New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1922-04-29
Sees Industry
Shifted West
By Rail Rates
Crop Movements Discour-
aerd by Present Freight
Tariffs, Says Secretary
of Agriculture Wallace
Points Out Six Effects
Daniel Willard Declares
transportation Act Has
Not Had a Fair Trial

4 radical read tment Of the eco
monte scheme throughout the country.
including a gradual shifting OF indus
trial enterprises westward. nearer the
surplus food producing territory. is in
prospect Il the present railroad freight
rates are continued for any length of
time, in the opinion of Henry {. Wal
lace, Secretary OF Agriculture, who was
ore Of the principal speakers at the
sen1i-annual meeting of the Academy Of
Political Science at the Hote! Aston
yesterday
Secretary Wallace. after reviewing
the relationship that existed between
railroad rates and commodity prices in
this country prior to operation under
the provisions of the Transformation act
Of 1870, pointed out SIX probable impor-
tant effects OF the continuance of high
freight rates. His remarks were the
mQre timely OF account Of informatior
shat had come into Wall Street only
the day before, leading fiaanciers to be-
ieve that downward adjustment Of
rates was an immediate possibility. The
sjx possible developments would be. to
use Secretary Wallace's own words:
Would Favor Foreign Farmers
First, TO favor the farmers Of South
America and Australia at the expense
OF our own farmers. and ell the more
50 because Of the substantial decrease
in ocean rates
Second, TO keep prices of farm prod
ucts in the large surplus producing
states at figures lower than are JUST
fed by the investment in land and
equipment and the cost Of farm pro-
duction, except during years Of short
crops
Third, to prolong the period of
dissatisfaction among farmers and to
encourage advocates of economic fal-
lacies Of all sorts.
Fourth, TO improve the position Of
Eastern truck and fruit growers, but
add considerably to the cost Of pro-
duction of milk and dairy products, be
cause Of the advanced prices OF hay
and coarse grains necessarily shipped
from the West.
Fifth, TO gradually shift industrial
enterprises westward nearer the sur
plus producing territory.
sixth, TO promote sectional rather
thon national spirit and make more
and more difficult large national poll
cies with respect to international af-
fairs"
Reverses Prevailing Theory
Il am not making special plea for
the farmer as against the railroad,'
said Secretary Wallace. "The relation
between agriculture and transportation
IS so very intimate and dependent that
neither can afford TO acquiesce in q
condition which seriously affects the
other. The mportant point I am try
ing 20 make is this, that the nation has
been built up by system of low rail
road rates designed to encourage the
movement OF our surplus agricultural
crops long distances to manufacturing
centers, with corresponding return
haul of manufactured products, and
that sudden reversal of this theory
Of rate making results in great eco
monte injustice, and, if persisted in,
will keep US in q state of confusion
and agricultural and business uncer-
tainty for q prolonged period. The
need Of permitting the railroads TO
charge rates sufficiently high TO cover
reasonable costs of operation and main
tenance and yield fair return upon
the capital invested is SO obvious that
II must at once be conceded. But the
folly of undertaking to establish such
rates wholly without consideration Of
the disastrous effect upon agriculture,
The greatest industry in the country, is
apparent to every one
Transportation Act
Daniel Willard. president of the Bal
timore & Ohio Railroad, followed Sec
vetary Wallace at the luncheon meet
ing of the Academy OF Political Sci
enoe. MIR. willard has discussed the
transportation act of 1920 at length
rom all angles on several occasions
since the railroads were returned to
private control Yesterday he brought
his observations on the efficacy Of the
act up TO date, stating that the success
of the act has not been thoroughly
demonstrated in all of its aspects,
owing to the abnormal conditions under
which the carriers have been operating
since they started out without the pro-
lection of q government guaranty in
Septembe 1920.
Il believe that it would be a great
mistake to attempt to amend or change
the act in any of its fundamental
features at the present time" said Mr..
willard. 81 do not think we have vet
had sufficient experience under the act
90 Justify conclusion that a change
10 actually necessary, or If necessary
TO indicate clearly what the change
zhould be. firmly believe that If the
net is permitted to remain as it is for
period Of five years, and if the rail
way managers could be assured that it
"ould not be changed within that
boA lVu VI tllut, tiIdt q uCn KnU"JcQEe
would have a most stimulating and
encouraging effect not only upon the
railway managers but upon investors
as well, and would in itself go far to
assure the success of the act"
Walker D. Hines, who succeeded
William G.. McAdoo as Director Cen
eral of the Railroads, went into the
rule of rate making now being prac-
ticed under the transportation act. He
tod hat
70 spend from $3.50, 900 to $1,000
100000 q year for q long period if
they are to keep up with the growth
Of the country. Mr.. Willard had given
an estimate of half billion dollars.
The whole meeting OF the Academy
OF Political Science was given over to
q discussion of the railroad situation.
There were speeches, in addition to
hose of Secretary Wallace, President
Willard and Mr.. Hines, by Frank II.
Dixon, OF Princeton University; W. \.
Doak, vice-presdent of the Brother