Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1922-06-02
Freight Rate Cut Which viii
Save People S4Oo,00O,O00
a Year Is Ordered.
SHOULD REVIVE BUSINESS
No Let-Up in Attack on Attorney Gen
eral Daugherty-Bankers Meet in
Paris to Solve international
Loan ProbIem-commu-
mist Outbreak in
Bulgaria.
BY EDWARD W. PIcKARD


ROR some time President Harding
L has been striving to bring about a
general agreement by the railways of
the country to reduce freight rates
materially and voluntarily, accepting
the opinion of many experts that low
er rates are essential to the recovery
of business in the United States. He
called a number of railway executives
TO a conference in the White House
and laid the case before them, and
they named a committee of their mem
bership to cooperate with the inter-
state commerce commission in at
tempting to realize the Presidents
wishes. This looked promising until
Mr.. Harding a few days later admitted
that the railway chiefs had so clearly
presented to him the difficulties of the
situation that he was not very san
guine of success.
Then the interstate commerce COM
mission by itself came to the rescue
and on Wednesday announced deci-
sion in accordance with which rates
on nearly all classes and commodities
of traffic will be reduced on July 1 by
amounts equal to 10 per cent of their
present levels. The chief commodities
excluded from the reduction are agri-
cultural products in all sections out
side of New England, live stock and
western grain and grain products.
The order reaffirms the reduction of
10.5 per cent in the western hay and
grain rates last fall and the cut of
10 per cent made voluntarily by the
roads on agricultural products, Jan
nary l.
According to the setimates of ex-
perts, the reductions mean saving
of approximately $40oO00,000 year
in the rail transportation bills of the
American people. The farmers alone.
they say, will benefit to the extent Of
some S127 100000 a year on goods that
they buy normally. The cut is ex-
pected to increase buying and thus
stimulate industry and diminish I'M
employment On this there is general
agreement among manufacturers, mer-
chandisers and bankers.
Many of the rail executives were
not only surprised by the commits
sion's decision. but also quite disgrun-
tied. holding that the reduction should
have been postponed until the roads
had accumulated more funds through
Increased earnings. Others, however
admitted that the loss in freight rev.
enue probably would be more than off
set by Increase in traffic.
The interstate commerce commission
included in it's decision the determine
tion Of 5.75 per cent as the reasonable
annual return for carriers on their
capital investment, as compared with
the 6 per cent level previously fixed.
The new figure really amounts to 6
per cent. since the federal corporation
income taxes are subtracted from
earnings before profits are figured.
Another part of President Harding's
plan was voluntary acceptance of
a reduction of wages by the railway
brotherhoods. At present there is lit
tie prospect of this, but the railway
labor board is expected to make a de-
cision soon on wage questions that
have been pending before it, the find
ing to be based solely on evidence
presented in the hearings. 1t is esti-
mated by the bureau of railway eco
Monies that railway labor board or
ders to date are saving the roads $780,,
100000 a year in reduced wages, so
much of the freight reduction seems
already to have been unloaded.