Evening star. [volume] (Washington, D.C.) 1854-1972, 1945-08-19
South Foresees New Era
In Freight Rate Changes
lCC Order for Temporary 10 Per Cent Up and
Down Adjustment Expected to End Advantage
Claimed Held by Easts Industry
BY joseph HanI0n


Many factors other than freight rates,
OF course, contributed to the growth of
industry in the Northeast. 1t was the
nrst part of the country to feel the i'm
pact OF the industrial revolution. 1t
was and is the most thickly settled part
OF the continent, providing ready access
to markets. Labor was plentiful and
was augmented by immigration. Capi-
tai accumulated there.
But the Transportation Board of In
vestigation and Research, in its final
report on interregional freight rates,
reached the conclusion the IVA had
arrived at in a study a year before
something should be done to increase
manufacturing in the South and West
to increase the productivity of the Ma
ton as a whole. The Transportation
Board acknowledged that differences in
freight rates tended to perpetuate in
dustrial concentration in the Northeast
and to retard the development of other
sections of the country.
The iva report, strong argument
for elimination of regional freight rates,
conceding the Northeast had advantages
which promoted its industrialization,
held, however, the South and West had
possibilities which had been stified by
discriminatory freight rates.
Even specifically small differences In
freight costs have an important bearing
on profit possibilities and hence on
manufacturing opportunities, the IVA
report held. 1t cited the freight charge
for domestic hot-water heater, shipped
from Chattanooga in Southern territory,
to Peoria in official territory, and the
same heater shipped from Pittsburgh, in
official territory, to Peoria. The freight
cost difference, favoring the Pittsburgh
shipper, although Pittsburgh and Chat
tanooga are equidistant from Peoria, was
So cents, on an item valued at the fac
tory at SAL. That 58-cent difference,
however, was computed as IA per cent
of the profit
Another case cited by IVA was that
OF Dallas manufacturer of toilet prepa-
rations, ink, paste and floor polish. This
company's charges for inbound freight
in 1943 were 70 per cent higher than
they would have been for an equal
movement of the same commodities In
official territory. The company, for in
stance, bought glass bottles at Alton,
Ill, and paid s243 car in freight charges
against an official territory rate of s120
for the same shipment.
Eliminating the handicaps of this
company on both inbound and out
bound freight, iva found, would have
permitted a reduction of per cent in
the price of its product, or an increase
in profits equal to q per cent return
on its invested capital and surplus. or
an increase of lit per cent in the wages
OF its employees engaged in manufac-
turing.
Coming on top of the war-born ex-
pansion of industry in the South, the
1CC order looking toward equalization
OF freight rates provides the South with
a golden opportunity to prove its conten-
ton that regional rates have held it
back economically. The next 5 or 10
years will tell the tale.
The ICC took its action only after
six years of investigation and hearings.
and its decision was by vote of 9 to 2.
1t is not expected to reverse itself. The
South. at long last. is on the way to
equality of freight rates
Printed by Special Arrangement With the s.
Louis PoSt-DiSpatchb