Jannary 25, 1922 



HARDWOOD RECORD 



17 



Southern Hardwood Rates Cut 



Demands of Southern Hardwood Traffic Association Only 

 Partially Met by I. C, C, Decision; Fight Will Be Continued 



Bulletin 



The Interstate Commerce Commission's decision in the Hardwood 

 Case requires reductions from South and Southwest to Northern 

 and Eastern markets ranging from 1 to SV, cents, with a probable 

 average of 3 to 31/2 cents. Rates for similar haiUs between other 

 points are to be revised in harmony with the figiires mentioned. 

 No relief was granted on logs and other rough material. . Shippers 

 feel that buying will undoubtedly be stimulated because of measure 

 of reductions and because the question is now settled for the time 

 being at least. (Signed) J. H. Townshend, 



Secretary-Manager Southern Hardwood Traffic Association. 



A reduction on hardwood lumber rates from Southern States of 

 origin to destinations east of the Mississippi and north of the Ohio 

 and Potomac Rivers, approximating ten per cent, was ordered by 

 the Interstate Commerce Commission on January 20 on the com- 

 plaint of the Southern Hardwood Tratfie Association and individual 

 lumber companies and other associations against the Illinois Cen- 

 tral and other railroads. 



The reductions are to be in cents per 100 pounds, which traffic 

 officials of the railroads estimate will be equivalent to about ten 

 per cent. No estimate as to the loss in revenue to railroads has 

 been made. 



The reductions are to become operative not later than March 16. 

 The tariffs are to be filed not later than March 6 and effective 

 ten days later. 



The commission, in its opinion, stated that the rates assessed 

 for the future will be unreasonable to the extent that they exceed 

 the rates in effect August 25, 1920, before Ex Parte 74 increases, 

 by more than the amounts in cents per 100 pounds from Missouri 

 to Illinois, 6 cents; to C. F. A., 7 cents; and to Trunk Line Territory, 

 New England and Virginia cities, 9 cents; from Texas, 8, 9 and 11 

 cents; from Louisiana, 8, 9 and 11 cents; from Arkansas to the 

 respective territories in the order named, 7, 8 and 10 cents; from 

 Mississippi, 7, 8 and 10 cents; from Alabama, 8, 8 and 10 cents; 

 from Georgia, Florida, South Carolina and North Carolina, 9, 9 and 

 9 cents; from Virginia, 9, 8 and 8 cents; from West Virginia, 9, 7 

 and 8 cents; from Tennessee, 8, 8 and 9 cents; and from Kentucky, 

 7, 7 and 9 cents. 



Six of the eleven commissioners joined in making the report. 

 They admitted that the figures put into the record by the railroads 

 reflected, as they said, "a rather unfavorable financial condition." 

 The fact, however, did not preclude them, as they said, from find- 

 ing particular rates or rates on particular commodities to be unrea- 

 sonable when the testimony was sufficient to justify such a finding. 

 The commission said that the financial condition and business out- 

 look of the southern hardwood industry was far from encouraging. 



The case afforded the cominissioners an opportunity for express- 

 ing varying views, Chairman McCord, in a concurring opinion, de- 

 clared that the conclusions of the majority fell short of substantial 

 justice to the shippers. 



Commissioner Campbell of Washington and Commissioner Potter, 

 formerly president of the Carolina, Clinchfield and Ohio Railroad, 

 also concurred. Commissioner Potter said he agreed with the ma- 

 jority only on the ground that the relationship of rates that existed 

 prior to August 25, 1920, should be restored. 



"This sweeping finding of unreasonableness is not supported in 



the report by any citation of ton-mile earnings," said Commissioner 

 Daniels in the principal dissent. "The finding is particularly 

 unfortunate because it comes at a time when we are conducting 

 a general investigation to determine whether we may lawfully 

 require further rate reductions than those already made, not in- 

 cluding this, and without awaiting the outcome of that inquiry." 



Reduction In Log Rates Will Be Demanded 



The victory won by the Southern Hardwood Traffic Association 

 is considered a notable one, but it falls far short of what was asked 

 for and what it is believed the hardwood shippers, in justice, should 

 have. The order will have the effect of restoring, in a general way, 

 f;he rate relationships in the hardwood rate structure which pre- 

 vailed before the advances under Ex Parte 74 and of eliminating 

 many of the inequalities which have existed since Aug. 26, 1920. 

 But as an instance of the failure of the reductions ordered by the 

 commission to meet the demands of the association, it may be 

 stated that no reduction whatever, is ordered in the case of logs 

 moving to the mills. As a result, J. H. Townshend, secretary- 

 manager, and J. V. Norman, general counsel for the association, ex- 

 pected to arrive in Washington January 24 for the purpose of 

 asking the commission for a substantial reduction in rates on logs 

 and other rough materials moving to milling points and for further 

 reductions in the rates on lumber. They will use the evidence sub- 

 mitted to the commission last September, during hearing of the 

 formal complaint, in their efforts to secure the additional relief 

 sought. 



There is quite general disposition, however, to emphasize the fact 

 that, although the reductions are not as substantial or as com- 

 prehensive as sought by the association, lumber stands as one of 

 the only three commodities on which the commission has removed 

 part of the advances made under Ex Parte 74. 



Shippers Consider Decision as Favorable 



Shippers regard the decision as favorable in two respects. First, 

 as an entering wedge in the direction of lower rates on hardwood 

 lumber and forest products, and. Second, as tending to stimulate 

 demand through removal of expectation of further reductions for 

 the time being. Keen disappointment is expressed over failure to 

 include logs and rough materials. 



"The decision will probably stimulate demand to some extent," 

 said S. M. Nickey, president of the association, "but it does not go 

 far enough with respect to reductions on lumber and forest prod- 

 ucts moving to consuming destinations, and it leaves out logs and 

 rough materials altogether. This latter phase represents the most 

 distinct disappointment in connection with the decision. It is 

 utterly impossible for mills at Memphis and other junction points 

 to operate successfully on the basis of these undisturbed rates on 

 logs and rough materials and you cannot make this too emphatic. 



"Mills at Memphis and other junction points will have to close 

 down and quit business if the Interstate Commerce Commission or 

 the railroads do not furnish relief from present excessive rates on 

 logs and rough materials," declared James E. Stark, three times 

 president of the association. "Roughly, these mills produce about 

 40 per cent of the hardwood lumber made, and if present rates are 

 maintained and these plants have to be closed down there will be 

 an advance in prices, which will restrict consumption of these com- 

 modities. Both the railroads and the industry stand to lose heavily 

 unless rates on logs and rough materials are not substantially 

 lowered." 



