New-York tribune., 1922-05-25
RAILROAD Men Point to
Rate Cuts already Nade
Say FuN Effect of I. {. t.. Re.
duction Ordcr Depends on
1N0lra7,ce for PrcriOuS DrOpS

In the absence Of the complete tex
OF the Interstate Commerce Commits
sion s. order reducing freight rates II
per cent on the average, railroad cX
ecutiVes said yesterday that .hc full
effect Of the cat could not be deter.
mined until it had been learned wheth-
cr reductions made either voluntarily
or by order Of the commission during
The last year had received due allow
ance.
Generally, however, there WAS less
pesslmism among executives in the
Western group than among Easterners.
There was q dlspos 10 Conetrue the
decision as meaning that reduct IONS a.
ready made would be credited again {
the present cut
The Association of Railway Execu-
tiVes VII meet before the end OF May
TO determine whether the mem ber
roads Will put the reductions into ef-
feet without formal order from thc
Interstate Commerce Commissions.
I'VE must necessarily compute the
difference between the rate cuts which
We have already instituted and the
amount contemplated by. the commits
SION 5 announcement before an esti-
mate can be made of the ultimate ef-
feet, SAID julius Aruttschnitt, chsir-
man OF the Southern Pacific, III com
monung on the decision. The South
eln Pacitlc was among the first Of the
rauroads voluntarily TO adjust rates
during the last year, and il is possible
We nave done enough to relieve us
from the commissions decision"
Thinks Allowance Low
With respect to the revised earning
allowance of 6A per cent on property
lnvestment, NJ. kruttschnitt said that
III comparison with what other cor
porat1ons are permitted TO earn it was
Quest enable whether this figure would
attract additional investment capital as
the transportation act intended
L. I. 1soree, president Of The Della
wars & Hudson, said that the 5$a per
centage figure was too low and out Of
line. He doubted whether the rail
roads could earn 59@ per cent on their
property value without the present
rate cut, and certainty not with il
Mr. Loree also held that the property
yaluaNon Of approximately Sl9,0OO,-
oo0,uO0 tlxed for all the carriers was
too low
"No one can intelligcntly analyzc the
effects of the Interstate Commerce
Commissions findings until the fnlj
transcript IS at hand said II. +.
hyfam, president OF the Chicago, Nil |
Waukee & St. Paul. "The most impor-
tant point has not been brought ont
clearly. That point is whether allow
ance IS to be made FOR the reductions
IN freight rates made either volunior-
lily or by order Of The commission las,
year.
Depends on Wage Reduction.
This is particularly vital to The
" estern roads. IN the case of the
Milwaukee & st. Paul, for
instance, rates in the first three |
months Of 1922 were Is to IS per cen, !
ton mile less than last wear. Much ,
depends on what decision viii be uado
as to wage reductions by the Railroad !
Labor Board, which is now CONSIDERING
lhe case Of more than half the railwaS
We hope and expect that the Labor
Board will grant material reductions
n pay. and to the extent that bodv
loeS grant these reductions will de-
oend how much The loss in reyen,,o
21y freight rate reductions is offset.
mere have been statements that a rate
'eductlon would increase the move
neht Of traffic. The fallacy of this
mas oeen proved IN the last sixty davs.
Pheh there has occurred a sharD IN.
rease IN freight movement without
ny lowering of rates. This eraphicallv
Illustrates that the poor tonnage has
9een due TO bad business conditione a.
mere was no freight to move" "