The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1928-04-05
Conditions Keep Firms
From Establishing Plants
in Indiana.
LOSE IN COMPETITION
Rivals in Other Sections
Profit From Special
Tariffs.
This is the third OF a series of articles.
showing how the freight rate situation
affects industries OF Indianapolis.
BY CHARLES CARLL

By CHAhLES OAhbL
The effect of high freight rates
into and out of Indiana is fold
The first blow is against the State
as whole 1t is the general knowl-
edge of the condition that prevents
firms from placing factories with
in the limits Of many parts Of In
| diana.
The second is against the COM
panies that come into the State,
but later learn the profit of the
business is being eaten away by
transportation costs.
Production Cost Often Low
Company heads are in agreement
on the fact that transportation cost
when excessive is an item that can
not be cut down or made up.
Companies in Indiana that have
to sell goods on the markets outside
of the State in conception with
firms having preferential rates are
up against this:
Many of the crude products need
ed as the basis or as part of the
finished product come from terri
tory where their competitors are re-
ceiving lower freight rates. Each
few cents per pound, car or ton in
creases the production cost of that
company before the materials are
unloaded in storage bins. AS to the
manufacturing it is likely that the
direct production cost can be kept
down and in many instances might
be cheaper than that of their COM
petitor with the freight rate adj
vantage.
Seek Equal Rates
Then comes the finished product. !
In it is contained the commodity |
for which the company was first |
forced to pay more for than its /
competitor. Then to ship the COM
pleted product to the market to /
which the out State competing firm
has cheaper access costs more /
money.
But in order to be able to sell |
the goods and give the competitor |.
any opposition at all the Indiana
firm must keep its price within an
equal range of the outsider.
AAAdNs dSNOl Qll4S " bldillC dulIlOI -
tiles, is done by cutting to the bore
every other necessity in the plants,
losing lot of business and in some
instances is the direct cause for
capital of a comapny seeping
through the fingers of the man
ayers.
The purpose of the war against
] h lob fV-nT 1aN
manager, is Ito see that the rates
assessed for transporting raw ma
terials as well as those assessed for
transporting our finished product
are on a fairly comparable basis
with transportation charges as
Sessed on other industries engaged
in the manufacture of similar ar
ticles with whom we compete"
State, Companies Lose
He gives the following example:
IF a brick industry at Brazil,
Ind, is paying Is per cent more
for transportation of its raw ma
terial than similar plant at Dan
vile or Galesburg, H., the Brazil
company is handicapped IS per
cent at the market price in COM
petition with the marketers in the
other two cities. If it costs IS per
cent more to transport Brazil brick
to the markets than it costs the
Illinois firms, the Indiana company
must add another 25 per cent
handicap. Under those conditions
the Brazil plant can not survive,
even if the plant is as well man
aged as those of the competitors"
1t is through this situation that
a plant similarly situated as the
one referred to above probably will
tear up the. foundry and move to
another location where the favor
able rates can be enjoyed. In this
way both the companies and the
State, as a whole, pay for the dis
criminatory rates.
One of Indianas largest manu-
facturers was laboring under a
handicap of about 100000 a year
in excessive freight rates in the
purchase of fuel oil. Investigation
showed that in this instance the
firm was paying 141s cents per hun
dred more than competito pur-
chasing oil from the same origin
point.
There is an industry located in
Indianapolis that produces creosote
which is used for treating lumber.
This firm is in direct competition
with similar plants located at ST.
Louis, Chicago, Cincinnati, Louis
vile and other points. Investigation
showed that this local plant was
operating at one-fifth its capacity
because freight rates prevented its
competition with other firms. In
this instance a complaint has been
filed before the Interstate Com