Evening star. [volume] (Washington, D.C.) 1854-1972, 1933-08-06
!, c. c. REJECTS PLEA
FOR FREIGHT SLASH
Backs General Rates Basis,
-
s but Suggests Some Re-
s~~
adjustments.
BY the Associated Press.

49, Inc interstate SOHINeICc SOIililAo-
zion in 7-to-3 decision yesterday held
the general railroad freight rate struc-
sture to be reasonable in the light OF
present conditions and refused to order
2 q blanket reduction as requested by
Farm. lumber, coal and other interests.
- The commission asserted, however,
that the decision must not be regarded
las holding that all existing charges
were fair and suggested the carriers
--consider revisions downward In rates
~on grain, lumber and export coal
- Rate revisions must be continued
without abatement to meet new condl-
tons" it said. Rate peaks must be
retained where justified and cut down
where found unjust"
The decision was on petition nled
last January by farm organizations, the
National Coal Association and the Ma
tional Lumber Manufacturers AsSocla-
ton, which held freight rates had been
maintained at prosperity period levels
while commodity prices dropped
The commission said that after al
loWance for the recent upturn in COM
modify prices the freight rate level lis
still relatively higher than the COM
modify price level
Other Factors Considered.
alone were not the controlling factor
in determining the reasonableness OF
rates; that present rates as whole
were mot depressing the volume OF
traffic or business of the country" and
that general rate reductions would not
stimulate the aggregate volume OF tra1-
flc by railroad, except so far as they
would tend to recover traffic from COM
peting forms of transportation" -.
The majority of the commission said
that net revenues Of the carriers last
year were only half that of the "depres-
sion year" of 1921, and that after max
ing full allowance for the recent upturn
in the volume of traffic. if rates in gen.
eraI were lowered as much as 10 pei
cent the net revenue in the near future
would probably fall short of meeting
fixed charges" by more than S20000,O0O
By still further lowering the revenues
of the carriers, the decision said
blanket cut would threaten the con-
tinuance of adequate railroad service
and. by preventing maintenance and
other work would tend to increase un-
employment"
20. with a general reduction in freight
rates no greater than 10 per cent" il
continued, unless there were a greater
increase in traffic than now seems prob
eminent aid we're extended, many more
carriers would be forced into receiver
ship or reorganization with consequent
serious losses to investors in railroad
securities, among whom are many saw
ings banks and life insurance COM
panies."
Aitchison Dissents.
In dissenting opinion. Commissioner
CLYDE B. Aitchison said the existing rate
level constituted a violation OF the In
terstate commerce acts provisions pro-
hibiting unjust and unreasonable rates
and while the Industrial Recovery pro-
gram presented "countervailing tenden-
cies" it was not intended to cure NAL
adjustments and disparities in rates
"The successful consummation Of the
policies and plans now under way said
Aitchison, calls for rate structure
better adapted to what the traffic car
bear and what it will bear, and not ad-
herence to schedules which simply force
tonnage to other forms Of transport
shut it off from movement, or compe
the relocation of industry.
I'VE ought to settle the matter and
not leave it In the limbo Of continued
uncertainty as Is done by the majority
report"
Willie IeluSlllS IllC dPp4iOdIiOAi AVA
lower general rates, the commission
pointed out that the emergency sur
charges on freight which it authorized
in October, 1881, will expire September
80 after several extensions. This alone
will cut the Nations freight bill by
from s60.000,OO0 to S100,oo0,000.
Excluding these surcharges, the COM
mission said the present rate level was
more than 20 per cent below that OF
1920 and more than 10 per cent under
: that Immediately following the rate cut
Of 1922.
The commission suggested that the
railroads consider placing in effect vol
unfairly the reduced grain rates 1t
ordered on July l, 1880. The Supreme
Court went against the commission in
this proceeding and ordered the old
rates restored. The commission re-
opened the case and hearings are ex-
pected to be concluded at an early date.
Some Changes Favored.
Although we are not warranted In
this proceeding in requiring readjust-
ments of grain rates or even in def
nitely suggesting that respondents
should make such readjustments, the
commission said, nevertheless they
should give consideration to voluntary
revision of their rates in the light Of our
original decision and of the additional
evidence developed at the further hear
ings, so far as that Is at present pos
sible. This applies particularly to GER
tain border adjustments
The commission said it felt warranted
in saying that there was nothing to in
dictate that undue prejudice would re-
suit from the establishment Of lower
export rates on COAL
1.-THE expectation of bituminous coal
to Europe and South America has al
most ceased" 1t said, although in for
mer years there was large movement
from which the rail carriers derived con-
siderable revenue.
The carriers have been giving con-
slderation to requests Of coal operators
for lower export rates intended to re-
vive this traffic, but favorable action has
been prevented, at least in part, by the
fear that the carriers would be forced
to make similar reductions on coal NOV
ing beyond the ports to destinations In
the United States and Canada.
This record Is insufficient upon
which to base an opinion as to whether
undue prejudice would result from
establishment of such export rates, but
We feel warranted in saying there is
nothing to indicate that undue prejudice
WOulQ TeSulC from CQe establishment OF
such rates. Carriers are urged to give
further consideration to the subject"
The commission also suggested that
the carriers might well give considera.
ton to the inroads upon the lumber
traffic by trucks and water carriers, par.
ticularly the latter, with a view to de.
termining whether there are instances
in which lower rates might result II
greater rail movement and net revenue.
Close Study Urged.
"The same comment may be made
Of number of other commodities" il
said, adding:
LAS soon as sufficient time has elapsed
SO that it can be determined with reas.
enable certainty that the prices of par.
ticular commodities have stabilized or
a level lower than that of commoditie.
in general. and that the rates on such