Show General Reduction in Freight Charges Declared Impossible Y If Railroads Are to Succeed I Traffic Manager of Southern Pacific Writes Comprehensive Comprehensive Com Corn Argument Against Cut in Reply to Request of California Man in Behalf of Farmers Farmers' I I THERE I HERE can be no general reduction in in freight rates at this 1 time e with all the savings savings' that the r railroads can I possibly make as a result of wage reductions and other economies I they the can hope to earn only with greatest great st difficulty difficult the thc amount I necessary to meet their fixed charges for 1921 I I IThe The flie above comprehensively sets forth the argument presented I Iby by G. G W Y Luce freight traffic manager of the Southern Pacific I Railroad company and forms part of a letter which he recently wrote to Charles P. P Bayer president of the California Association I of C Commercial Secretaries a copy of which was received here toda today FACTOR IN BUSINESS Mr Bayer Bacr addressed Mr Ir Luco Luce- as to whether r. r rates could be red reduced ced cedat at this time stating that farmers shippers shippers shippers ship ship- pers and others felt that hat with the re recent recent ro- ro cent reduction re of ot 12 2 per rent in railway wages wag and lowering of ot commodity prices the tho railroads should should hasten the the- return to normal times b by making general general general gen gen- eral reductions in the britts tariffs Mr Bayer Baer asked Mr Luce as to whether it was n not t a fact that high freight r tt's were preventing the mo movement m nt of ot products to market thus adversely af affecting nt- nt bu business The reply of or Mr Ir Luce to Mr 1 Bayer Barer in part follows letter of ot Jul July 13 Replying to your our I am glad to have hae this opportunity of rt explaining tho the railroad freight rate sit sit sit- ua nation llon It It Is to th interests of the tarm farmer r rand and shipper r that the railroads should have n opportunity to rehabilitate that th ad nd ad- ad properties so flO they may give service in the future ture particularly particular particular- ly h when business 5 revives reI An Increase if It this is la to toI tobe net in-net earnings Is necessary I Fhe be accomplished REALIZES SITUATION The National Industrial Traffic It league leacue on one of ot- the the- country's leading organizations orI or or- of ot shippers in working for tor I I reductions In In rates tes in the past realizes s the situatIon Recently it adopted 1 res- res opposing lg downward r revision e illI of ot rates until th hr carriers have had an nn opportunity to adjust their expenses so so sons o ns os to Insure proper transportation serIce ser ser- ice I Under Ro government nt control the r rtH- rtH jl- jl rn rr r not permitted 1 as ns were werl other bu business enterprises s. s to make lerr and roll ron up up big surpluses Ion on which the they might draw during periods p of ot They were w restricted reto re- re to the same net return they earned during the three thre years before I ithe jho the United States entered d the war I properties Ye were e allowed to do- do The number r of ot carI canI car can I available RIt a Lt lE actually decreased cd un un- ider cr government go control The rail rall- mu must t be permitted rl to put their properties 9 in Roo J condition and an get t if It th they are arc areto upon upon their feet t to meet fully tun the tho truffle requirements wh when n gt general business c s Improves 8 Thc They I Continued on p pape e 8 S. GENERAL Gon Continued from rom page 1 cannot do o this I it g general nemt reductions ons In rates tC's are mado at gt t. t this this' h 5 time Hm WOULD WOULD BE SWAMPED JU If the railroads by st granting nUng I absorbed the l loss In n profits proff s that I urlo s Interests today the c carriers would be bf overwhelmed Tho railroads mu must t first t cure cure ure th their lr own weakened condition nand and establish themselves them them- selves fi before b tore they can extend help to thone Industries that arc aro suffer sutter- ing They cannot jeopardize th the cou country's coun country's coun- coun 1 try's transportation n system In In order to meet me t. t a n. temporary business emer emer- gency M U At t t Ui besl of federal con control In 1918 tr fre freight slightly Jess lee than In 1900 Increases In