Railroads: Rates and RegulationsRipley, William Zebina
History
Railroads: Rates and Regulations
Ripley, William Zebina
Railroads -- Freight -- Rates -- United States; Railroads and state -- United States
And what becomes of the argument that charging rates according to
what the traffic will bear, is an ample safeguard against extortion?
Many of these small changes in price are diffused in the friction of
retail trade;[146] some of them are unfortunately magnified to the
consumer, especially under conditions of monopoly. When freight rates
on beef go up ten cents per hundredweight, the consumers' price is more
likely than not to rise by ten times that amount. But even assuming
the final cost to follow the range of transportation charges closely,
is it not evident that, so small relatively are many freight charges
by comparison with other costs of production, that consumption is
not proportionately affected by their movement one way or the other?
And yet the entire argument that the value of service principle is a
self-governing engine against unreasonable rates, is based upon this
assumption. Surely the increased income to the carriers when rates are
raised must come from someone. Because it is not felt, is no reason for
denying its existence as a tax. But the very fact that it is not felt,
undermines the argument that a safeguard against extortion obtains. The
theorem that value of service in itself affords a reliable basis for
rate making, pre-supposes that freight rates and prices move in unison;
a supposition which a moment's consideration shows to be untenable
in fact.[147] Such cases must be finally settled by some reference,
indefinite though it be, to the cost of conducting that particular
service; or rather, as Lorenz puts it, to the extra cost incident to
that service. This extra cost may oftentimes be segregated, where the
total cost could not be ascertained.[148]
That the problem is, however, a most difficult one is evidenced by the
periodic controversies over railway mail pay.[149]
Public-domain text, read in full here on John Shaqi.
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