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 second step necessary for permanently developing railroad business
was a lowering of the charges. This was first brought about during
the seventies through unregulated competition between the trunk
lines. The fiercest warfare occurred during the years immediately
following the entrance of the Baltimore and Ohio and the Grand Trunk
railroads into Chicago in 1874. This was some five years after the
Pennsylvania and the New York Central had consolidated their through
lines to the same point. These two original rivals had already slashed
rates indiscriminately. Charges of $1.88 and 82 cents for first-and
fourth-class freight from Chicago to New York in 1868, had already
for a brief period in the following year dropped to a uniform rate
of twenty-five cents for all business. As Hadley justly observes,
such rates could not long prevail; and for the next few years nominal
rates of one dollar, and one dollar and fifty cents for first class,
and sixty and eighty cents for fourth class obtained. The outbreak
of open warfare between the Baltimore & Ohio and the Pennsylvania
over the charges made by the latter for the use of its lines between
Philadelphia and New York, occurred in 1874. Grain rates of sixty cents
per hundred pounds from Chicago to New York during 1873 fell to forty
cents in 1874 and to thirty cents in 1875. Special or commodity rates
were often as low as twelve cents. After a year's truce, only partially
observed by the leading participants, discord again prevailed during
1876. The commercial rivalries of seaboard cities now became involved.
Different or specially favorable rates had been accorded to Baltimore
and Philadelphia as compared with New York since 1869.[12] Rates
finally fell lower than ever before. This was especially true of grain.
The published rate in March, 1876, was forty-five cents per hundred
pounds from Chicago to New York. In May it fell to twenty cents--a rate
almost as low as prevails today with all modern improvements in methods
of conducting the business. Westbound rates dropped correspondingly.
Quotations from New York to Chicago at twenty-five cents per hundred
pounds first class, and sixteen cents fourth class were freely given.
Actual rates were often much lower than this.
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