Railroads -- United States; Railroads -- United States -- Finance
Warfare between railroads became intensified by the competition between
the cities which the railroads served, and by 1876 the question of
relative rates to New York, Philadelphia, and Baltimore had grown to be
of primary importance.[12] By an agreement in 1869 Baltimore had been
given a differential on east-bound freight of 10 cents per 100 pounds,
which had been reduced to 5 cents on grain in 1870. On west-bound
freight Baltimore had enjoyed a differential in 1875 which had ranged
from 10 cents on first class to 5 cents on special class freight, and
Philadelphia one which had been 2 cents less except on first class,
where the Philadelphia differential had been 3 cents less than that to
Baltimore. A temporary agreement of March, 1876, had replaced these
allowances by differentials of 13 per cent in favor of Baltimore and 10
per cent in favor of Philadelphia as against New York. This relation
was fought over in the rate war of 1876. In December of that year
another agreement was reached on the basis of equal rates from Western
points to Europe on export traffic via all four competing seaboard
cities, and reduced percentage differentials on local traffic to those
cities; but this proved temporary, the subsequent advances in rates
were not general, and final agreement was not secured until April,
1877. The contract then executed was in the nature of a compromise.
The differential to Baltimore was reduced from 13 per cent to 3 cents,
and from Philadelphia from 10 per cent to 2 cents, to apply equally
to local and to export traffic. Rates to Boston were at no time to be
less than those to New York. Differentials on west-bound traffic were
to be the same as those on east-bound on third class, fourth class, and
special freight, and on first and second classes to be 8 cents less per
hundred from Baltimore and 6 cents less from Philadelphia than from New
York.[13]
The years following the agreement of 1877 were marked by low and
fluctuating rates, extensive cutting under the published schedules,
and frequent attempts at pooling and at apportionment of traffic. At a
meeting at Chicago on December 19, 1878, tariff rates were agreed upon
by all lines, but the existence of time contracts depressed receipts
for months thereafter. Another meeting on May 8 was followed by sharp
competition. In June an agreement to raise rates was made, but proved
unsatisfactory owing to long time contracts. “During the period between
December 18, 1878, and July 5, 1879,” said Mr. King in a letter to the
Trunk-Line Arbitrators on July 17, 1879, “the Baltimore & Ohio Company
has practically been out of the market, on account of the low rates by
the Northern lines. It has not secured enough east-bound freight to
give return loads for the small west-bound traffic sent over its lines
to that city, and has repeatedly moved its cars empty from Chicago to
other points on its lines east of that city.”[14]
Public-domain text, read in full here on John Shaqi.
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