Railroads: Rates and RegulationsRipley, William Zebina
History
Railroads: Rates and Regulations
Ripley, William Zebina
Railroads -- Freight -- Rates -- United States; Railroads and state -- United States
The foregoing consideration suggests still another argument in favor
of stability of freight rates, even at the expense of a certain amount
of flexibility. Special rates which create new business should be
carefully distinguished from special rates which merely wrest business
from other carriers or markets. Any expedient which will make two
blades of grass grow where one grew before; which puts American wheat
into Liverpool in competition with India and Argentina; which cheapens
California fruit on the eastern markets; which offers a wider choice
of building stone for Chicago; which will establish new industries
for the utilization of local raw materials, deserves the greatest
encouragement. Our country has been unprecedentedly developed in
consequence of the energy and progressiveness of its railway managers.
But thousands of other special rates have no such justification, even
where they are public and open to all shippers alike. These are the
expression of railway ambition to build up trade by invading territory
naturally tributary to other railways or traders. A significant feature
of commercial competition is the utilization of distant markets
as available "dumping grounds" for the surplus products left over
from the local or natural market. In the St. Louis Business Men's
League case[133] the Pacific coast jobbers complained that the large
distributing houses in the Middle West thus invaded their territory.
Having met their fixed charges from their own natural territory, they
invaded the remotest districts by cutting prices to the level of actual
production cost per unit of new business. The Florida orange growers
protest against the relatively lower rate on California fruit, which
is carried twice the distance for less money per box. This, it is
urged, enables the western grower, having glutted his natural market
in the Middle West, to "dump" his surplus into the eastern field, to
which alone the Florida orange is restricted. This line of argument
is the same as that which upholds the systems under which lower rates
are given for exported or imported commodities than those on goods for
domestic consumption. It is always alleged that such sales at long
reach actually benefit the consumer or producer near at hand, inasmuch
as they contribute something toward the fixed expenses of the business,
which must be borne in any event. This raises at once the much broader
question as to what constitutes a "natural market" or the "natural
territory" which rightfully belongs to any given economic agent. It
is, however, too extended an issue to be discussed at this time.[134]
Public-domain text, read in full here on John Shaqi.
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