Railroads: Rates and RegulationsRipley, William Zebina
History
Railroads: Rates and Regulations
Ripley, William Zebina
Railroads -- Freight -- Rates -- United States; Railroads and state -- United States
Thus it appears that the height of the extreme upper level in our
diagrammatic series of rates is fixed by the highest charge which that
particular traffic will bear.[71] Beyond a certain point, no matter
how great the distance, the rate cannot be increased above this level.
This maximum varies, of course, with each commodity. On cotton it may
be fifty-five cents per one hundred pounds; on grain or coal it will
be much lower, and on sand or cement lower still. The problem of the
traffic manager is to attain this highest rate as speedily as possible
with increasing distance, and to grade his rates with distance up
to this level as quickly as possible, consistent, of course, with
maintenance of a full volume of business. But not only may the final
limit of what the traffic will bear be different for each commodity;
the steps or stages by which the rate progresses up to this maximum,
are quite independently determined. The actual tariffs of local class
rates in general are much simpler than the commercial conditions of
rate making often warrant. Probably the major portion of tonnage on
American railways moves under special or commodity rates. Even in
Prussia over three-fifths of the traffic is of this exceptional sort.
These special rates are made with a view to particular circumstances
prevalent at the time. Bids from a quarryman in Vermont on stone for
a public building in Chicago, may be dependent upon the grant of a
low rate on his marble in competition with a quarry in North Carolina,
also able to supply the particular stone required. The various
ascending series of rates are thus rendered bewilderingly complex.
This is also shown by the foregoing diagram of rates between St. Paul
and Chicago.[72] The rate on a cheap, heavy commodity like coal,
probably rises rapidly at first, and soon attains a maximum beyond
which it can never go. On this diagram, for instance, the freight rate
on soft coal for points up to 180 miles out is lower than that on
flour. Beyond that point the coal rate in turn exceeds that on flour.
Cement is higher than lumber for the first 150 miles; but after that
point the relatively greater value of lumber holds it steadily above
cement. On heavy cheap commodities the relatively high cost of cartage
in competition enables the railway to reap the full measure of its
advantage and to charge well up to the maximum of what the traffic
will bear, within a comfortably short distance. Furthermore, variable
costs for terminal charges have to be considered. Wherever they are
high the rate must rise at once sufficiently to cover these, no matter
how short the distance; but thereafter the rate may not need to be
increased greatly for some time. On light higher-grade goods the wagon
is an effective competitor for longer distances.[73] Moreover, the
competitive points at which rates rise from stage to stage are seldom
the same for all classes of goods. A river crossing brings competition
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