Railroads: Rates and RegulationsRipley, William Zebina
History
Railroads: Rates and Regulations
Ripley, William Zebina
Railroads -- Freight -- Rates -- United States; Railroads and state -- United States
Unlike the preceding instance, most of the Standard's rebates have
been, in fact if not technically, secret. Perhaps the most flagrant
case occurred in the rates from Whiting to the southeastern states. The
Bureau of Corporations estimated that $70,000 a year was saved by this
device; and all competition from independent sources was eliminated
within that territory. The Illinois Central and Southern roads cross at
an obscure point in Tennessee known as Grand Junction. This was made a
centre of distribution for the entire South.[182] But the rate under
which the oil moved,--and in one given month 169 carloads were thus
carried,--was given on a special tariff, publicly filed at Washington,
to be sure, but prescribing the rate, not from Whiting but from Dalton,
Illinois, to Grand Junction, Tennessee. Dalton was an almost unknown
station, near the refinery. Of course any other shipper who happened to
know of it, and who happened to have oil to ship from Dalton to Grand
Junction, could have had the same rate of thirteen cents a hundred
pounds. But he would find it moved over a roundabout route, over four
different connecting lines, instead of over the rails of a single
company. As against this rate of thirteen cents, the only routes known
to the Ohio independent producers charged from nineteen to twenty-nine
and one-half cents per hundred pounds. Meantime the Standard's oil was
by this devious means reaching every point in the South at prices which
no competitor could hope to meet. In one case, the oil going by way of
Grand Junction, travelled over one thousand miles when the direct route
from Chicago was only a little over five hundred miles. The adjustment
was everywhere such that, even on the commonly known tariffs, Whiting
enjoyed a special advantage over the sources of independent oil.
Atlanta, Georgia, is only 733 miles by short line and 1003 miles by
way of Grand Junction from Whiting. Toledo, with its independent
refineries, is distant only 687 miles. Yet despite this fact, the
commonly known rates were shown to be, from Whiting, 33.2 cents as
against 47.5 cents from Toledo. So, even without the Grand Junction
contrivance, the Standard was seemingly favored more than enough. It
should be added, in conclusion, that while the Grand Junction rate was
publicly filed, its discriminatory character stands proven by the fact
that all the actual shipments were "blind billed;" that is to say, no
local agent knew what was the rate actually paid. Such blind bills
of lading are photographically reproduced in the report above named.
Moreover the ill repute of the transaction was indicated by the prompt
cancellation of the rate when discovered in 1905. But in the meantime
it had done its work, and fixed monopoly prices for an indispensable
product over a quarter of the territory of the United States.
Public-domain text, read in full here on John Shaqi.
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