Evening star. [volume] (Washington, D.C.) 1854-1972, 1928-07-14
TRADE UNCERTAIN
ABOUT NEW RATES
Section of Middle West Is Aft.
fected by Schedules on
35 Commodities.

pecial Dispatch to The Star.

NEW YORK. July l4.-Producers of
raw materials manufacturers, distribu-
tors and retail merchants in a certain
section of the Middle West were thrown
into spasm of uncertainty today
Moreover, their unrest may spread to
every corner of the country and in
volve totally different basis of distri-
button and merchandising.
A minute after midnight today. a
revolutionary change in freight rates
went into effect in parts of Kansas and
Missouri and in Texas, Oklahoma, Ar
kansas and that part of Louisiana west
of the Mississippi. Rates into and opt
of this territory from all points east of
the Rocky Mountains are involved. All
class rates and rates on IS groups of
commodities are named. and the main
trouble Is that nobody. from the rail-
roads to the ultimate consumer. knows
just what effect the new schedules will
have or whether they are revisions up
ward or downward.
Fought Desperately.
The new schedules are the result Of
deliberations Of the Interstate Com
merce Commission. Desperate efforts on
the part of business interests have been
made without avail to keep them from
going into effect. They have been re-
vised on, a mileage basis, with a reduc-
ton in most cases for long haufs and
increases for short haulS. The old basis
was a group-to-group basis in shipping
from cities within the territory. As
result rates on some commodities will be
20 YNd tfsfl hn
Some cities will suffer and some will
benefit.
Interests which have cultivated a
certain sales territory may lose it to
those more advantageously situated
from the new rate basis Railroads
may find their revenues cut, for al
though there are some increases, the
railroad men feel the general curve of
the new rates Is downward
Must Do Better.
Railroads have got to do better than
they have so far this year or fall far
behind both 1926 and 1926 Most of
the carriers will earn their dividend
requirements adequately. but it may be
hard shedding for some of the lines
running into this Southwestern terri
tory, Were 1t not for the fact that
the Interstate Commerce Commission
has not dared apply the new rates
to agricultural products and live stock,
the main shipments out of this terri
tory. until they tried them out on the
minor commodities. the entire district
might be thrown into confusion.
The move is of Importance not only
to the Southwest but to all sections.
For II the confusion continues. 1t will
mean that practically all wholesale pur-
rh tTcr xstin hn h
tory basis instead of on IA delivered
basis. II the change to that system
Is effected. 1t is likely to spread to
other sections with wide effect on
competition in various markets.
On the other hand. many of the i'll
dividual cities in the territory affected
declare they have been Disseminated
against by the group to group rating
plan in the past and that the new
schedules will equaliae that discrimina-
ton. At any rate no one will know
definitely where trade stands for year
to come.
Crop Outlook Is Bright
The crop outlook In the territory Is
very bright. Purchasing power is I'M
impaired and there is not much chance
that retail sales will drop below the
1927 level, but there is a chance that
they will be smaller than they would
have been If the element Of uncertainty
had not been interjected into the sit
uation. III all but two OF the States
In question the bank debts for the last
month have been higher than in the
corresponding period of 1927. This in
dcates q strong volume of buying. One
of these States Is Oklahoma, where the
agitation for the new rates started, Yet
Oklahoma'S wheat harvest is expected
To be around 20 per cent higher than
last year
II Is unlikely that the change will
be of sufficient influence 10 affect busi-
ness prosperity, but the uncertainty is
by no means welcome TO business men