Evening star., 1933-08-05
Denies Petition Claiming
Level Is Out of Line With
Other Costs-Cites Present
Traffic Volume as Evidence
RAILROADS SAY SLASH
WOULD MEAN COLLAPSE
Could Not Pay Interest and Rental
Charges on Smaller Income,
Executives Declare - Recent
Commodity Price Rise Held Not
to Be Controlling Factor.
Dy the Associated Press.

The Interstate Commerce Com
mission today refused to grant a
general reduction in railroad
freight rates.
The commission held that exist
ing freight rates and charges, in
the aggregate, "are not shown to
be unreasonable"
The action was on q petition
fled several months ago by the
National Grange, American Farm
Bureau Federation, Farmers Co.
Operative Union, National Coal
Association and the National
Lumbermen's Association. Other
organizations later Joined in the
request.
The petition was part Of a campaign
by basic industries to bring freight
rates down to what they regarded as
the general level of prices.
Cite Other Cost Cuts.
It asserted all other costs OF doing
business had come down, but that
freight rates remained at the prosperity
level.
on the other hand, the railroads as
serted, If rates were slasked many OF
them could not meet their interest and
rental payments and some would be
forced to bankruptcy.
The roads contended that even with
the freight bill surcharges authorized
by the commission in october, 1881,
many carriers had been unable to meet
their obligations.
The commission today said the pres
ent rate level was not depressing the
volume of traffic or business OF the
country as whole and that general
rate reductions would not stimulate
the aggregate volume Of trafi1c by rail-
road except SO far as they would tend
to recover traffic from competing
forms of transportation"
The commission held that latter al
lowance for the recent upturn IN COM
modify prices the freight rate level Is
sttll relatively higher than the commod-
ity price level"
The commission found, however:
THAT the value OF commodities trans
ported Is one factor In determining rea-
sonable rates, but commodity prices
alone are not controlling.
Cite Competition Losses.
'That the earnings of rail carriers
have been greatly affected by loss OF
traffic to motor and water carriers and
by reduced rates to meet competition OF
such carriers.
carriers in 1882 was the lowest IN many
years, being only approximately half
that of 1921, q depression year. ana
that after making full allowance for the
recent upturn In the volume OF tramc,
II rates in general were lowered as mucn
as 10 per cent the net revenue IN the
near future would probably fall short OF
meeting fixed charges.
THAT general rate reductions. by still
further lowering the revenues of the rail
carriers. would threaten the contipu-
ance Of adequate railroad service. and,
by preventing maintenance and other
work, would tend to increase unemploy-
ment.
Preservation Held Vital.
"That preservation Of an adequate
railroad transportation machine Is more
important to the country than lowered
freight rates.
,rpon which to determine the reason
ableness of rates on particular COM
modities or descriptions Of trafhc. Rate
revisions must be continued without
abatement to meet new conditions! Rate
peaks must be retained where Just1neo
and cut down where found unjust.
"That existing freight rates ana
charges subject to the interstate COM
merce act, in the aggregate, IN the
country as q whole or in the several
rate groups, or as applied to specined
commodities or descriptions OF tramc,
are not shown to be unreasonable.
Three Offer Dissent.
Commissioners Aitchison, Porter ana
Lee dissented from the maJoliy.
Aitchison, in writing the oissenuns
opinion. said freight rates stood upon
"an lnreasonably high level and their
maintenance constituted violation OF
The prohibitions Of the interstate COM
merce act against unjust and unfea-
sonable rates"
"For the best interests Of the ran
carriers themselves, to ameliorate the
distressing conditions affecting inous-
try. and to further the far-reachang
ular,s for national industrial recovery
which have been put under way.
Aitchison asserted, "those railroad
freiRht rates which now stand as PIN
nacles far above their pre-war Levers
should be brought more into line Win
rates which have resulted from the
process Of wholesale and often ndis-
criminate reductions made 10 meet
competition with other forms OF trans
port. or In warfare between the rail-
roads themselves"