Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1922-05-25
CUT 10 PER CENT
Continued from Page ons)

Continued from Page One)
have been recently put into effect.
Passenger charges and Pullman fares
also are left unchanged by today's
decisic-.
With it's decision on rates the COM
mission announced also its detcrmi-
ration Of SIS per cent. as the rcas-
enable annual return which carriers
in the future would be entitled to
earn on their actual capital invest
mcnt. This compares with 6 per
cent, the reasonable return lcvel fix
ed under the transportation act for
tie period expiring March /.
Railroads we required to signify
IT, the commission before May 81
whether they would voluntarily make
new schedules complying with the
decision 2" require the commission
t. issue : formal and detailed or
der for the alteration.
Though divergence in view within
the commission was indicated by
several supplemental concurring or
dissenting opinions, the full wei :.
or the commission appeared to be
thrown behind the statement made
in the majority and contrc" ng
opinion that general reduction in
the rate level as substantial as the
condition of tho carriers w. unit
will tend to stabilize the conditions
under wi II commerce and indusry
are carried on, 18th consequent full
er assurance to carriers Of realizing
a fair return"
On the statement OF the commits
sion that rail freight revenues in
1: approXi- .ated $4,000. 600. GOO
today's decision will reduce the ma
ticral freight bill by 100000, 900 per
year.
AS stated in technical language to
the railroads, the Commission It'd
that after July l It would hold I'M
reasonable rates Including more
than the folio ing percen ages Of in
crease over tie rates in eff = mme-
diately prior 20 August IS, 1920"
and set up the territorial schedules
as follows:
In the Eastern group, also being
points in Illinois territory and be-
tween Illinois territory and the east
ern group, 26 percent instead of the
Az percent authorized in the decision
last cited Increased rates Of 1920.
IN the western group and between
the western group and Illinois terri
tory, 21.5 percent instead of the IS
percent so authorized
In the southern and mountain Pa
icific group, 126 percent instead Of the
70 percent so authorized.
ON er-territorial traffic except
as otherwise provided herein, 90 per-
cent instead Of the SO 1-3 percent so
authorized"
The commission after reviewing
the arguments for and against rate
reductions as made before by ship
pers, railroads, and representatives
OF geographical areas of the country,
declared that as rates had been
pushed up by horizontal percentage
increases "a similar process should
be followed" in bringing them down
10 meet lowered expenses of opera
ton This conceded with the ar
guments which President Harding
advanced before railroad executives
at dinner conference last week, in
favor of rate reductions affecting
sharply basic commodities but Ieay-
ing untouched existing rates on high
priced finished commodities which
generally take class rates.
practically all agree that stability
OF freight rates is highly desirable, :"
the majority opinion declared, and
that normal traffic may not well be
expected until the present wide
spread expectation Of rate reductions
is realized or dispelled to assume that
rates can or should be stabilized on
the present high basis is futile"
In discussing the fixing of SIS per-
cent as fair return standard the
commission also observed that the
federal corporation income taxes are
subtracted from earnings before pro-
fits are figured and that the figure it
set would be approximately the
equivalent OF fair return Of six per-
cent, out of which the federal in
come tax was PAYABLE