Railroads: Rates and RegulationsRipley, William Zebina
History
Railroads: Rates and Regulations
Ripley, William Zebina
Railroads -- Freight -- Rates -- United States; Railroads and state -- United States
It is indisputable that the great dynamic force in railway operation
inheres in the value of service idea. The traffic manager who is always
considering how much it will cost to handle business, will seldom
adventure into new territory. The United States, as a rapidly growing
country, is consequently the field in which charging what the traffic
will bear, has been most ardently upheld as the only practicable basis
for rate making. A few detailed illustrations will serve to show
the results of its application in practice. Not infrequently does
it happen that rates are different over the same line for shipments
between two given points in opposite directions. Where this is due
to a preponderance of traffic in one direction, and a consequent
movement of "empties" which invite a back loading at very low rates,
the difference of charges according to direction may actually be due to
differences in the cost of carriage.[153] An empty train, which must
be returned from New York to Chicago for another loading of grain,
or to Georgia or Oregon for shipments of lumber, if loaded with
merchandise, can be moved with no allowance for dead weight of cars
or locomotives; inasmuch as the train must move in any event, whether
loaded or empty. But even where this defence of difference in the cost
of service fails, the practice may be entirely proper from every point
of view. By increasing the total tonnage a special rate may ultimately
contribute to lower charges all along the line. Raisin culture began in
California in 1876. Prior to that time the Spanish product had supplied
the American market. The first thing to do was to find a market for
the California raisins in the East. They would not bear the freight
rate which had previously been charged for Spanish raisins moving over
the transcontinental lines westward. A very low rate was all that the
new traffic would bear. During the year 1876 therefore 70,000 lbs. of
California raisins were carried east at one and three-fourths cents
per 100 lbs., while simultaneously 1,000,000 lbs. of Spanish raisins
were carried west over the same lines at a rate of three cents. No
such difference in the cost of service in opposite directions existed,
although a preponderance of empties moving eastward undoubtedly
cheapened the service from California. The aim of the commodity rate
was to upbuild a new industry. How far this succeeded appears from the
fact that in 1891, no Spanish raisins were carried west at all; while
the eastbound shipments amounted to 37,600,000 lbs.[154] The preceding
illustration leads us then to this further conclusion. The cost of
service principle might most conceivably be applied to a railway in
a purely static state. But, dynamically considered, as involving the
growth and development of business, it fails utterly by itself to meet
the necessities of the case.
Public-domain text, read in full here on John Shaqi.
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