Con It will be noted from the above that the number of sheep and the production of wool have been gradually decreasing during the past 10 years, although, as indicated by the percentages, the decline in the number of sheep and consequently in the wool production has been somewhat more marked in the eastern than in the western territory. stantly increasing inroads have been made upon the available grazing lands through conversion to farming purposes. The consequent reduction in the number of sheep on the ranges, and the resulting dwindling of the wool supply, are urged as reasons for requiring special consideration of the wool rates with a view to stimulating the wool industry. However, it is not clear that reduction in the sheep production in the West is directly attributable to the freight rates on wool. Based on the monthly reports of statistics prepared by the United States Department of Agriculture, the farm prices of wool, in cents per pound, for the past 10 years have been as follows: 1912 1913 1914 1915 1916 1917 1918 1919 1920 1921 1922 Jan. 15. Mar. 15.... Apr. 15. May 15. June 15. July 15. 24.2 | 28.6 Aug. 15. 23.8 29.0 Cents Cents Cents Cents Cents Cents Cents Cents Cents Cents Cents 18.0 19.8 22.3 18.9 25.0 24.8 23.3 28.4 Sept. 15.... 18.7 15.8 18.6 18.5 15.5 18.0 22.7 28.7 55.5 57.7 50.6 27.5 In 1923 there was still further improvement in wool prices, the average of the western wool in that year being about 42 cents per pound. At the time of the hearings some of the finer grades of wool were selling for as high as 54 cents per pound. On brief, it is stated that the price of wool has declined somewhat since the hearings. Beginning in June, 1920, and continuing through 1921 the sheepmen sustained heavy losses through the sudden slump in the price of wool and the decline in the value of sheep. Many of them were required to mortgage not only their lands but most of their sheep, and the record indicates that at the time of the hearings probably 90 per cent of the sheepmen were burdened with these mortgages and heavily indebted to the banks. The sheep raisers urge that the many bank failures in the West, of which 40 occurred in the State of Idaho alone within the past three years, reflect the condition of the wool industry. On the other hand, the record conclusively shows that, except for the financial plight which confronts the woolgrowers as the aftermath of the 1920-21 slump, the sheep industry under the prevailing conditions and prices would be on a sound basis. It was estimated that, due to the burden which was cast upon the industry during this lean period, it would take from three to five years to recoup the losses sustained at that time and to bring about a healthy condition of the industry. The total expenses, including interest on investment, incurred in running sheep per head are stated to have been, for the year 1910, $2.43; for 1918, $7.94; for 1919, $8.54; for 1920, $8.40; for 1922, $6.32; and that the expenses for the year 1923 would probably exceed the 1922 cost. Similar fluctuations are shown in the average value of sheep per head. In 1908 the average value is shown to have been $3.88; in 1918, $11.82; and in 1921, $6.41 per head. These are matters which we may take into consideration, but they are not controlling in the making of reasonable rates. That question must be determined in the light of other considerations. History of Eastbound Rates. The evidence with respect to the eastbound rates is confined very largely to those applicable to Boston. Probably 90 per cent of the wool shipped from this western territory is destined to the territory north of the Potomac and east of the Buffalo-Pittsburgh line, and principally to the Boston market. In the First Wool Investigation, it was recommended that in western territory wool in the grease should be rated fourth class, in carloads, minimum 24,000 pounds for a 36foot car, with higher minima for larger cars. It was also found that the then existing rates on wool in the grease, in carloads, from points in this western territory to eastern markets were unreasonable. No order was entered but the carriers filed schedules in conformity with our recommendations. Certain proportional commodity rates were published from points lying east of what is known as the transcontinental base line, that is, a line drawn along the eastern boundaries of California, Oregon, and Washington, to the Mississippi River and St. Paul or Duluth, Minn., and proportional commodity rates beyond. From points west of this base line most of the carriers published joint rates on the basis of the combinations made on the Pacific coast terminals, a rate of $1 having been authorized in that proceeding under fourth-section relief on wool in the grease, in bales, from all Pacific coast terminals to the Atlantic seaboard and intermediate points. A rate not exceeding that on baled wool by more than 25 cents was authorized on sacked wool. The proportional rates found reasonable for application on both sacked and baled wool from St. Paul and Duluth to the East were 60 cents to Boston and 55 cents to New York, which were lower than the then existing fourth-class rates of 64 and 60 cents, respectively. From St. Louis, Mo., however, proportionals of 52 cents to Boston and 48 cents to New York on sacked wool, and 47 cents to Boston and 43 cents to New York on baled wool, were prescribed. The contemporaneous fourth-class rates were 45 cents to Boston and 41 cents to New York. These proportionals were 55 per cent of the first-class rates, while the fourth-class rates were about 47 per cent of the first class. The following table, compiled from exhibits, shows the rates to Boston on wool in the grease, in sacks, prescribed from the points named as the most easterly points from which wool then moved in any considerable quantities. The present rates are also shown: *Carload minimum 24,000 pounds for 36-foot cars. From points farther west it was found that the rates. should increase by not more than 2 cents for every 25 miles. The proportional commodity rates on sacked wool which applied west of the Mississippi River were slightly lower than the fourth-class rates. Rates 15 per cent lower than the maximum rates found reasonable for sacked wool were prescribed on wool in machine-compressed bales having a density of 19 pounds or more per cubic foot, minimum 32,000 pounds in 36-foot cars. Subsequently the factors east of the Mississippi River were subjected successively to the general 5 per cent and 15 per cent increases authorized prior to Federal control. No change was made in the proportionals of the western lines until June 25, 1918, when they were increased by 25 per cent under General Order No. 28 of the Director General of Railroads. The next change occurred on August 26, 1920, under Ex parte 74, when they were increased 33 per cent, but subsequently reduced 10 per cent under date of January 1, 1922. In addition a voluntary downward revision was made by the north Pacific coast lines on June 6, 1922. The resulting rates continued in effect until the denial of fourthsection relief in the 1922 Applications, decided October 30, 1922, whereupon schedules were filed proposing rates in conformity therewith, which rates are here under suspension. What are Reasonable Rates Eastbound It will thus be seen that the present rates on wool in the grease from this western producing territory to the north Atlantic ports, generally speaking, are on the basis of those established in conformity with our findings in the First Wool Investigation as modified by the subsequent general increases and reductions. The following table is illustrative of the present and suspended rates, carload minima 24,000 pounds for sacked wool and 32,000 pounds for baled wool. |