Arizona republican., 1922-05-25
Ice. ORDERS TEN PER CENT.
GUT IN RAILROAD FREIGHT
RATES EFFECTIVE ON JULY |
Decision of Interstate Commerce Commission
Will Cut $4OO, 100000 Per Year From
National Freight Bill; Agricultural Prod
ucts Not C,.f; Passenger Rates Unchanged
T Republican A. p. Leased WireI

Republican A. p. Leased Wirel
WASHINGTON, May 24-Railroad
freight rates will be reduced on July
/ by amounts equal to 10 per cent of
their present levels under a deci-
sion of the interstate commerce COM
mission announced today. Practically
all classes and commodities of traf-
! fic are affected by the decision which
marked the conclusion of the inves-
tigation began last autumn py the
commission on its own initiative, into
the reasonableness Of existing freight
levels.
Agricultural products in all sections
of the country outside of New Eng
land, livestock and western grain and
grain products are the chief commod-
tiles excluded from the reduction,
these comprising the freight classi-
fication upon which reductions have
recently been put into effect. Pas
senger charges and Pullman fares
also are left unchanged by today's
decision.
With its decision on rates, the COM
mission announced also its determi
nation of 5.75 per cent as the rea-
sonable annual return which carriers
in the future will be entitled to earn
upon their actual capital investment
This compares with 6 per cent, the
level fixed under the transportation
act for the reriod expiring March I.
Railways were required to signify
to the commission before May 81,
whether they would voluntarily make
new schedules complying with the
decision or require the commission
TO issue its formal and detailed or
der for the alteration
Though divergence in view within
the commission was indicated by. sew
eral supplemental concurring or dis
senting opinions. the full weight of
the commission appeared to be thrown
behind the statement made in the ma
jority and controlling opinion, that
general reduction in the rate level
as substantial as the condition of the
CARRIERS will permit will tend to sta
billie the conditions under which
commerce and industry are carried
on with consequent fuller assurance
to carriers of realizing a fair return"
Cuts Nations Freight Bill
On the statement of the commits
sion that rail freight revenues in
1921 approximated $4,000, ,000, 900, to-
days decision will reduce the ma
tional freight bill by $400,o00,000 per
year.
AS stated in technical language to
the roads. the commission said that
after July l it would hold unrea-
sonable rates Including more than
the following percentages over the
rates in effect Immediately prior to
August 26, 1920, and set up the terri
1orEal schedule as follows:
i'm the eastern group, also between
nnftRfS N 1llfnnic folFifn fnrN and hp-
tween Illinois territory and the east
ern group, 26 per cent instead of the
40 per cent authorized in the deci-
sion last cited.
In the western group and between
the western group and Illinois terri
tory, 21.5 per cent instead of the 80
per cent so authorized.
I'm the southern and mountain Pa
cific groups 12.5 per cent instead of
the 25 per cent SO authorized.
ION inter-t territorial traffic, except
as otherwise provided herein, 20 per
cent instead of the 3S 1-3 per cent so
authorized.
Commissioners Potter, in a concur
ring decision, pointed out that the
percentage reductions so defined are
'in effect a requirement that present
rates and charges shall, generally
speaking, be reduced 10 per cent"
Follow Harding's Views
The commission after reviewing
the argument for and against rate
reductions as made before it by
shippers, railroads and representa-
tives of geographical areas of the
country. declared that as rates had
been pushed up by horizontal per-
centage increases, a similar process
should be followed in bringing them
down ito meet tbs lowered expenses
of operation. This 0pincided with the
argument which HVsident Harding
advanced before railroad executives
at a dinner conference last week. in
favor of rate reductions affecting
sharply basic commodities, but leav-
ing untouched existing rates on high
priced finished commodities which
generally take class rates.
1t was chiefly on this point that
supplemental and dissenting opinions
We're filed. Chairman McChord and
commissioners Lewis and Cox advo-
c45ed sharper commodity reductions,
rather than the horizontal fashion
cuts decided upon by the majority.
Mr.. McChord likewise dissented TO
the $50 per cent fair return provision
while Commissioner Potter suggested
also reductions in passenger rates.
Practically all agreed that stabil-
ity of freight rates is highly desir-
able the majority opinion declared,
'and that normal traffic may not well
be expected until the present wide
spread expectations of rate reduc-
tions is realized or dispelled To
assume that rates can or should be
stabilized on the present high basis
is futile
-O-