Evening star., 1941-09-04
Carriers Delay
Reduction in
Rates on-0i|
Refiners Seek
Cut to Operate
With Tank Cars


over railroads from the Southwe t
was expected today, as nearly 100
important oil and railway company
executives made plans in closed
session at the Carlton Hotel.
The big petroleum companies
came armed with a program for a
wholesale reduction Of Oil trans
portation rates, spokesman said,
and this was being thrashed out
with railroad presidents and traffic
managers behind closed doors.
The rate cut proposals submitted
by the oil representatives were ap-
parently OF sucn sweeping nature
that no quick approval could be
granted by the railroads. H. A.
Gilbert. director of transportation
for the Office of the Defense Pc
troleum o-ordinator. came out
of the meeting after noon and an
nounced that the session would
continue through the day He said
the oilmen had submitted pro-
posal for a reduction of rates for
transporting both crude and refined
petroleum on all major lines be-
tween the oil sources and the East
He said he expected the proposal,
II approved to 60 into effect with
immediate approval by the Inter-
state Commerce Commission.
Discussion of the proposal was
largely in the hands of four men.
traffic representatives of lines in
four areas of the country. They
were J. A. Farmar, Chicago. w. F.
Knoblock. St. Louis; J. G. Kerr, At
lanta, and D. 7. Lawrence, New
York.
A E. Cleveland. vice president
of the Association of American Rail-
roads in charge OF traffic. presided
at the meeting. The oil interests
we're led by C. F.. Dowd. chairman
of the Subcommittee on Tank Cars
of the Eastern Advisory Committee
to Defense Petroleum Co-ordinator
1ckes.
If the oil companies and railways
strike a satisfactory bargain today
on costs of moving petroleum, and
who shall absorb them, quick solu-
tion of the Eastern motor fuel
shortage is in view. according to
Robert S. Henry, assistant to the
president of the railroad association.
He pointed out that j, j. Pelley.
president of the group testified yes
terday before Senate committee
that enough cars are now idle to
meet the demand. Mr.. Henry de-
clared the question is now one OF
rail rates.
Senator Maloney. Democrat Of
Connecticut. chairman of the special
committee investigating the situa-
ton. was frankly predicting that
there will be no shortage because the
discussion will result in using entire
trains of tank cars.
He feared. however. that a price
rise may result for consumers
though he expressed hope 1t would
be small" This is problem his
committee will delve into, he said.
A suggestion that threats OF an
Eastern gasoline shortage had been
planned in order to facilitate con-
struction OF a vast pipeline from
Texas and Louisiana to the Atlantic
Seaboard was advanced today by
Senator ODaniel, Democrat, OF
Texas. a member of the Senate
committee.
Asserting that hearings of the
Senate group proved there is no
shortage of petroleum or transpor-
tation to get the products to the
East" Senator ODaniel suggested
that the committee try to develop
what's back of this alleged shortage.
Rail Costs Much Higher.
Figures have been given showing
that a tanker ship will carry oil for
0.476 cents a gallon, whereas the
cost in tank car is now 3.05 cents
a gallon. If reduction in railway
charges is decided upon the use OF
cars could be put into effect quickly
it was said.
A member of the Interstate Com
merce Commission staff said today
that this agency stands ready to
approve rate reductions on one day S
notice-waiving the usual 30-day
notification required before new
tariffs can go into effect.
Mr.. Henry indicated the rail-
roads willingness to cooperate by
citing figures. He said oil COM
paiiies have requested 81 specific
reductions in the past six weeks,
and Al of these had been agreed
to up to Tuesday. Most of the rest
are so recent that they are still
under favorable consideration, he
declared.
Present on behalf of the railroads
were traffic managers of all major
trunk lines in the East, Southeast,
Southwest and West, it was stated.
Enough Cars Available.
The Senate committee investi-
eating the oil shortage was told
again today that there are enough
idle tank cars on railroad sidings
to haul all the gasoline and other
petroleum products necessary.
Ralph Budd. transportation COM
missioner of the Advisory Commits
sion to the Council of National De-
fense, testified that an independent
check made at his request August
7. showed there were 29,325 empty
tank cars idle and uncalled for
far more than needed to make up
the deficit in the Eastern gasoline
shortage.
His testimony corroborated that
given yesterday by Mr.. Pelley.
Senator Burton, Republican, oi
Ohio, and a former Mayor Of Cleve-
land, who has taken an active part
in the investigation, remarked dur
| ing the testimony of Mr.. Budd he
thought the use of the available
tank cars would be an Ideal" tenn
porary solution to the shortage.
Opposes Pipe Lines.
Throughout the inquiry Senator
Burton has indicated strong opposi'
ton to a proposal to construct
series of pipe lines from the South
west oil fields to the East Coast
estimated to cost approximately
S1oo 200, 900, and also require th'
(see GASOLINE. Page A-l7J