The Waterbury Democrat., 1943-03-25

Inc IVA report, four yenFB in President Roosevelt with a brief, foI
 It described the present regional xsd system Of freight rates. as . barrier Co national productive ness" and said standardization was 11cessary if the south and west were lp achieve greater industrial dee vclopment Co absorb the surplus that I4 normally uneconomically ern- nlcyed in producing raw materials, including agricultural stables such as grain and cotton"
 IVA chairman, David '. LIllen- thai. in Q letter to Mfr. Roosevelt, in- fercntiaily admitted the difHculty ~ accomplishing his recommenda- Cons during the war.
 Among other measures required CO keep the economic order at Q high level after the war" Lilienthal told the president, "the country will need much more manufacturing inc dustry than it had an any year be- fore we entered the war, accom- panied by relatively less dependence on the production of agricultural staples and other raw materials"
 This basic premise, upon which he IVA report was paced through out It's more than 100 pages of state- nents and highly technical tables, followed closely the postwar pattern laid down for Congress and recom- nended by the chief executive two weeks ago when the national re Sources planning board took virtual ly the same position concerning post war industry.
 The IVA has. been studying the complicated freight rate structure since 1883 because the Tennessee Valley twas handicapped by virtue of its location in Q high freight rate Fation." Lilienthal explained to Mir. Roosevelt that in the continuing studies of htis problem, the explors ntions of the IVA "broadened from the Tennessee valley to the whole country" because "the system of rates in any one region affects pro- duction and distribution in all re- gions."
 The country is divided into five major freight rate territories. Ac- Cording to the IVA, the inost-fa- vored territory is the so-called otfi- eiai territory which is bordered by the Mississippi river on the west and tho Ohio and Potomac on the south and generally including the nations most productive and most concen- trated area-the east.
 Regional rate differences are just justlfled by cost differences" the re. port said. It then proceeded to brand as "fallacious" the conten- tion that higher freight rates out- sitie the ofilcial territory are justi- fled because rates are lower on raw materials than on manufactured products and that the east is the primary source of manufactured products.
 ''The American people are denied their right to enjoy the benefit of the lowest-cost production consist ent with the law and social policy" the IVA said. '"rhe present freight rate system works out so that "a part of the profits of low-cost pro- ducers is conflscated so as to keep high.cost producers doing business ct profit"
 "The American people are denied their right to enjoy the bene- fit of lowest cost production consistent with the law and social policy because of the present var- lance in government-determined prices of transportation"
 It cited examples to show that factories in one part of the country pay more to ship their products than favorites in other areas even over the same distances.
 More abundant contribution by the south and west most definitely does not require a geographical re- distribution of existing factories" the report said. but 1t does require clearing away the freight rate hand- leap that hampers and delays the development of these regions"
 Continuing, the IVA experts said new factory jobs in the south and west would much more greatly pro- mote needed agricultural readjust- ment than the same number of new jobs" in the heavily y-industrial east.
 Indigenous industrial growth would help an additional number of farmers diversity their production =. and provide still trade and serv- ice jobs for still another group of farmers"
 This argument was offered coun- ter to the oncentration-migration" theory involving the movement of agricultural workers from the south and west to presently-established Industrial areas in order to cut down on the surplus population living of the land in unproductive or over- staffed farming areas.