Cyclopedia of Commerce, Accountancy, Business Administration, v. 01 (of 10)American School of Correspondence
General
Cyclopedia of Commerce, Accountancy, Business Administration, v. 01 (of 10)
American School of Correspondence
Accounting; Business; Commerce
The volume of traffic is the chief factor in establishing rates,
either regular or special. It is an especially important factor in
establishing a commodity rate. In a given community, some one commodity
may be produced in large quantities. Perhaps it is a raw material which
must be transported to certain manufacturing centers. To encourage
the development of the industry, thereby creating a large volume
of traffic, the railroads leading from the point where the traffic
originates establish a commodity rate to other points, where the raw
material can be used to advantage by the manufacturer. Or, perhaps,
important manufacturers are located on other roads, in which case
connecting lines join with the originating road and issue what is
known as a _joint tariff_. This enables the producer to deliver his
raw material to the manufacturer on favorable terms, when to pay class
rates might compel him to abandon the enterprise, with a consequent
loss of traffic to the railroads. This discriminates against no one,
since every shipper of the particular commodity between the points
named is entitled to the special commodity rate.
Frequently, however, a commodity rate exists between certain points
which might, under certain conditions, be taken advantage of by a
shipper located at a point outside of those named in the commodity
tariff. For illustration, a manufacturer in Peoria, Illinois, is
shipping a commodity on which a special rate is granted between Chicago
and Milwaukee, but takes a class rate from the point of shipment. He
makes a shipment to Milwaukee and pays the through class rate provided
from the point of shipment, when by proper billing he would have paid
the class rate to Chicago, and secured the benefit of the commodity
rate from that point to Milwaukee. A lack of knowledge of commodity
rates in effect in the manufacturer's territory has resulted in an
unnecessary expense--a loss of money.
The claim might be made that the billing clerk at the local freight
office should have given the shipper the benefit of the lowest rate.
But he will fall back on the classification and be prepared to show
that he has given the only rate quoted on shipments from Peoria to
Milwaukee, which is the class rate. It is no part of his duties to
keep posted on commodity rates granted by another road, while it is
distinctly to the interest of the manufacturer to know of the existence
of all such rates applying to his product.
=Freight Tariffs.= The Interstate Commerce Act provides that two copies
of every freight tariff issued by the railroads shall be placed on file
at each freight office, for the inspection of the public. Since the
rates must be made public, the railroads do not object to supplying
shippers with copies of the tariffs applying to their product. Through
the local freight agent, copies of all tariffs applying from the point
of shipment can be obtained.
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