Evening star. [volume] (Washington, D.C.) 1854-1972, 1945-05-10
Letters to The Star
Gov. Arnall Discusses Rail Rate
CONSPIRACY AGAINST South

oONs ATHdll IlSCuSSCS Ndil NdtS
Conspiracy Against South
Editors note: In condensing this
letter, because of space limitations,
it was necessary to eliminate details
of what Gov. Arnall regards as
rate-fixing conspiracy" against the
South)
To the Editor of The Star:
In the April IL, 1945, issue of The
Evening Star, C. E. Widell, identifying
himself with the Tennessee Manufac-
turers' Association, commented upon
Lowell Mellett's column In the same
paper of March 20. This column dealt
with the Supreme Courts holding that
1t would accept original jurisdiction In
a suit in which the State of Georgia
charges that certain railroads have by
conspiracy fixed railroad rates harmful
to Georgia and it's citizens.
AS l appeared before the court on be-
half of Georgia, am constrained to
examine some. of Mr.. Widell's state
ments concerning the freight rate situa-
ton in Georgia and the South.
Mr.. Widell treats at some length the
favorable rates accorded movements Of
southern products into the rich markets
OF the Northeast. AS'he well knows, the
finished products given such rates are
extremely few in number. The large
volume OF traffic of the South accorded
favorable rates consists preponderantly
of semiflnished products and raw mate
rials.
Continued production of these raw and
semifinished products accounts largely
for the comparatively low income status
OF the Southern region. Georgia is ask
ing for dissolution of the conspiracy
among the railroads which prevents
Georgia and the South from obtaining
rates on a parity with those of manu-
factured goods of the Northeast. When
the conspiracy is broken up the indi-
vidual rail lines will be free to establish
rates that will permit Southern indus
try to expand and prosper, allowing
Georgia and the South to obtain the
greater income incident to such indus
trial expansion.
The Souths rats situation on traffic
destined to the Northeast was succinctly
given by E. r. Oliver, a vice presi-
dent OF the Southern Railway, when he
stated in an Interstate Commerce Com
mission hearing that by refusing to al
low competitive rates into the Northeast
the Northeastern railroads erected rate
wall against Southern products at the
Ohio and Potomac Rivers. Is MIR. Widell
willing to dispute that statement?
Mr.. Widell says that: I'm the South
over period of years, we have adjusted
our rates on a far different basis from
that in the North-different, in fact,
from any other region in the country."
May I be pardoned for believing and
showing that Southern industry and
Southern carriers preferred to as I'VE"
by Mr.. WidelD do not have the final
say In fixing South-to-North rates and
that in some important instances those
rates are not fixed in the South, as in
ferred by Mr.. Widell, but in the offices
OF the Association of American Rail-
roads in Washington, where Justice to
the South walks sometimes with SLOW
and heavy feet?
John j. Pelley, president of the
Association of American Railroads. or
dered, or suggested to, all railroads in
the United States that they make fates
mot IN the interest of any individual
ra1lroad-but in the interest of all of
the American railroads as a whole THIS
suggestion" was carried out, according
to public records.
Let's assume that Southern industry
wants reduction in the rates on an
important commodity moving from the
South to the North. Let's assume that
some Southern railroad is friendly to
the proposal and files it with a South
ern rate bureau. 1t winds its tortuous
way through thes, organizations until it
Is agreed upon by the Southern rail-
roads acting in concert. The Southern
railroads, acting in concert, then try
TO get the Northern roads to Join in
making the through rate but they re-
fuse to join after considering the matter
IN a meeting where they act in concert
and not individually. Then the pro-
posal reaches the interterritorial rate
bureau, headquartered in Atlanta.
known as the Joint Conference of Con-
tact Committees, which is a national
convention of rate bureaus. In this con-
ventlon there are delegates from the
Northern, Western and Southern rail-
roads who try to work out interterri-
torial rate questions. The Northern
roads act in concert in this convention:
and the Western and Southern roads
do the same. Our proposal is brought
before this convention and is discussed
IN meeting at which there are present
Southern and Northern businessmen
interested in the matter. The proposal
Is one to reduce the rate on this COM
modify on its movement from South
to North to the same level obtaining
between points in the North. The North
ern railroads, acting in concert, refuse
to join the Southern roads in establish
ing the rate. In other words, they side
with the Northern businessmen.
One Southern railroad quits the con-
spiracy and announces that it is going
to establish the rate independently not
Wlthstanding the joint action in turn
ing 1t down; whereupon certain roads
in the North quit the conspiracy also
and signify an intention to act indie
pendently in joining with the Southern
independent in establishing the rate.
The Northern railroad rate bureau
or conspiracy then appeals to the Asso-
citation of American Railroads which