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 first is the charge
corresponding to the distance; the other is the charge as determined by
the character of the goods. Consequently, a variation in either one of
the two would result in changing the final rate as compounded.[317]
A concrete illustration or two may emphasize the commercial importance
of classification. So far as it may be used to effect an increase
of rates, the following case is typical, as given by a Boston
manufacturer, in evidence before the Senate Committee on Interstate
Commerce in 1905:
"From July 15, 1889, to January 1, of this year, the classification
(of carbon black, basis of printers' ink) continued to be once and a
half first class in less-than-carload lots, third class in carload
lots, approximately twice the freight required between 1887 and 1889.
Meanwhile, the price had declined.... On January 1 the classification
was again raised, to class 2, rule 25, an increase of about ten per
cent, in carload lots. Numerous efforts have been made by myself and
others to have this commodity classified where it belongs, as dry
color, but the only result has been the reverse of what we desired; and
the industry has been and is in a somewhat precarious condition, as we
have contracted for millions of pounds of black at prices fixed at the
point of delivery, and had no notice of the raise in freight rate until
subsequent to its going into operation."[318]
The Spokane Chamber of Commerce, in these same Senate Committee
hearings, gave an illustration of the use of classification to bring
about a change of rates without modifying the individual railway
tariff. "The Pacific Coast Pipe Company started to make wired wooden
pipe in the spring of 1900.... There was at that time but one factory
of the kind on the North Pacific coast, located at Seattle.... The
Seattle factory, backed by the big lumber firms on the coast, finding
a serious competitor in the Spokane field, got the railways to put
manufactured pipe under the lumber classification, thus reducing the
rate from Seattle to Spokane from forty-six to twenty cents per 100
pounds.... The Spokane factory at once filed a vigorous protest, with
the result that the railways put back the rate from Seattle to Spokane
to forty-six cents, but established a maximum rate of fifty cents for
Seattle pipe, which, of course, shut off all territory east of Spokane
from the Spokane factory.... The remnant of the Spokane factory ...
has been compelled to shut down, and the entire plant is being removed
to Ballard." Whether these facts are exactly as thus informally
stated or not, is by the way. If not done at this time, it is certain
that similar manipulation of classification rules often enters into
commercial competition.[319]
Public-domain text, read in full here on John Shaqi.
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