Railroads: Rates and RegulationsRipley, William Zebina
History
Railroads: Rates and Regulations
Ripley, William Zebina
Railroads -- Freight -- Rates -- United States; Railroads and state -- United States
Deductions from the full tariff for the use of special equipment owned
by shippers, has been one of the commonest means of building up great
monopolies.[171] The allowances to the Standard Oil Company for the use
of its tank cars, before the construction of pipe lines, and especially
prior to 1888, were a source of great unrest.[172] But the construction
of pipe lines has not lessened their importance. It is on record that
the use of private cars in other lines of business has led to grave
abuses. When stock cars and beef refrigerator cars, owned by private
shippers, first began to be used about 1883-1884, they were much
sought after by the railroads as traffic. They moved regularly, not by
seasons; the volume of business was large and rapidly growing; it was
concentrated at a few large initial points; much of it was high class
and very remunerative. With the enormous extension of refrigeration
to cover the long-distance movement of fruit and vegetables, a still
more powerful encouragement came into play. These latter businesses
were highly seasonal. Few roads could afford to maintain highly
specialized equipment to care for a business of a few weeks length.
But a private company operating all over the country, could utilize
its cars first for early vegetables and fruits from the south, then
from the middle west or the Oregon-Washington region, and finally in
winter for oranges from California or Florida. The number of these cars
rapidly increased until by 1903 there were 130,000 in service,--in fact
about one-eleventh of all the freight cars in the United States were
privately owned. The so-called Armour interests, primarily engaged in
the packing business, were by far the largest single concern.
The system of payment for the use of these cars consisted of an
allowance, based upon the mileage performed. This used to be one cent
per mile, loaded and empty, for refrigerator cars. In 1894 a determined
effort was made by the carriers to reduce this below the point then
reached of three-fourths of a cent per mile. But the extraordinary
concentration both of ownership and traffic, rendered it easy for the
car companies to defeat the proposition. In the meantime the steady
increase in volume of traffic, making whole trainloads possible,
together with the growth of very long distance business, made it
imperative that these trains be operated at high speed with few stops.
This at once enormously enhanced the earning power of each car, as
based upon mileage. The performance was often as high as four times
that of the ordinary freight cars.
Under these new conditions, at the current rate of earnings, a car
would pay for itself in three years, besides paying all expenses of
maintenance. The burden of these allowances became very great. The
situation some years ago is well described by a former member of the
Interstate Commerce Commission, as follows:--
Public-domain text, read in full here on John Shaqi.
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