rail-,
road executives at dinner conference
last week in favor Of rates reductions
affecting sharply basic commodities
but leaving untouched existing raes
on high priced finished comm oditics
1t was chiefly on this point that sup
Elemental and dissenting opinions were
fled. Chairman McChord and Com.
missioners Lewis and Cox advocated
sharper commodity reductions. rathe,
than the horizontal cuts decided upor
by the majority. Mr.. McChord like
wise dissented to the 5.75 per cent fai,
return commission, while Commission
er Potter suggested also reductions ir
passenger rates.
Stable Basis Sought
practically all agree that stabilit>
of freight rates is highly desirable.
the majority opinion declared, "anc
that normal traffic may not we'll be ex
pected until the present widespread cx
pectation of rate reductions is realized
or dispelled To assume that rates c,,,
or should be stabilized on the presen
high basis is futile
} In discussing the fixing of SIS pc
cent as fair return standard the com
mission also observed that the Fedora
corporation income taxes are sub
tracted from earnings before profit
~ fd nd thnt he figure IL 50
-.:fien