New Britain herald., 1922-05-24
To Stabilize Business.

clared a general reduction in rate levels "as substantial as the condition of the carrier will permit will tend to stabilize conditions" of all business
 Transportation charges have mounted to the point where they arc impeding the free flow of com- merce," the commissions decision which ordered far greater reduction of rates than had been anticipated in any quarter, said, "and thus tending the defeat of the purpose for which they were established, that of pro- ducing revenue which would enable the carriers to provide the people of the United States with adequate trans portation."
 Passenger rates and Pullman car surcharges were left unaffected by the decision, which applied to freight rates exclusively.
 Two Members Disagree.
 The cut averaged approximately an actual 10 per cent. decrease in rates Only two members of the board, Com- missioners Lewis and Cox, dissented, holding that the adjustments should have been made in commodity rates rather than on horizontal basis
 Chairman McChord and other com- missioners accepted this view in a supplemental opinion concurring with the majority. *,-
 The order of tthe 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 be- tween Illinois territory and the east ern group 2e per cent instead of the 40 per cent authorized in the de- cisions last cited (the rate increases of 1920)
 In West and South.
 Tn the western group and between the western group and Illinois terri tory, 21 5-1O per cent. instead of the S5 per cent. so authorized.
 Tn the southern and mountain Pacific groups 2k instead of the 2S per cent so authorized.
 On territorial traffic except as otherwise provided herein 20 per cent instead of the s 1-3 per cent. so au- thorized.
 Agricultural products will not be affected by the reduction granted under the commissions order today. The reduction of 1617 per cent. made in the western hay and grain rates last fall and the voluntary 10 per cent. cut made in all agricultural products by railroads January l, will be sub stituted for the decision on these com modities.
 Gives Separate Opinion.
 Commissioner Potter in separate opinion concurrng with the majority declared that the fixing of the per- centages mentioned is in effect a re- 1uirement that present rates and charges shall generally speaking. be reduced 10 per cent-certain reduc- lions heretofore made to be treated as part of such ten per cenc- reduc- ton"
 Majority Report.
 The majority opinion reviewed the recent history of rate regulation and set forth summaries of arguments made by shippers in favor of reduc- tions and carriers against reductions. It expressed the conclusion that "as- that railroad rates can or should be stabilized on the present nigh basis is futile"
 The majority further said that until the public is convinced that .here is little likelihood of immediate 'urther material reductions in prices ,r transportation charges, confidence necessary to normal business will to hat extent be impaired
 Explaining the reason for adopting , horizontal method Of reducing relght rates, the commission said that while alterations in price levels had .oually affected different comm oditieA the needs Of commerce cannot be net if rates are to fuctuate with mar ,et prices Of commodities Its con- ,lusion was that reduction should be made generally upon all commodities n substantially equal ratio"
 Reasonable Returns
 In the matter of reasonable return he commission pointed out that until ,,arch 1, 1922, railroads had been e- -allv entitled to ( per cent. annual ,arnngs on the aggregate value of he property used in transportation, he sum was fixed by the transporta- ion act as the amount equal to 5h ger cent. with ia of per cent. addi- ional to be granted in the discretion If the commission for provision for and betterments to ajlroads. The com mission exercised his discretion and the reasonable re- urn consequently has generally been ,nown as the six per cent return" he commission in modifying the fair eturn standard reviewed testimony aken by it in the general rate case nd concluded that "a suhsta ntial r0.