Railroads: Rates and RegulationsRipley, William Zebina
History
Railroads: Rates and Regulations
Ripley, William Zebina
Railroads -- Freight -- Rates -- United States; Railroads and state -- United States
per ton mile can be earned above the expenses incident to hauling
that sand or coal, it enables the rates on the dry goods or hardware
to be maintained at a lower point than they otherwise would be. It
is unnecessary to elaborate this principle further. It is everywhere
accepted as valid. And it in a measure substantiates Mavor's statement
that "freight rates, like rent, are rather the effect of price
movements than the cause of them." When tariffs are high because prices
are high, we are afforded a fair illustration of value of service as an
element in rate making.
Value of service, therefore, as affording a warrant for classification,
has also been recognized in a number of Interstate Commerce decisions
since 1887. A relation between the grade of the charge and fluctuations
in the market price of the commodity--in other words, charging what the
traffic will bear--is at times discernible. It is to the interest of
the public that carriers should be satisfied with relatively smaller
profits from the transportation of commodities of low price which are
in general demand.[339] Under these circumstances changes in price of
such staple commodities as iron and steel or the lower priced grains,
should be reflected in a corresponding modification of rates.[340]
Akin to this is recognition of a relation in general between the value
of a commodity and its classification. Where, for example, articles
representing different stages of manufacture have to be graded, it
is but fair that the raw material, or the partly-made product should
be graded lower than the finished article.[341] Similarly, articles
which may fairly be substituted for one another ought to be classified
with reference to their common market value.[342] The relative value
of commodities, as controlling classification, clearly governs the
treatment of hard and soft coal.[343] The practical difficulty, of
course, is to know where to stop in admitting such considerations.
Shall "small-vein" soft coal, because it cannot compete on even terms
with the "big-vein" product, be accepted for carriage on a more favored
basis?[344] Some rather nice questions, both of business and public
policy, would be suggested by such a precedent.
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