Railroads: Rates and RegulationsRipley, William Zebina
History
Railroads: Rates and Regulations
Ripley, William Zebina
Railroads -- Freight -- Rates -- United States; Railroads and state -- United States
Finally, an abnormal disregard of distance, which is always possible
in the making of special rates to meet particular cases, may bring
about a certain inelasticity of industrial conditions. This may occur
in either one of two ways. The rise of new industries may be hindered;
or the well-merited relative decline of old ones under a process of
natural selection may be postponed or averted. The difficult problem
of fairly adjusting rates on raw materials to finished products in
order that the growth of new industries may take place, while at the
same time the old established ones shall not be cramped or restricted,
has already been discussed. It is equally plain that at times there
may be danger of perpetuating an industry in a district, regardless of
the physical disabilities under which it is conducted. One cannot for
a moment doubt the advantages of a protective policy on the part of
railways; safe-guarding industry against violent dislocating shocks.
An inevitable transition to new and perhaps better conditions may
perhaps be rendered easier to bear. To New England, constantly exposed
to the competition of new industries rising in the West, this policy
has been of inestimable value. On the other hand, it is incontestable
that in the long run the whole country will fare best when each
industry is prosecuted in the most favored location, conditions of
marketing as well as of mere production being always considered. If
Pittsburg is the natural centre for iron and steel production, it may
not be an unmixed advantage to the country at large, however great its
value to New England, to have the carriers perpetuate the barbed wire
manufacturers at Worcester. If California can raise a finer or more
marketable variety of orange, and at a lower cost, than Florida, it
would be a backward step to counteract the natural advantage of the
western field by compelling the southern railways to reduce their rates
to an amount equal to the disability under which the Florida grower
works. The principle laid down by the so-called "Bogue differentials"
in the lumber trade[136] bears upon this point. In order to equalize
conditions between a large number of lumbering centres sending their
products to a common market, certain differentials between them
were allowed under arbitration, "to enable each line to place its
fair proportion of lumber in the territory." Did this mean that the
disability of any place in manufacturing cost, should be compensated by
a corresponding reduction in the ensuing transportation cost? This was
the view of some of the carriers who were zealous to keep the market
open to all on equal terms. Yet it is evident that, carried beyond a
certain point, such a policy would not only nullify all advantages of
geographical location, but it would also reverse the process of natural
selection and of survival of the fittest, upon which all industrial
progress must ultimately depend. Each particular case, however, must be
decided on its merits.
Public-domain text, read in full here on John Shaqi.
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