Lumber Protests Increased Railway Rates

Washington, Sept. 8.-The National Lumber Manufacturers Association, it rvas stated today, is moving energetically to combat the effort of the railroads to have the Interstate Commerce Commission authorize a general increase of 10 per ,cent in freight rates. It was said at the offices of the Association that it had consistently favored reduction of freight rates on all commodities, rather than an increase, as a step toward the recovery of prosperity. In fact the Association in the fall of 1932, jointly with the farm organizations and others took the initiative in seeking lowered transportation costs in basic commodities. A rneeting of legal ,counsel and traffic experts of the regional lumber manufacturing associations of the country will be held in Washington, September 17, to decide on the precise position of the industry and the method of opposition to increased rates.

fn answer to the position of the railroads that an increase of 10 per cent in railway freight rates would be in line with the economic policy of the National Administration in aiming at a restoration of the general price level of 1926, the Association takes the position that lumber tariffs have not been reduced. While, it was stated, it is true that on the basis of total ton-mile revenues effective railway tariffs are 9.6 per cent less than they were in 1926, the redu,ction is due almost entirely to changes in tariffs which have been made from time to time to meet motor truck or local water competition. But as the average lumber haul is about 800 miles, these short-haul reductions have had little or no effect on lumber.

On the other hand, the lumbermen feel that an increase in lumber freight rates at this time would be counter to governmental policy as set out in Section 511 of the Housing act, which specifically amended the Interstate Com- mer'ce act to give the I. C. C. authority to reduce freight rates on building materials "with or without a hearing."

Higher Freight Rates Vs. Reduced Lumber Prices

The petition of the railways is for a general increase.of 10. per cent in freight rates, but limited to 3 cents per 1@ pounds for lumber. Such an increase means the addition of about $1 a thousand feet to the cost of lumber to retail yards, rvhich would be equivalent, under the rules of the retailers'code, to an increase in the retail price of $1.31 to $1.41, varying with localities.

The minimum mill prices of lumber used in building operations were reduced by the Lumber Code Authority api proximately 10 per cent in the latter part of June. This was done in response to representations of the Federal Housing Administration and NRA that such reductions would stimulate housing and tend to increase the volume of lumber consumption. Lumber manufacturers hoped that such r,vould be the case, as adequate volume of lumber production has long been lacking. If now, it is explained, lumber freight rates are in'creased 10 per cent, there is no promise of benefit to the public, to the housing campaign, or to the lumber industry from its voluntary reduction of prices of its product.

Wilson Compton, general manager of the National Lumber Manufacturers Association, says that his industry is in sympathy with the plight of the railroads, but that it is not confined to them, that it does not warrant encroachment upon other industries themselves also operating at a loss, and that it is due to burdens placed upon the carriers by public policies and economic developments. These have increased their operating costs out of proportion to the revenues it is possible to collect in present industrial conditions, commodity prices being still about 25 per cent lower than in 1926.