New-York tribune., 1922-05-25
Rate Cutting Order Holds
Roads.Shouid Earn ;. Is 90
Expresses Belief Lorer Freight
Charges " i'll Increase Rere.
nucs b% Building I p Business

From Tbs II ban6'S WcshiaDton Bureou
WASHING TON. May 2i-In issuir,
its order to-day directing that reduc
tion Of about 10 per cent DO made j,
freight rates, the majority report o
the Interstate Commerce Commission
said in part:
1T IS our duty TO initiate sucb rate:
ss will enable the carriers TO earn q.
7early as may be q fair return, quali.
fied as provided for IN the act. II 1926
Ue authorized large increases ir
freight rates and passenger rates de
signed 10 produce the necessary reve-
uues under the conditions then pre-
vailing There was then little doubt OF
the ability % industry to bear the III
creased charges. The situation has
sirce changed The country has been
passing through a period OF abundant
supply and slack demand, In which
prices 81 the source havo fallen Of
sharply. High rates do rot necessarily
mean high revenue. for, if the public
can not or will not ship III normal vol
lme, less revenue may result than
from lower rates.
impeding Commerce
shippers almost unanimously CON
,end. and many representatives Of the
carriers agree, that freight rates are
100 high and must come down This
1ndicAtes that transportation charges
nave mounted 20 a point where they
are impeding the free flow Of com
laerce and thus tending 70 defeat the
purpose for WINCH they were estab-
tshed, that Of producing revenues
which would enable the carriers to
provide the people OF the United
States with adequate TRANSFORMATION.
Practically all agree that stability
q freight rates Is highly desirable and
iASt normal traffic may not we'll be sx-
pected until the present widespread ex-
pectation Of e reductions is realized
o. dlspelled. To assume that rates can
:" Should be stabilized on the present
hIgh basis IS futile. The period
Of dedauon has been in progress more
man fifteen months; demand is reviy-
ing: prices are showing q tendency TO
slaDiIl7e upon level much below that
~ I9z0 bat above that Of pre-war years.
and conditions Of the agricultural and
i1Anutacturlng industries have greatly
improved in the last few months,
Ne are Of opinion that general re-
cuction IN the rate level, as substantial |
as The condition Of the carrier. will |
permit VII tend not only to lessen the I
transportation burden but also 10
"qnalze and stabilize the conditions /
oAder which commerce and industry /
are carried on. with consequent fuller /
.ssurance 10 tho carriers Of real2jng /
me fair return contemplated D. the |
law. '"N
Expenses Reduced
The results or the three-year no
rod ended June 80. 1917, were bv stat
ute made & criterion for lust comper-
NaAon TO the carriers taken under FED /
"ral control. The raising Of the rato !
i*yei ny the Director General oJ Raj /
.oads IN June, 1918, and again under
our authority in August. 1920. woe
"ecessltated By Increases in OPERATING
tally receded POI
ne justification for decrease is to
%" found IN the rate structure az
"aole rather than in individual ra+es
ar III rates on Individual commod;ties
1T IS true that the prices of some com
oaitles have receded more rapidlv
0No 10 greater extent than Others
en- as som" Went up more ranidlv
AaH 10 greater extent than o+herS
REIMBURSEMENT, however. is not cow.
p etc and the process of eouali2jnp
prices ls stlH in progress. some COM
< up and Others going down. which
VIII pFoOabI% result in q more eoual
ever III the near future The needs
. commerce canNet be met if rates ara
20 nuctuato with market prices Of com
ouiI1es' N bringing down the rate
eTel TO meet lowered eypenses =
:
ne REDUCTION made generally upon ali
commodities N substantially cousi
alto o4u"'
Should Net 5.75 Return
Referring to The reductions ordered.
ne commission said:
r Felght rates and charges herein
etermined viii enable the Carriers N
ne respective rate groups slnder hon
sV, eIncieAe and economical manage
lent and reasonable expenditures for
1alntenance of way structures and
Qalpment to earn an aggregate an
aat net railway operating income
4uai, as nearly as may be, to & return
o.'o per cent upon the aggregate
alue OF the railway property OF such
arriers held for and used in the serp- I
e OF trans portatiou.
IN asserting to the reduction in
NAe4'i man MCtnofd takes lSs;;S
lth the rate OF return allowed by the
'mmission.
AT this time he said, ~ an, on '
osed TO nXlng & rate Of annual re- {
m Oh the aggregate value OF the
-!1way property, and, III any event. IN |
rate OF 5.I6 per cent. IF rate Of
lurn is 20 be fixed - all think II T
'ould not exceed 5.5 PEI cent. which F
IS that fixed by Congress at q time
ieH conditions we're at their worst. r
a whlch seems to NE not only ade Z
aye Tor present purposes, but for J
ture adjustments. =
Il think that the times and cordi-
>ns plainly demand reductions in
tes on all materials and nro6ucts
q, are bas'c IN industry and in our
istence as a people TO level that
slness interests viii rxognize as the
vest available for some time TO come.
thing less Will quiet the prevalent
rest and agitation fox lower trans
rtation costs and encourage the
eded healthy fow Of traffic.
The more nearly we approximate
admissible limits OF reduction the
re etfectually viii we obtain that
bihzation Of rates which is conceded
be essential to full and country 4
ie resumption Of business. In nv \
gUent the general reductions now
reed fall short of full attainment l.
the desired end, The record con- r.
ces ne that the present level Of