Railroads: Rates and RegulationsRipley, William Zebina
History
Railroads: Rates and Regulations
Ripley, William Zebina
Railroads -- Freight -- Rates -- United States; Railroads and state -- United States
One side of the Savannah Freight Bureau Fertilizer case[208]--namely,
the complaints of local stations on a roundabout road--brings it
within our first category. The roundabout line from Charleston to
Valdosta, shown upon the map at p. 648, was 413 miles long as against
a direct route of only 273 miles. Kathleen, Georgia, is only 288
miles out from Charleston on this indirect line,--approximately the
same distance as Valdosta, which thus corresponds to Y in the oyster
case. Yet Kathleen paid a rate of $3.32 per ton on fertilizer from
Charleston as against $2.48 charged to Valdosta, 125 miles beyond.
But this excess distance is by an indirect route. Most of the notable
English cases concerning local discrimination appear to be of the same
stamp.[209] The complaints of a number of smaller places in the St.
Paul-Milwaukee territory, like Cannon Falls, Lacrosse, and Northfield
some years ago, reduce in part to the same thing.[210] Whether the
Troy, Alabama, and Wichita, Kansas, cases belong here or in the next
group is indeterminate, owing to the difficulty of comparing conditions
of carriage by rail and by water, respectively.
On the other hand, the set of circumstances shown in diagram B (page
219, _supra_) is of quite a different sort. The justification for
the local discrimination is much less clear. Here, as before, the
distant point Y enjoys a lower rate than X because of the presence of
competition; but it is important to inquire both as to the nature and
the amount of it. In the first case, competitive traffic from Y was
_extra_ rather than normal in character, so far as the line serving
X was concerned. It was relatively small in amount. Whatever surplus
revenue resulted from it aided the local tariffs, including those
at X, in supporting the burden of fixed expenses. This burden they
were bound to bear entirely in the absence of competitive business
picked up at Y. The distant point Y of course had no complaint in any
event, and the chances are that X was benefited, as we have seen.
But in the second case the great bulk of the traffic from Y belongs
naturally to the direct line through X. It constitutes the mainstay
of its business. The direct line, unlike the roundabout one, cannot
withdraw from the field when rates become unremunerative. It is in
this business passing directly through X to stay. Nine-tenths of the Y
traffic, perhaps, moves through X in this latter case; in the former
one, one-tenth would perhaps measure the proportion of the indirect
line. Under this assumption, it is obvious that the question of the
level of rates at Y, as determined by the presence of competition,
assumes a ninefold greater importance in the eyes of X, so far as the
effect upon local rates in supporting the fixed and joint expenses of
the road is concerned. In any event, even the line operating under
a disability supposedly earns some small net return on competitive
traffic, else it would withdraw from the field. This it is in fact free
Public-domain text, read in full here on John Shaqi.
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