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 great contest between the trunk lines over the granting of
differentials to Philadelphia and Baltimore, as against New York
and Boston, played a not unimportant part in the diplomacy leading
to the acceptance of the MacGraham system. The New York Central,
the Lake Shore, and the Boston & Albany roads, of course eagerly
accepted it, because it promised aid in meeting the lake competition
to which they were peculiarly exposed. The Pennsylvania and the Erie,
lying considerably further from Lake Erie, would also be benefited,
operating as they did in a territory naturally tributary to them, but
exposed to drainage to the lakes by lateral lines. But the Baltimore
& Ohio, ever since its entry into Chicago in 1874, had been a thorn
in the flesh of the others. The territory along its line was so far
from the lakes that it had little to fear from water competition at
intermediate points between Chicago and the seaboard. Would it accept
a plan primarily intended to meet a danger which, while injuring
its powerful rivals, was of less consequence to itself? Fortunately
for the scheme, it was based upon the solid principle that distance
was of preponderating influence in the adjustment of rates. The
entire contention of the Baltimore & Ohio and the Pennsylvania for a
differential rate to Baltimore and Philadelphia below New York rested
upon this same principle. The distance from Chicago to the southern
ports was less. Consequently, they insisted, they were entitled to
offer a lower rate. The MacGraham scale and the port differentials
were thus logically connected. They stood or fell together. The
MacGraham plan materially aided the Baltimore & Ohio in making good
its demands.[404] It was acceptable, therefore, by reason of this
collateral advantage.
Another factor in the situation appealed to the Pennsylvania and the
Baltimore & Ohio. Their lines to tide water were about seventy-five and
one hundred miles shorter, respectively, than the shortest line to New
York.[405] In the division of the joint through rate between a chain of
connecting railway lines this was of great advantage. It always aids
the shorter line if pro-rating is based upon mileage. A feeder one
hundred miles long pro-rating with a trunk line one thousand miles in
length would be entitled to only one-eleventh of the total rate. Were
the trunk line only eight hundred miles long, the neutral road might
claim one-ninth. This seemingly slight difference might mean several
hundred thousand dollars more earnings to the neutral road or feeder,
if it turned over its business to the short line.[406] Any emphasis
upon distance as a general principle strengthened the Baltimore & Ohio
in securing patronage from other roads by this means. The other trunk
lines, through acceptance of the MacGraham scale, conceded the distance
principle, and with it, coincidently, the pro-rating practice.
Public-domain text, read in full here on John Shaqi.
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