The Chronicle-star combined with the Moss Point advertiser., 1945-06-15

DldnIed III iue U WptH-out aim e."
years ago, the big railroads and manufacturers still had
enough power to persuade the III 10 carry Oh ue PoAS'
Of unfair rate schedules.
The freight rate story is a complex one in its detailed
WORKINGS, but in general outline 1t is not hard to under
stand. There are two principle kinds of rates: class rates.
for most of the manufactured and packaged GOODS ana
commodity rates. for most bulk and unpackasSo IS~ ~
materials such as ore. lumber. cotton. In theory the lCC
set the rates on the basis of the amount OF each material
being shipped in the respective geographic areas. inis
WAS based on the assumption that the greater the volume.
the cheaper the railroads could handy the unit OF that
particular material. And therefore. since most OF the
manufacturers were in the North. the nothern railroads
were permitted to charge northern manufacturers rel
atively low rates for their manufactured products. The
Southern railroads were permitted to charge relatively
low rates for raw materials and commodities. The theory
behind all this sounded plausible in the beginning. but
over the years the actual facts and figures behind 1t began
10 work a terrible injustice to the South. and the situation
did much to keep the South a poor agricultural area and
to prevent the growth OF the prosperous manufacturers
which alone could bring a balanced regional economy. 1t
became cheaper for the New England shoe manufacturer
to ship his product to many areas OF the South than It
was for a manufacturer in New Orleans. Pittsburgh steel
producers invented a rate formula that made it almost
impossible for a Southern producer to undersel them.
even in a neiqhboring city.
The South had many things to attract industry-climate
water power, coal, ore, cotton, lumber. But its higher freight
rates did much to counterbalance this IN the judgment OF
a manufacturer or an investor looking for a place to locate
a plant. And this started the old vicious circle: for since
there we're few big industries in the South, there were few
big payrolls, and little cash money, and insufficient pur-
chasing power to create a prosperous market, or to afford
a high general standard of living, or to pay for a big public
school system.
This is only a general picture, of course, and it was modi-
fled in many areas with the passing years. Here and there
industries sprang up, textile and steel mills, pulp plants, and
the like. But in general, good natural resources and unfav-
orable manmade tariffs and freight rate schedules was the
economic heritage of the Southern business man And let us
not forget that many a Southern agriculturist and politician,
failing to understand the need for a. balanced economy, but
wanting to keep the labor market for his own needs, fire.
quently in the past backed measures that discouraged indus
try and kept it out of the South.
The fight against high export and import tariffs began
many years ago and by the time of the first Roosevelt admin
istration had begun to show some progress. Gradually the
tariffs were lowered, until under Secretary Hull we saw the
of the reciprocal tariff agreements and the good
neighbor policy, in which for the first time we began to
with other countries in order to sell goods cheaplV
to one another. This has stimulated trade in our ports like
Galveston, New Orleans, Gulfport and Savannah. 1t has also
in a general way given the Southern consumer a better buy
for his dollar.
In the question of freight rates the South has recently
scored one of the most momentous economic victories of
all its history. For the Interstate Commerce Commission.
after undergoing years of mounting pressure from South
ern governors. lawyers. rate experts and the like. has
at last been forced to hand down a decision ordering the
equalization of all class rates on manufactured and pack
aged products east of the Rockies. It will take months
for this decision to be worked out in its countless sched-
the growing trend of northern and eastern industry to
look toward the South for redistribution and expansion.
A great artificial barrier to Southern prosperity has
been removed. We cannot expect to see a boom pros
peritY descend upon US overnight, but the leading econ
omists say that in the next five or ten years we shall see
a sure and steady growth of Southern industry. with the
corresponding shrinkaqe and dispersal of the teeminq and
ovsrcrowded eastern centers. And this is as it should be.
Our country too long has been lopsided economically
and eulturallY. It has given rise to rivalries and emotional
disturbances that have hurt both sections. We think it
folly to constantly blame the North for every one of our
ills. for many of these are our responsibility. But the
freight rates were one artificial barrier that were clearly
imposed upon US.
1t is a splendid thing that Southern leaders like Young
Governor Ellis Arnal of Georgia have been able to abolish
his barrier and pave the way for a gradual equalization of
the industrial and economic resources of the country