The Colorado statesman., 1922-11-25

to carry it has been the large
| increase In freight rates." SAID Sec
retary of Agriculture Wallace In talk
| ing of the troubles of the farmers.
| He pointed out that in 1920 freight
| rates on many of the more important
| farm crops We're almost double what
| they were before the war; these in
creased rates not only imposed
| grievous financial burden but in many
| cases narrowed the market for crops,
which were not worth enough to carry
the freight rate to distant markets.
'At the same time" said he, 'the
| Increased rates on the things the
| farmer had to buy added to his cost of
| living and the cost of production by
| just that much. Had prices of farm
crops remained at the 1919 and early
| 1920 levels, the higher freight rates
could have been paid without incon-
venience. A freight rate of 20 cents
q bushel when corn is selling for SIZE
/ a buShel Is not a serious matter, but
25-cent rate on J0-cent corn is ruina-
tiOn. During 1920 the influence of the
administration was eXerted in every
proper way to bring about a reduc-
| tiOn in freight rates on farm crops.
and number of important reductions
were secured. Rates are still alto
gether too high, however, with rela-
tion to the selling value of crops, and
further substantial reductions must
come in the near future.
This railroad question is exceed
ingly complex and difficult. When the
federal government took over the
roads it was on the agreement that in
addition to proper maintenance they
should be assured of earnings equal to
the average of the three years, June
| 80, 1914, to June 80, 1917 Costs of
operation were increasing steadily and
the government advanced both passen-
ger and freight rates.
Railroad Costs Too High.
Ubiquitous working agreements and
shop rules which greatly reduced la
Dor output We're accepted. The result
was that railroad costs of operation
| increased far more than railroad re-
ceipts. During this period practically
everything shipped was selling at u
price high enough to have carried a
correspondingly high freight rate.
Good business administration would
have provided for railroad income dur
| ing those prosperous times large
enough to meet the government con-
| tract and would thus have saved the
| hundreds of millions which the gov
ernment afterward had to pay. Also
| 1t should have made it possible for a
prompt ref-fc7:un in rates when the
| prices sc farm crops made it necessary.
"The urgent demand by farmers for
large reductions In freight rates have
| led some people to think that If the
| farmers could have their way they
would put rates so low that the roads
could not possibly operate. Nothing
could be further from the truth. The
| farmer is almost wholly dependent on
the railroad for the movement of his
surplus crops and live stock. Much
agricultural freight is perishable and
must have expedited movement. The
farmer, therefore, has direct interest
in efficient railroad operation and
knows that the roads must be permit.
ted to charge enough to cover all prop.
er costs Of operation and enough in
addition to give fair return upon
the money invested and thus keep
capital in the business. Neither does
the farmer want government opera
tion of the railroads. He had enough
of that in his three years experience
to satisfy him for all time. He will
never forget the losses, both direct
and indirect, which he suffered be,
cause he could not ship when his stuff
was ready for market, and because
of bad service.
Rates Must Come Down.
Nevertheless, freight rates on farm
crops and live stock must come down.
With present prices for his crops and
with probable prices for the next year
or so, the farmer simply cannot afford
to pay the present rates. They are
out of all proportion to the pay he gets
for what he grows.
"a hopeful sign which points toward
the possibility of reductions in rail.
road rates is the gradual reduction in
the part wages contribute to the total
operating cost. Apparently, the rail.
roads are making steady progress in
the reduction of these costs, and should
tneIelole NC dple SVoh " hi"he sun
stantial reductions in freight rates on
farm products. In considering the
matter of freight rates of agricultural
products there are two things which
should always be kept in mind. First
that the cost of transportation Is es.
sentially part of the cost of produc'
ton, so far as agriculture is con.
cerned, and any increase in transpor
tation costs must come out of the
price the farmer receives. Second, our
business and industrial life has been
built up on a system Of relatively low
railroad rates for agricultural crops