Evening star., 1922-07-15

WELLESLEY HILLS. Mass. July IS.
the past week Roger W. Bab-
son has been in New York in consulta-
ton with important railway interests
He has returned believing that a freight
car shortage is inevitable this fall, and
everything possible should be done to
Prevent it. Concerning the same, Mr..
Babson states as follows:
There are various events which in
dfcate n serious congestion Of freight
this fall. First there is a real shortage
Of equipment in good condition. Through
out the war the equipment Of most rail-
was done to repair this equipment until
this year.. During the past few months
railroads have been endeavoring to do
hve years repair work in one. AS a re-
suit great many freight cars are either
in the process Of being repaired or are
they are out OF service. 1t is true that
many Of these cars will be back in serv-
Ice by winter, but they will not be avail
able by fall. This means that there are
fewer cars available today to haul
freight than are usually available.
Usually the railroads haul their coal
during the spring and summer. The
winter supply is usually delivered by
the railroads during the summer months.
Thus far this year very little coal has
been hauled. Only immediate needs
have been taken care Of. Yet only two
be starting their furnace fires. On the
assumption that the miners will soon
be back to work this means that the
railroads will be deluged with coal dur
ing the remainder of the year Every
available car capable of hauling coal
L. H.
tonnage should be very, very heavy.
''The outlook today is for good crops
this fall. At prevailing prices the
farmers will want to sell their grain
and move 1t at once. This means that
the railways will be called upon to
move a tremendous amount of grain
while they are attempting to move
lead one to believe that manufac-
turing as a whole will be more ac-
tive this fall than it has been at any
time this year. Fundamental statis-
tics indicate that the low point in
business will be reached this summer.
hauling raw materials in general
and manufactured products of all
sorts"
Mr.. Babson was then asked what
effect such q congestion would have
upon commodity prices and securi-
ties. 10 THIS ne replled as 1OliOWS.
Freight car congestion inevitably
leads to higher prices. This is only
natural as prices are determined. not
by costs. but by supply and demand.
''If city naturally uses thirty car
loads Of potatoes a day. any day that
there is a shortage of only two or
three cars the price of all the po-
day. when there is a surplus Of only
tatoes in that city goes UP. Another
day when there is a surplus of only
two cars the price of all the pota-
toes goes down. Price is not deter
mined by the total quantity of a
product produced or consumed. but
rather by that small percentage of
surplus or shortage. A freight con-
gestion this fall would inevitably
lead to a shortage in certain raw
materials and merchandise in some
localities. AS a result these COM
modities will temporarily strengthen
in price at these points. Such a re-
suit is inevitable.
STRENGTHENING commodity prices
are often-although not always-pre-
ceded by Strengthening security
prices. The stock market usually dis
counts rises in the commodity mar
ket Thus a congestion of freight
might mean both advancing COM
modify and security prices. Further