Evening star., 1924-07-18
CUT IN GRAIN RATES
IS SREFUSEDbY c. C.
Petition of Ten Western
States Entai|ed Rail Tariff
Slash of S17,51c, eco.

The Interstate Commerce tommlS-
siop Yesterday refused a petition
brought by ten States of the MisSis
sippi- missouri Valley cereal growing
region, seeking reduced railroad rates
on grain. prain products and hay.
The petition was brought under the
leadership of Kansas and WAS sup
ported by most farm organizations
AT The same time the commission de
cided that the result of an independ-
cnt investigation il had conducted
into the level Of rates on these same
products in all sections of the United
States had demonstrated no need for
any changes. and proceedings before
il bearing upon both issues were dis
missed
Earnings of railroads in the West
ern region from the Rocky Noun
tdinS to the Great Lakes and South
as far as Texas would have been re-
duced about $l1.J00.Oc0 annually had
the contention o, the pl oduCing
States been granted. The commission
held the financial status of the car
rierS did not Justify the step, while
III general it held that the financial
condition of the Western grain farm
ers was showing a slow improvements
relieving them of the necessity :or
The reductions.
Division in Comm ission.
The commission split on the is
sues, Commissioners MCChord, NJ
MananIy. Eastman. Campbell and
Lewis refusing to follow the majority
of one. which controlled the action
Rates affected by the decision are
those applied to wheat throughout
the territory where il constitutes the
most important crop. and have pre-
sented the most troublesome and
controversial problem before the com
mission in recent Years.
States which led in presentation of
the omplaint-Kansas, Iowa. Ne
braska, North and South Dakota,
Illinois, oklahoma, Missouri Min
nesota and Louisiana-ootained. in
January, 1922. the first railroad rate
reduction granted after the war FOR
the grain products concerned. Later
in 1922 general reduction Of 10
per cent on all rates was granted
by the commission. and early in 1928.
the same western states promptly
moved before the. commission to Oh
tain Il secondary reduction on their
own products. After the first hear
of the issues and instituted its own
investigation into grain rates in all
sections of the country.
Holds Cut Possible.
Clyde NJ Reed. chairman Of the
Kansas Public Utilities Commission
for the states and farm orgauiza-
tinns, cOTtended that the depreS.e ed
price of Grain products required d
new lower level of freight rates for
all the commodities concerned. He
held also that the financial condi-
tion of western railroads would
justify the cuts. declaring valuation
Of the property used by them in
rendering transportation service was
less than the commission had hitherto
calculated, and asserting the eXpend-
maintenance in 1928 We're unduly
swollen.
The majority of the commission
refused to sustain either of the
views. declaring that western rail-
road earnings were still below the
fair return level. and that while
maintenance expenditures might
have been unduly heavy in 1928,
there was no ground for holding that
they had been so great the western
roads might stand rate reductions on
grain, their greatest commodity in
point of haul.
Commissioner Lewis in mnority Y
opinion, in which several of his
associates concurred, held with the
western states that grain had at
tanned a new and lower permanent
price level. Railroads would be
forced to recognize this. in his view.
by making lower rates or the traffic
would not bear the transportation
charge. Railroads should Compen-
safe themselves for this, he con-
tended. by increasing rates on other
commodities. and thus maintain their
earnings. AS to the United States
as a whole, the decision said that
rates on grain and grain products
and hay were reasonable. and no
desirability of even local or regional
adjustments was seen.