Californi,a Aspects

Efrective July first, there becom.es efrective throughout the United States a so-called l0/o rcduetion in general freight rates.

'We say "so-called." because there are so many ramifications to the proposition that it is NOT a reduetion frofr, present existing freight rates as a whole, as we shall explain tersely: '

When the Governuent took over the railroad.s. it boostetl freight mtes 25/o.

'When the owners took the railroads back, they were grarited a general increase efrective Aogu*t 26th, 1920, ranging from 25/o to 40/o.

On May 76t}., 1922, the Interstate Commerce Commission ordered a l0/o reduction in freight rates, 'WfTII TIIE EXCEPTION OF SUCH R,ATES AS HA\TE BEEN REDUCED SINCE TEE AUGUST'26Ih, 1920, R,ATES WENT INTO EFX'ECT.

At'd. since almost nunberless reduetions in forest product rates,from the high tide rates created on August 26th, 1920, have been granted, the new order creates somdthing of a chaotic thing to get hokl of. There have been many l0/o reductions. There have been reductions amounting to more than 10/o in some districts.

'Where there have been NO red.uctions, the straight 10lo will be taken ofr by the new tarifrs. 'Where there have been red.uctions less than L0/o, they will be reduced enough to make the total l0/o. 'What will be done. where the reductions are more than I0/s abeady, no one has said. It is safe to say they will remain stationary, since there is little chance of this order bringing about any INCREASES.

This red.uction will epply to INTRASTATE as well as INTERSTATE business. The carriers in California have already met with the California Railroad Commission and agreed to make the same red.uctions inside the state as are made interstate. This procedure wili be followecl in all producing states, unquestionably. Some of them may growl, but they will have to follow suit. Precedent and the United States Supreme Court have already passed. on that phase of the situation.

A table produced herewith, gives the rates fron the Northwest to California points before and after the reduction. Please note particularly the rates from Portland to Los Angeles territory. The carriers reduced the shingle rate fron the Northwest to Southern California in May, the ney rates beginning just south of Bakerqffeld, making the shingle rate the same as the lumber rati:. The previous shingle rate was ?9 from Seattle arLd, 72 from Portland. From the middle of May until the last tlay of June the shingle rate has been 7212 from Seattle, anct 65|f fron Portland, to Southern California, the same as the lumber rate between the sane points. These ratee wbre put in voluntarily by the earriers

The 10/o red.uction 4akee the'frimber iate from Seattle to Southern California 65, and from Portlancl 59. But the shingle rate has already been red.uced almost LI/o, and,under the ruling of the I. C. C. the shingle rate will be reduced only LD/o from its previous level, which would make the shingle rate after July ffrst as follows: Portland to I-ros Angeles, former rate72, new rate 65; Seattle to Iros Angelee, former rate 79, new rate 71. The clifrerential between the shingle rate and the lumber rate between these points would therefore be almost wholly restored. 'Whether the carriers will see fit to again reduce the shingle rate to the lumber rate level remains to be seen.

(It is worthy of note that the I. C. C. recently heltl in a case brought by the shingle manufacturers of the Northwest that the shingle rate should be normally higher than the lumber rate between the sam,e points, uphokling a long stand.ing difierential of 10 cents into middle 'Western and Southern territory.)

Henry Ricldiford, the eminent lreg Angeles lumber gtatistician, furnishes us the following statement eonceming rate red.uction d.evelopments that are of interest:

"Special Supplements issued by the Southern Picifle, Union Pacific and Pacific Flreight Tarifi Bureau., efiectivp July 1, covering reductions in freight rates equivalent to 70/o as ord.ered by the Interstate and other Railroad Commissions are at hand.

"Owing to the large number of exceptions tarifie will require careful checking. Possibly d.ue to the short time allowed. for preparing the supplements some inconsistencieg are noted which will probably be ironed out at an early date.

"In a general way from the standpoint of the 116g Angeles wholesaler the result should be satisfaetory. The reduction applies to all contiguous territory served. and. some competitive adjustments have been made of benefit to this mar(&nttnued on page 741