The Washington herald., 1922-05-25
Rail Economists Say l. C.
C. Order Brings Costs
Far Below 1920 Level.
WAGE REDUCTION
DEMANDS AIDED
Predict Roads Will Ask
Competitive Rate For
Train Service" Men.

Freight rate reductions ordered into
effect July / by the Interstate Com
nIerce Commission will reduce tire
100000 below the high level estab-
lished in August. 1920, according to
the calculations of railroad econo-
mists.
$500. 200, 900 of this amount, on re-
auctions which already had been made
by the railroads. principally on basic
commodities. The 10 per cent re-
made on a basis Of the original 1920
schedules. will bring the total to ap-
proximately $3.50. .OOO. 900.
This figure supposes. that freight
revenues. without change, would have
been during the year s4.5OO. 900. .OOO
Last year they were something under
$4,000. .OOO. 900
Tax Repeats Aid Saving.
The saving over the peak point
grows larger when tax repeals are
taken into account. Taxes on freight.
passenger fares. Pullman tickets and
express packages. which were abol-
ished the first of the year. would
have cost around S225, ,0OO. 900.
In addition to slashing freight rates.
the T. c. c. fixed as a fair return
on railroad stocks 5.75 per cent. The
previous rate was S per cent. under
terms of the transportation act, which
obliSates the commission to fix rates
at a point to yield a fair return on
the investment. Confidence was ex-
pressed that the new rates will make
possible the return fixed.
In making its reduction. the I. c.
c. argued that high rates were i'm
pedinS business. and that lower
rates would increase commerce in
every direction and thereby make
larger the profits OF the roads.
Aim to Lessen Burden.
We are of opinion that general
reduction in the rate level. as sub
stantial as the condition of the car
riers will permit. will tend not only
to lessen the transportation burden,
but also to equalize and stabilize
1.-THE conditions under which COM
merce and industry are carried or.
the carriers of realizing the fair
return contemplated by the law"
said the decision of the commission
go In 1920 we authorized
| large increases in freight rates and
passenger fares. designed to produce
the necessary revenues under con-
! ditions then prevailing. There was
then little doubt of the ability of
industry to bear the increased
Charges. The situation has since
csanCed- The country has been
Spassing through a period Of abund-
ant supply and slack demand. in
which prices at the source have
fallen of sharply. Trans
portation charges have mounted to
point where they are impeding
fhe free flow of commerce and tend
Ing to defeat the purpose for which
fhey were established. The
tendency is toward increased reve-
nues. lowered cost and higher net
income for the carriers"
Decision Followed Hearings.
The decision Of the commission
followed extensive hearings at
which testimony was taken from
producers. shippers. consumers. rail-
road executive and all interested
persons. IT was made public when
president Harding. at a conference
with railroad executives. tried un-
uccessfully to persuade them to
produce rates voluntarily They IN
dicated an unwillingness to do this.
aidvancinS host of objections. So
the administration turned to the
Interstate Commerce Commission.
whose decisions are mandatory.
ah mi
endeavoring to bring about lower
rates ever since it went into power,
considering the railroad situation
the key log in the Industrial
jam. High officials are hopeful that
the Immediate effect will be to
stimulate industry and business in
every direction. bring help to farm
PRS and increase exports They
believe also there will be a reduc-
ion in the cost OF living. The e~
ent of this. IL is held. will be many
lines greater than the actual dol
srs saved because of the cut. be-
fause freight charges are "pyra-
nided'' many times before the raw
product reaches the consumer as a
nished article.
Decla-e Cut Discounted.
opOhCoHch the TdllTOdO eX-
(cutives expressed no surprise at
he cut. saying IT had already been
scounted. They will at once pro-
BED to revise their tariffs.
The effect will be to bring re-
ewed demands for reductions in
ages of employees. which are gov
rned by the Railroad Labor Board.
tting in Chicago. The freight cut,
was pointed out. will give execu-.
YES something more tangible in
heir arguments before the board
an the mere expectation" of low
rates.
Pay to employees already has been
duced between $3.50. 100000 and
10000. 900 annually. In a case
hich opens before the board in
W weeks the roads will ask that
" OF all other than train serv-
B" employees be reduced to the
mpetitive rate in the district In
hich they work-that Is, the pre-
Hing rate in other Industries. A
Sc just concluded asked that pay
train service" workers be re-
Iced to the level before the in
Ease Of 1920. which would mean