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 justice of allowing a carload shipper lower rates than one
who ships in small lots is apparent, on account of the difference in
the cost of such service to the railways. This has been recognized by
the Interstate Commerce Commission and the courts as beyond question.
Not only the amount of paying freight in relation to dead weight; but
the cost of loading and unloading, of billing or collection and of
adjusting damages--all of these elements of cost are noticeably less
in the case of a full carload. Turning from these considerations of
cost to those prescribed by what may be called traffic principles,
the difficulty in arriving at a just determination may be easily
appreciated. Glass battery jars in less-than-carload lots were at one
time charged from New York to Atlanta, Georgia, second-class rates,
namely ninety-eight cents per one hundred pounds. The same commodity
when in carload shipments (not less than 20,000 pounds) was rated as
fifth class; in which case the charge from New York to Atlanta became
sixty cents. Here was a plain difference of thirty-eight cents per one
hundred pounds--upward of sixty per cent. greater charge--to the small
shipper whose business or capital was insufficient to warrant shipments
to such an amount. Two results of such discrimination are possible. In
the first place, the large shipper is enabled to undersell his smaller
competitor and perhaps to drive him out of that class of business. This
may take place as between two dealers, both located in the South and
buying their supplies from New York. The second result is that under
such rates it is impossible for the manufacturer or northern jobber to
sell direct from New York to the retailer in the South in competition
with the provincial jobber there located, who ships his goods in at the
cheap carload rate and distributes them thereafter. The problem thus
concerns at the same time both the small local shipper or dealer, as
against a more formidable provincial competitor; and also the remote
jobbers as a class against the whole group of local middlemen. In the
latter case, sometimes, as in the South, the question is still further
complicated by a basing point system, under which the provincial jobber
re-distributes to the country stores the goods which have already been
shipped in on a low carload rate.[360] And, locally, there is also the
immanence in the South of water competition by sea and river to be kept
in mind. Boat charges are based upon space requirements rather than
weight. This introduces further important considerations in fixing the
spread of charges.
Public-domain text, read in full here on John Shaqi.
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