The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1922-05-24
Railroads Entitled to Earn SO.
Per Cent on Property Value.
National Commerce Commission
Makes Drastic Order Today.
EAST LINES CUT ID Per Gent
Passenger Rates and Pullman
Surcharges Left Alone.
Agricultural Products Let Alone
by Commissions Act.


Washington, May 24.-The inter
state commerce commission today de-
cided that railroads are entitled to
earn q per cent on the value OF
railway property. compared with the
per cent which was made the reason
able return standard under the trans
portation act, and ordered railroad
rates in eastern territory cut approx
mately Il per cent effective July 1.
The rate cut averaged approximate
ly an actual 10 per cent decrease in
rates
Passenger Rates Not Affected.
Passenger rates and Pullman car
surcharges were left unaffected by the
decision which applied to freight rates
exclusively.
The calculations as to the general
percentage of reduction effected by the
commissions decision were difficult
to arrive at. The statement by Com
missioner Potter that they averaged
generally 10 per cent was accepted,
however. as correct by the commits
sion's personnel and rate experts gen.
orally.
In western territory the commission
ordered a cut of approximately thir-
teen and one-haf per cent and in the
southern and mountain Pacific groups
approximately 12.5 per cent all effec- |
tive July 1.
The commissions rate cut was made !
horizontally and removes a percentage
OF the general increases given to all |
railroad rates in 1920 The commits /
sion in its decision declared a general /
rate reduction in rate levels "as sub /
stantial as the condition of the carrier !
will permit, will tend to stabilize con- |
ditiOns" of all business
Charges Hurt Free Transportation.
Transportation harges have
mounted to the point where they are /
impeding the free flow of commerce"
the com missions decision. which or
dered far greater reduction of rates /
than had been anticipated in any quar- |
ter said. and are thus tending to de-
feat the purpose for which they were
established. that Of producing revenue
which would enable the carriers to
provide the people of the United States
with adequate transportation
Won't Affect Agriculture.
Agricultural products will not be af-
fected by the reduction granted under
the commissions order today. The
reduction of 16 4 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 by January l, will be sub
stituted for the decision on these COM
modities- 5,
The general question OF whether
railroad transportation charges in the
United States had~attained levels too
J
port was brought formally before the
interstate commerce commission in
the fall of 1921 on the commissions
own motion, altho in response to ma .
tion-w.de commercial and political {
suggestions.
Farm organizations and representa-
tives of western states. PARTICULARS =
those in the grain producing area. OBJ
tained marked concessions about that
time to which railroads voluntarily
added a 10 per cent reduction on
practically all agricultural products
all over the United States except in
New England.
Before the commission however.
the railroad executives, statistical ok
perts and attorneys developed the ar
Eument that railroad earnings were !
insufficient to justify any general de-
creases. at least until operating ex-
penses and wage payments, as regu-
lated by the railroad labor board. had
been reduced.
Every major industry in the United
States was represented in the hear
iTgs. along with state reguIative
bodies most of whom sought lower
ing OF transportation charges, but di-
verged in the degree of urgency which !
they suggested for the COMMISSIONS
action The hearings extended over
four months.
Raw Material Cut Asked.
Secretary of Commerce Hoover. an
peartng at the request of the Chamber
of Commerce of the United States
proposed that the commission should
make over the existing rate structures
on the principle OF applying propor-
uonately lower freights to the bulky.
low priced, raw materials of industry I
and agriculture, such as coal, primary
footstuffs. and ores.
Higher price finished materials and
passenger traffice. Mr.. Hoover Eur-
gested. might bear the charges until
such time as railroad revenues had
developed to the point which would
allow reductions without endauzerins-
railroad credits. Immediate and
tangible cuts, he said. probably could
not be made.
The secretary's position contrasted
radically with that of state commits
sions, whose members centered a good
deal OF their attack on passenger rate
schedules, which they alleged to be
too high for the traffic. and in reality
the cause OF low railroad earninRs
J. r. koontZ. assistant freight traf- ,
fic manager OF the Santa Fe. said to-
day he did not care to discuss the re-
duction or its probable effect until
after he has had an opportunity TO
view the entire decision
Kansas viii be benefited bv the TO /
Per cent freight rate reduction or
dered today by the interstate COM !
merce commission chiefly on salt coal {
OIL. cement and brick products, P A. {
Conway. traffic expert of the public I
utilities commission said. commenting I
on the interstate commissions order. /
me average yearly production OF I