freight rat rates A were grunted were granted In hi June Jun 1918 1913 and n again ln the latter r part of ot August AUgURt 1920 I the two raises 8 Increasing freight rates ratE'S only 59 69 per cent above those In n 1900 I Jn Yin the meantime me wr ps a had been advanced nd- nd d to a lei level lc el of of p per per r. r cent e above th those BC of ot 1900 The result was RR that I when he tho ho 1920 I crea oln e h freight rates was cal a. granted d. d t the further fn Increased reu ed ex ex- the tho results of at disorganization under Bunder federal control and the th general worldwide slump p In business more more t than nr wiped out tho he of of that ln In A crease t. t s f WAGE INCREASES I From Om 1916 to 1920 the tho railroad wage wage bill was Increased per pers cent ent that thatIs Is s from Cram to to although tho Increase as In hi hours of r ser erIco er- er vice Ico received was only 8 per cent cent- The railroads railroads' total operating expenses Increased In In- creased p per r cent during the pe- pe while their their- earnings were were yere Increased In Increased In- In creased crea Q not quite 72 per cent The result was wan lR that tho the n net t operating In In como come pt ot he to In Interest interest In- In terest or any other corporate purpose In 1920 was 94 4 per cent less Jess than In 1916 The recent c f 12 percent er e cut In wages wages' ordered b by the United States rail rail- 1 road labor board cannot be held to Justify a a reduction In freight rates rotes The wage cut ut is s less than one half of ot tho the last wage advance effective May 1 I 1920 It Is only 18 per cent of tho the Increase c In wages made mado dur during ng the fail w y r WOULD NOT HELP A UA general reduction on In rates at nt this time would boo bo destructive to the tho railroads upon upon which the tho business of t the country countr depends ls It would help business little if 1St any Ocean freight rates are now at nt almost the lowest point In n their hl history toi yet ct such o orates low I rates have not stimulated mulat d business nor traffic All uAIl records for tor carlot Interstate te shipments of fruits and vegetables from te territory west cst of or Salt Sait Lake Lako anil E El JI Paso and south of ot Ashland Ore were broken last month then l H carloads were shipped In this c company's com m- m pany's cars as compared with In June 1920 For tho first six months of 1921 tho the shipments from this ter l were as ns compared with for tor the first half halt of ot 1 20 One phase of or the rate situation ri usually overlooked Is the war tax on I I freight and passenger traffic On Ont the t e eI tads basis of at 1920 traffic it is estimated I I that shat the r railroads will remit to the federal t deral government go an nn annual tax of or orI I This Is not a part par of at the th I rates and the railroads merely collect collect collect col col- I lect It for tor the government TAXES TAXES' iMPORT IMPORTANT NT I The state taxes tales paid by the railroads rail raU railroads 11 roads liro are aro worth considering In this 1 connection Tho The Southern Pacific I company would 1 pay a to the st state to I I II I pf of California this year car under the tho old rate or of 5 per pcr cent centon I II I on gross receipts but It Is 18 s now tiow now called Upon to pay under the I new hew rate provided In tho King tax bill Tho The railroads do not cont contend nd that ho no reductions In freight rates should be bo made Many discriminations and and Inequalities have resulted front from the II horizontal nu 1 increases l H made mado in n r recent cent 1 Years Q The Thc railroads ad are seeking to eliminate these thc e. e and already have havo wiped out thousands I In addition the transcontinental i freight bureau at nt Chicago re recently re reported ro- ro ported that up to June 9 9 tho the latest 10 1 date upon which figures I 1272 1212 reductions had hod been mado In n eastbound eastbound east- east I bound rates and reductions InI in westbound rates Since June 1920 the I Western trunk line committed has I considered 1200 subjects over oyer 90 per percent percent percent cent of or which were r reductions and nearly all affected rates increased last year I 1 feel that la is rather an Impressive Impress impress- ive lye showing of ot what tho the railroads are I trying to to- do 4 |