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 economic anomaly of rates actually falling progressively as the
length of the haul increases is graphically well illustrated in
the accompanying diagram, based upon data in the Georgia Railroad
Commission cases.[222] The charges from Cincinnati to local points
on all lines converging upon Atlanta equal the sum of the rates to
Atlanta plus the local charges out. This holds good even on the direct
line from Cincinnati through Chattanooga, as the diagram shows; yet
of course it also follows that rates must again decline as the next
basing point is approached in any direction; be it Montgomery to the
west, Macon to the south, or even Chattanooga to the north. The only
condition analogous to this in the Far West appears in those places
whose rates are made up by a combination of the low water rates to the
coast plus a local back eastward into the mountains. The transition
from this Pacific coast combination to the system based upon the
Missouri river occurs at those places where the aggregate charges from
either direction become equal. Viewed as a large matter of principle
the whole western system is analogous to the southern system. It is
inevitable in both that intermediate points should in all cases be
assessed at a higher rate than those adopted as bases.[223]
The reason advanced in support of these basing point or basing line
systems is that they are an outgrowth of commercial competition; in
other words, that they are compelled by conditions beyond the carriers'
control. Sometimes it may be the competition of widely encircling water
routes--as from New York around to Galveston and up to Kansas City in
the southwestern field, or to Mobile and up to Montgomery, Alabama, in
the southeastern states. But, in many other cases, market competition
from other centres of supply set the limit to the rate at the basing
point. Missouri river cities enjoy a great advantage over all
competitors, as meeting places of the ways. Generally, the low rates
to the base points have been originally accorded in order to build up
local distributive or industrial centres in the face of competition
from older places. Nashville undoubtedly owes a large measure of its
present prominence to the fact that in the old days its principal
railroad gave a foothold and made a clientage for its merchants as
against older rivals in Cincinnati and Louisville. Nor can it be said
that this was an injury to that clientage, composed of consumers all
through the adjacent countryside. Rates for these consumers were not
put up, in order to build up Nashville. On the contrary, Nashville
was given perhaps inordinately low rates, in order that the sum of
these low rates and of the local rates out to Four Corners should be
at least as low as those from Cincinnati and Louisville direct. This
last argument is the main economic defence of the southern basing point
system.[224] It applies equally to the advocacy of a low basing line at
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