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 further aspect of economic waste may be mentioned, especially as
bearing upon Federal regulation so far as it affects carload ratings
and commercial rivalry between remote middlemen in the large cities
and provincial jobbing interests. The actual cost of handling small
shipments being about one-half that of carriage by carloads, the
cheapest way in which to supply, let us say, the Pacific slope or Texas
territory, is to encourage the local jobber who ships by carload over
the long haul. For, obviously, distribution by less-than-carload lots
from New York, or even Chicago direct, direct to the cross-road store,
is bound to be a wasteful process by comparison.[285] But in addition
there are also, of course, the social factors to be considered, which
are of even greater weight.
The causes of economic waste in transportation are various. Not
less than six may be distinguished. These are: (1) congestion of
the direct route; (2) rate cutting by the weak circuitous line; (3)
pro-rating practices in division of joint through rates; (4) desire for
back-loading of empty cars; (5) strategic considerations concerning
interchange of traffic with connections; and (6) attempts to secure
or hold shippers in contested markets. These merit consideration
separately in some detail.
Congestion of traffic upon the direct line is a rare condition in
our American experience. Few of our railways are over-crowded with
business. Their equipment may be overtaxed, but their rails are seldom
worked to the utmost. Yet the phenomenal development of trunk line
business since 1897 sometimes makes delivery so slow and uncertain that
shippers prefer to patronize railways less advantageously located, even
at the same rates. The congestion on the main stem of the Pennsylvania
railway between Pittsburg and Philadelphia is a case in point.
Special rates or rebates often divert traffic. The weak lines, in that
particular business, are persistently in the field and can secure
tonnage only by means of concessions from what may be called the
standard or normal rate. The differential rate is an outgrowth of this
condition. The present controversy over the right of the initial line
in transcontinental business to route the freight at will involves such
practices. The carriers insist that they can stop the evil only by the
exercise of choice in their connections. An interesting recent example
is found in the Elkins Committee testimony. It appears that lumber
from points in Mississippi destined for Cleveland instead of going by
the proper Ohio river gateways was diverted to East St. Louis. The
operation was concealed by billing it to obscure points,--Jewett, Ill.,
near East St. Louis, and Rochester, Ohio,--and there issuing a new bill
of lading to destination:
SENATOR DOLLIVER. And these people carry it up to this little
station near St. Louis and then transfer it to another station
near Cleveland?
Public-domain text, read in full here on John Shaqi.
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