The Nonpartisan Leader Newspaper, March 24, 1919, Page 5

. Big Changes in N. D. Railroad Rates Legislative Session Just Closed Ends Much Gross Discrimination—New Laws Will Give State Industries Fair Chance in Competition BY E. B. FUSSELL ;]WO years ago, if Non- partisan league leg- islators had succeeded in forcing through : their bill for a terminal elevator and flour mill system, and that bill alone, these state industries probably would have been fail- ures. They would have been failures because, under condi- tions that existed two years ago, state-owned industries in North Dakota could not have competed, on even terms, with trust-owned industries in Min- nesota. . For one thing, the state in- dustries would have been left at the mercy of a combination of financiers, who at a critical moment might have shut off funds to the state and brought the industries to ruin. The creation of the Bank of North Dakota by the 1919 legislature ends that difficulty. But a certain handicap, that might prove even more serious than the shutting off of funds, was the condition of freight rates. Under ex- isting freig‘n rates it has been actually cheap- er to ship wheat from points in'North Dakota to the Twin Cities than to ship the same wheat . to natura]l terminal points in North Dakota. ' And it has been actually cheaper_to ship flour- from mills in the Twin Cities to points in North™ Dakota than to ship the same amount of flour, to the same point, from such North Dakota . cities as Fargo, Grand Forks and Fairmount. A few examples of some of these gross injustices may be cited. . To ship a 60,000-pound car of wheat from Minot, N. D., to Grand Forks, N. D., 206 miles, costs $91.80. Po ship the same gafload of wheat, 251 miles, from Moorhead, Minn., to Minneapolis costs only $61.80. The cost, in the case.of the North Dakota haul, is approximately 50 per cent more than the cost of the Minnesota haul, though the North Dakota distance is less by 45 miles than the Minnesota distance. : From Fargo, N. D., to St. Paul, 250 miles, the cost of shipping a carload of wheat is $66. From Fargo to Duluth, Minn., 260 miles, the cost is the same, $66. But from Fargo, to Blaisdell, N. D., only 247 miles, the cost is $99. MILLING TRUST) s FAVORED BY ROADS Minnesota got its’ lower railroad rates, within the state, as the result of legislative enactment, ‘following a fight of years led by the late George Loftus. The railroads, on their own volition, have made rates from North Dakota into Minnesota much lower than the rates for the same distance of haul within North Dakota, thus giving the flour trust of the Twin Cities an incalculable advantage . over any state industry that the farmers of North As a part of its effort to bring about better conditions for the people, the, farmer-controlled North Dakota legis- lature has made important changes in the railroad laws. The higher- rates within than without the state, and other discriminatigns in favor of such centers as the Twin Cities, have been eliminated. A special rate on lignite coal has also been provided to develop and protect that industry. These rate changes will have a most important. - effect on North Dakota cities and on the new state industries to be established. ' L. L. Stair, speaker of the North Da- kota legislature,- which has just put through important rail- ‘road legislation. < . abuses that hdve been ‘kota freight rates, on a .and elevators of Min- ~enough, ‘according to ¢ . Dakota might start within their own state, North Dakota will get lower ‘railroad rates, the same as Minnesota’s, by legislative en- actment, following a fight of years, started by George Lof- tus and carried through to a successful - termination by a farmers’ administration head- ed -by Governor Lynn-J. Fra- zier. Fo complete the parallel, former Congressman James Manahan, who was George Loftus’ attorney during - his fight in Minnesota, was called to North Dakota by the farmer legislators to help prepare the bill that should put North Da- kota farmers on an equality with Minnesota trusts. been upheld by the supreme court of the United States and there is no reason to believe that the North Dakota bill will not get similar approval. How much will the North Dakota rate bill save to the people of the state? According to . Attorney James Manahan, an ex- pert in rate matters, the bill will save $8,000,000 a year on the basis of the:amount of business ' done in North Dakota at present. But it is cer- tain that with favorable rates, business is go- ing to increase in North Dakota. By permit- ting a greater jobbing business and operation of private North Dakota industries, Mr. Mana- han “believes that the actual saving will be nearer $12,000,000 a year, or an even $1,000,- 000 a month, for the citizens of the state. But that is a small matter as compared with “the prosperity that will be possible. North Dakota cities have systematically been held back by rail- road rates, so that in the past several years they have made scarcely any-growth at all. Commercial clubs and business men throughout the state have protested at the unfair- ness of allowing the railroads to build up St. Paul“and Minneapolis business men at the ex- pense of the business men of Fargo and Bis- marck. Because busi- ness could not be built in North Dakota to compete with the busi- ness of the Twin Cities, North Dakota’ citizens, in both the country and cities, have paid higher prices for everything they have bought, and merchants have been robbed of legitimate profits. But with all this protest from North Dakota business men it remained with a farmer legislature to correct existing: for years. The new North Da- par with those of Min- nesota for -the same distance, will do more than reduce prices, free North Dakota business, . and allow the state to operate terminal eleva- tors -and flour mills on even terms with the trust-owned flour mills nesota. - — In western North Da- kota are 700,000,000,000 tons of ' lignite coal, the railroads. the farmer’s market. The Minnesota rate bill has: N 'the state fuel administrator, to serve the entire' . This coal has never ° United States for 100 years. been developed to any considerable extent, largely - because freight rates made it impossible. Millions of tons of Pennsylvania coal have been shipped into North Dakota while the coal fields of North Dakota lay idle: It was immensely to the advantage of the railroads to encourage the opening of the Penn- sylvania coal mines, so that this coal could be shipped to the West as long as it lasted. When the Pennsylvania coal mines were exhausted, as the railroads saw it, it would be time enough to de- ‘velop the coal fields of North Dakota and allow that coal to be shipped back to Pennsylvania, the - railroads collecting freight rates both ways. RATE TO AID LIGNITE DEVELOPMENT The new rate law of North Dakota is intend- ed to end this’situation. It provides a prefer- ential rate for lignite coal that will allow the development of the mines of the state, so that they can furnish cheap fuel, not only to citi- zens of North Dakota, but to citizens of other \ nearby states, without the collection of exorbi- tant freight charges. The North Dakota rate bill is not the only act of the legislature to protect its citizens from railroad domination. The legislature has also passed a public utilities law, which extends the power of the present railroad commission to other public utilities. There is a new feature in this law that is found in the law of no other state. In practically all states railroad commissions are authorized to determine the physical valuations of the railroads and other public utilities, and then to fix rates that will enable the utilities to earn fair returns on the value of their property—and no more. But the spirit and intention of these laws have been largely wiped out by the fact that in fixing the physical value railroad commissions have been allowed to include, not merely the gost of the land and the building of the railroad or other utility, but an added cost due to rising prices and in- cregsed land values. In other words, a railroad is valued in other states not on the basis of what it cost, but on the basis of what it would cost AFTER (Continued on page 14) \ SHORTHORN STEER , A three-year-old shorthorn steer from tick-free area in Missouri at East St. Louis stockyards. This steer was one of a lot of 37 which averaged 1,272 pounds each. Cattle and other farm produce must reach the market through Consequently those who control the railroads have a hold on North Dakota has long suffered from railroad dis- crimination, and as the story on this page shows, the farmers’ : legislature there has just taken important steps to end EoNEA this unfair railroad domination. “