Railroad Freight Rates

Report Outline
Regional Demands for Adjustment of Rate
Complexities of Railroad Rate Structure
Justice Department Vs. Commerce Commission
Unification of Transportation Rates

Regional Demands for Adjustment of Rate

Complaints of Discrimination in West and South

Political battle cries that rang- through the upper Mississippi Valley 70 years ago—“Down with Railroad Monopoly,” “Down with Discriminatory Freight Rates”—-have been revived this year in the Far West and the Deep South. Public regulation of railroad rates, first by the states and later by the national government, was a direct result of the Granger movement of the 1870's. The present movement may have even more far reaching results. The economic map of the United States has already been altered by explosive industrial development in the South and West during the war. Readjustments of freight rates to perpetuate and expand that development would have profound repercussions throughout the economic life of the nation.

The Republican platform was silent upon the subject, but the platform adopted by the Democratic National Convention. July 20, pledged “non-discriminatory transportation charges [and] early correction of inequalities in such charges.” An anti-trust suit filed by the Department of Justice, Aug. 23, alleged collusive practices by 47 western railroads to eliminate competition and to maintain high transportation rates. Since rate-making practices in Eastern and Southern territory are similar to those followed by the western roads, success for the government in the present case would undoubtedly be followed by similar suits against all other railroads of the country.

Politics, the War, and the Rate Structure

Coming shortly before a presidential election, the antitrust suit has been characterized by railroad men as a political gesture to placate southern insurgents and to win votes for the administration in the doubtful West. The agreement of the western railroads upon which the suit is based was more than 10 years old when it came under scrutiny by the Anti-Trust Division; more than a year of investigation followed before legal proceedings were instituted. Railroad executives refer to the case as “a pre-election action” and Charles E. Johnston, chairman of the Western Association of Railway Executives, asserted, Aug. 23, that “charges of regional discrimination in freight rates are political buncombe, pure and simple.”