Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-06-04
FREIGHT RATE REDUCTION
WILL STIMULATE BUSINESS
10y Wells. Dickey Company

The outstanding feature of the
weeks business was the announce
ment by the Interstate Commerce
commission of 10 per cent reduction
in freight rates. 1t had been anti
cipated by business generally that a
reduction was Forthcoming, but cannot
be denied that bankers and manufac-
turers who had been clamoring for
months for relief from high traffic
schedules were taken some what by
surprise that these reductions came
through so early. The order of the
commission followed very closely upon
President Harding's conference in
Washington with railway executives,
and it would ordinarily have been ex-
pected that a considerable time would
have elapsed between the calling of
such q conference and a commission
order.
This reduction, which will be put
into effect. undoubtedly meets with
the opposition of a great portion OF
the railway executives. At the same
time it is not at all clear that the re-
duction in rates will work any actual
hardship to the carriers. The country
has been suffering for some time un-
der excessive carrying charges and
there are those who argue with good
reason that high rates have been de-
cidedly hampering a return OF more
normal business and that any reduction
coming at this time will serve as a
decided business stimulus.
Two Views on Decision
There are two views at present
being taken of the decision,-one that
no reduction in rates should have been
.n- 1r-. o.,~~ ~f yhn Rotlu-QU
Labor board had announced also a
cut in rates as a c~ompensating effect,
the other that a cut in rates at this
time even without a cut in wages will
place the railways in a more favorable
situation through a resultant increase
in traffic. Statements of railway
earnings and operating expenses dur
ing the past year prove conclusively
that so far as income derived from
present volume of traffic is concerned.
freight rates now ruling are not too
high. If it is true, however, that
rates now existing have served as a
deterrent to an increase in traffic.
then q reasonble reduction such a.
has been announced may be more than
compensated for by a larger volume OF
business which the railways Will be
called upon to carry.
The reduction in freight rates is not
nearly so drastic as may seem appar-
ent at first sight. Many railways had
already announced cuts in rates on
certain commodities, notably products
of the farms. and it is understood that
these reductions will not be deducted
from present rates where such have
already been reduced the required
amount.
1t will be interesting to notice what
affect this announcement will have on
freight traffic from now until the time
that the new rates go into effect
There may be some attempt to stop
shipments already scheduled until such
time as the new rates become opera
tive. There is little likelihood, how
ever. that there will be any substan-
tial slowing down of freight traffic
during this interim because most goods
are moving under some sort OF con-
tract of sale under which the freight
rate has already been absorbed. Goods
in transit already for shipment are
also in large part scheduled for I'M
mediate need so that any slowing down
in shipping would work an actual
hardship somewhere.
German Loan Taking Form
II will be some days before anything
final develops from the recent confer
ence of world bankers called in Paris
to consider extending credit TO Ger
MANY. There is apparently a growing
belief in international financial circles,
however. that some sort of credit Will
eventually be extended to enable Ger
many to extricate herself to some ex-
tent from her present financial diff
%culties. Two conditions were first
placed upon the German government
before such a loan would even be con-
sidered.-one that she arrange at once
to cut down her governmental ex-
penditures and thus to balance her
understand second, that she posi-
lively accept the reparations terms as
previously outlined. Germany has
lust announced her acceptance of both
these conditions, thus paving the way
for further plans. The situation in
Germany at present is such that a
loan in order to do any good at all.
must be of substantial volume.
Exactly what amount can be abb
sorbed at this time in the world in
vestment markets depends very largely
upon the absorptive ability in the
United States, because it is here that
a large portion of the securities event
ually will be lodged. England is prac-
tically the only other country so stu
ated financially as TO be able to absorb
any volume of this loan. The situation
in the bond market in London during
the past few weeks, however. indicates
that even her absorption will be in
only q very limited degree. No doubt
the loan will have to be carefully con
ceived and executed from a security
standpoint. and a great deal of educa-
tional work must be done before Amer
lean investors will come around to the
point of purchasing in quantity. These
difficulties, however, are not insur-
mountable, because the arrangement
of security can he accompanied by com
petent financiers, while intelligent mar
keting will do a great deal to break
down buying resistance among Amer
lean buyers. The loan when it
doubtless will be offered on most at
t~ractive terms. Plans as now being
formulated call not for a single loan
to take care of Germany's require
ments, giving q surplus to meet future
needs which must be administered by
German officials. but rather for a
series of loans arranged over n con-
siderable period Of years and running
in echelon so as TO meet Germany's
financial requirements as they develop
in the future.