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 peculiarity of many of these rate adjustments of the Standard Oil
Company of late years was that they were publicly filed; and hence not
open to legal attack. This does not however detract in the least from
their discriminatory character. One example, right here in New England,
now happily corrected, may be cited from the records of the Interstate
Commerce Commission for 1906.[181] The southern half of New England
was mainly supplied with kerosene from the great Standard refinery
at Bayonne, New Jersey. The oil was brought there from the fields by
pipe line; and, being refined, was distributed by tank vessels all
along the coast, with a short rail haul thereafter to inland points.
The total cost to the Standard company was estimated by the Bureau of
Corporations at between fourteen and sixteen cents per hundredweight.
To meet this, the independent western refiners had to ship all the
way by rail. This was more expensive in any event; but for some years
they found their handicap greatly increased by the refusal of the New
Haven road to join in any joint through rate. The western independents,
therefore, had to pay the sum of two local rates, up to and beyond the
Hudson river, thereby bringing their transportation up to approximately
thirty cents per hundred pounds. In other words, their cost of carriage
per gallon was enhanced more than enough to constitute a fair refining
profit in itself. The result was the practical exclusion of competition
from this source. Fortunately, however, after this investigation the
New Haven was ordered to pro-rate with the western roads, thereby
overcoming about half of this disability. This case clearly evinces
the necessity of effective Federal regulation of such matters as joint
rates; and it also shows how possible it may be to so adjust tariffs,
openly and even legally, as to favor one shipper over another.
Public-domain text, read in full here on John Shaqi.
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