Railroads -- United States; Railroads -- United States -- Finance
Early in 1881 the cutting of rates became sufficiently important to
force official recognition by the chairman of the trunk-line pool.[15]
By June 17 quoted rates on grain were 15 cents per 100 pounds from
Chicago to New York, and a railroad war was in full swing.[16] By
October the grain rate had been reduced from 15 cents to 12½ cents;
by August passenger fares were $7 from New York to Chicago, and $16
from Chicago to New York, and there was quoted besides a $5 Boston to
Chicago rate over the Grand Trunk. The radical nature of these cuts can
be appreciated from Mr. Albert Fink’s testimony before the Hepburn
and Cullom Committees. Fifteen cents, said he in 1879, just covered
the actual cost of hauling the grain;[17] twenty cents, he asserted in
1885, was the bare cost of movement, including the general expenses,
but without any profit to the road.[18] Grain was therefore not
repaying the specific cost of hauling, and passengers were obviously
in similar case. Temporary relief occurred through the large increase
in business which took place at the end of 1881. In October the
Pennsylvania and the Baltimore & Ohio advanced east-bound rates because
of the abundance of traffic offering, and the New York Central, Erie,
and Grand Trunk followed to a less degree. In November further advances
occurred, though west-bound rates remained low; but throughout December
and January rates were low and fluctuating,[19] and negotiations were
carried on for the settlement of the differential question which
underlay the trouble. None of the combatants were open to conviction;
the only outlet was therefore arbitration, and this was reluctantly
resorted to.[20] In January, 1882, the roads divided the through
trunk-line business, agreed to raise rates, and left the subject of
differentials to be investigated by Messrs. Thurman, Washburn, and
Cooley.[21]
This solution settled nothing. During the following three years
constant disputes arose over the proper division of traffic,[22] and
in 1884 the old struggle was resumed with unabated vigor. Rates on
grain to the seaboard fell from 30 cents to 20 cents on March 14 of
that year, and to 15 cents on March 21; remaining low and fluctuating
through the year.[23] Immigrant business from New York to Chicago was
handled by the Pennsylvania at one dollar a head. By February, 1885,
rates for traffic in both directions were completely demoralized.
Nominal east-bound charges on grain were 25 cents, or a 10 cent advance
since the preceding March, but actual rates were as low as 8 and 10
cents. Meanwhile published rates on west-bound freight were a third
less than the standard tariff, and passenger rates in both directions
were, roughly, one-half the regular charges. The following month still
further reductions occurred. The warfare was finally terminated by an
agreement to maintain rates late in 1885,[24] followed by an elaborate
pooling agreement between the competing lines.[25]
Public-domain text, read in full here on John Shaqi.
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