Evening star., 1944-08-27
Porudox Is Seen in
New Antitrust Suit
Railroad Plight Held Similar to
That of Coal Industry.
By J. A. For.

Something Of paradox in Govern
ment has been presented In the past
few days which have seen President
Roosevelt urging on Congress the. re-
enactment OF legislation to stabilize the
prices producers get for coal, while at
the same time the Justice Department
was moving to break up the machinery
employed to fix uniform rates on about
90 per cent of the railroad mileage Of
the country.
In a letter to Representative Flanna-
gan. Democrat. Of Virginia, Mr.. Roose-
welt bespoke renewal Of the Bituminow
Coat Act, which expired year ago, de-
claring that in the absence Of such leg
islation. which penalties producers SELL
ing coal below flxed prices, the industry
Will return ito the old ways Of cut
throat competition" with the chaos this
entails.
That same prospect, it might be said.
logically would be held out to the West
ern railroads by the Justice Depart
ments antitrust suit which aims at
competitive rate making, but for the
saving factor afforded by the general
powers Of the Interstate Commerce
Commission to put floor under rates
as we'll as ceiling-in order to main
tain an adequate transportation sys-
tenn.
The Justice Department suit, brought
under the provisions Of the Sherman Act,
is based broadly on charges that the
Western carriers have used coercive tao
tics and acted in collusion to Ak rates
stifle petition-rail, truck and pipe:
line-and block improvements in serv-
ice. to the detriment of the Western
part of the United States, over a period
Of years. Substantially 1t repeats allega-
tions made by the Justice Department
a year ago in seeking, unsuccessfully,
legislation to regulate the rate bureaus
through which proposed freight and
passenger charges are channeled to the
Interstate Commerce Commission. 1t Is
on all fours, also, with a speech several
weeks ago by Vice President Wallace
who charged that discriminatory rates
were choking of industrial develoument
quent advantage of the East.
The suit, which would end these re-
putedly adverse practices, also seeks the
dissolution Of the Association Of Amer
lean Railroads and the Western Asso-
citation of Railway Executives, which are
accused OF fostering the practices COM
planned of. And. striking a note that
was popular at the turn Of the century,
the suit also attaches responbility to the
great banking firms of Morgan and
Kohn-Loeb, which are said to have a.
large financial stake In the operation
OF the carriers.
All this, the department complaint
says, threatens TO bring about a car
telization Of transportation In the West
ern part Of the United States under
the domination of q combination of
financial. industrial and railroad In.
terests."
The suit comes at a time when the
Interstate Commerce Commission, which
regulates the charges Of rail, water and
highway carriers, and pipelines, has
Just completed an investigation Of rail-
road class rates all over the country
and Is at work In preparing the re-
port which will decide If they should be
lowered. = The South-less has been
heard from the West-has been ex-
tremely vocal on the rate issue, demand
Ing, generally. . mile-for-mile parity
with the East, but the commission in
vestigation took in the whole country,
and likewise went into the question of
whether the classification for freight
shipments which may differ between
various region. should be made uniform.
1nasmuch as 1t Is the commissions
responsibility to see that rates are rea-
sonable. 1t might seem that the Justice
Department was going into foreign ter
ritory in hitting at alleged abuses. The
department, however. it may be said on
good authority, takes the stand that a
rate may measure up to the ICC stand
ard Of reasonableness, and still be the
product of concerted action that makes
the principals involved subject to anti
trust proceedings. Without regard to
whether unrestricted rate-cutting is
good for the industry-and Congress
has sought by regulation to break this
up throughout the transportation in
dustry-the department has taken the
stand that where there is free play in
competition. the public gets more rea-
sonable rates.
An unusual aspect of the present suit
Is that last year, when the fight for
restrictive legislation was being made,
shipping interests, including the Ma
tional Industrial Trafic League, said
they had no complaint, and the late
Joseph B. Eastman Of the ICC, who was
President Roosevelts No. transporta-
ton adviser, told the Senate Interstate
Commerce Committee that he believed
the criticism Of rates stemmed not from
shippers, but from "the lawyers and
economists of the Department Of JUS
tice" .
Railroad spokesmen have been quick
to charge that the suit is inspired by
political motives, with an eye to the
presidential campaign. It also has been
pointed out that allegations that the
Western lines Jagged in service improve
ments do not jibe with the record, mas
much as such innovations as stream
liners made their first appearance there,
while de luxe coach travel likewise was
q Western development.
Whatever the underlying reason for
the suit may be, it must be said that the
attack on the railroads is in marked