The New York herald., 1922-05-25
Continued from First Page.


can or should be stabilized on the pres
ent high basis Is futile"
In discussing the fixing of 5,75 per
cent as a fair return standard the
commission also observed that the Fed
eral Corporation income taxes are sub
tracted from earnings before profits are
figured and that the figure 1t set would
be approximately the equivalent OF a
fair return Of per cent" out or whicn
the Federal income tax was payable.
The general question of whether rail-
road transportation charges in the
United States had attained levels too
high for business and industry to sup
port was brought formally before the
Interstate Commerce Commission In the
autumn of 1921 on the commissions own
motion, although in response to nation
wide commercial and political sugges-
tions.
Farm organizations and representa-
tiyes of Western States. particularly
those in the grain producing area, Oh
tanned marked concessions about thai
time. to which railroads voluntarily
added a 10 per cent reduction on practl-
calIv all agricultural products all over
the United States except in New Eng
land.
Before the commission, however. the
railroad executives. statistical experts
and attorneys developed the argument
that railroad earnings were insufficient
to justify any general decreases. at
least until operating expenses and wage
payments. as regulated by the Railroad
Labor Board, had been reduced. Every
ma Tor industry in the United States was
represented in the hearings. along with
state regulative bodies. most of whom
sought lowering of transportation
charges. but diverged In the degree of
urgency which they suggested for the
commissions action. The hearings ex-
tended ov9 1Dur months.
Secretary Of Commerce Hoover. ap-
pearing at the request of the Chamber
of Commerce of the United States, pro-
posed that the commission should make
over the existing rate structures on the
principle of applying proportionately
lower freights to the bulky. low priced
raw materials of industry and agricul-
ture. such as coal. primary foodstuffs
and ores. Higher price finished mate
rials and passenger traffic, Mr.. Hoover
suggested. might bear the charges until
such time as railroad revenues had de-
veloped to the point which would allow
reductions without endangering railroad
credits. Immediate and tangible cuts. ne
said, probably could not be made.
The Secretary's position contrasted
radically with that of State commits
sions, members of which centered
good deal Of their attack on passenger
rate schedules, which they alleged TO
be too high for the traffic and in real
ity the cause of low railroad earnings.
Representatives of the steel and iron
industry asked more stringent and i'm
mediate action. principally arguing that
the commission should remove the en-
tire 40 per cent. increase put on East
ern rates on their products In 1920.
The National Industrial Traffic League
representing shippers generally. took
much the same position. The coal In
dustry elaborated Mr.. Hoover's pro,
posals. asserting that basically coal
costs Influenced prices OF so many other
commodities that cuts in rates on II
particularly upon bituminous coal. would
have a beneficial effect. The farming
interests were not so urgent particular.
ly in view of the fact that agricultura
rates went down while the discussion
was before the commission.
Members of the commission them
selves found much difficulty. 1t was In
dicated. during the weeks after the TAX.
| ing of testimony ceased. in working ou
line of action. A decision expected
| by April was many more weeks in the
making than even the traffic experts