The heart of the railroad problem: The history of railway discrimination in the United States, the chief efforts at control and the remedies proposed, with hints from other countriesParsons, Frank
History
The heart of the railroad problem: The history of railway discrimination in the United States, the chief efforts at control and the remedies proposed, with hints from other countries
Parsons, Frank
Railroads -- Freight -- Rates -- United States; Railroads and state -- United States
The weight classification killed Knapp’s business, but a few small
independents lived in spite of it. So another move was made on the
railroad chess-board. Three great railroads tap the Kansas oil fields:
the Santa Fe, the Missouri, Kansas and Texas, and the Missouri Pacific.
In August, 1904, just as the Standard finished its pipe line to Kansas
City, the rates on crude oil and its products were raised by all the
railroads on the field. The rate to Kansas City went up from 10 cents to
17 cents a hundred; and the rate to St. Louis rose from 15 cents to 22
cents. On a carload of fifty-five thousand lbs. the increase in the
freight to Kansas City was $38.50, or $93.50 total, and $121 to St.
Louis. This was prohibitive. In their testimony given in March last
(1905), shippers, even those who were using their own tank cars,
declared that the change in rates compelled them to stop business at
once and shut down their wells.
The advance in freight was not a part of a general readjustment of
rates. It was made alone. And it made oil rates out of all proportion to
other rates. The freight from Chanute to Kansas City was $50 for a car
of wheat, $40 for corn, $66 for machinery, $28 for cattle, and $30 for a
car of fruit, against $93.50 for oil, the least valuable of all, and
formerly carried for $50 or $55 a car.
The examiner at the recent Kansas investigation presented the following
letter in explanation of the railroads: “The reason the Santa Fe and the
‘Katy’ railroads raised rates on oil after the pipe line was completed
was because the Standard’s companies arranged with them to do so, by
agreeing to give them a percentage upon every barrel of oil that was run
through their pipe lines on condition the railroads would increase the
freight rate on oil to a prohibitive rate, so that all the oil would be
forced through the pipe line. Now the railroads have no oil, but get
about ten cents per barrel for all oil going through the pipe lines.”
This is similar to an arrangement that existed for several years from
1884 on between the Pennsylvania Railroad and the Oil Combine by which
the railroad was to have a fixed sum per barrel on 26 percent of all the
oil going eastward from the Pennsylvania oil fields, whether the oil
went by rail or pipe line,[300] in consideration of which the railroad
was to put up the rates on oil.
Public-domain text, read in full here on John Shaqi.
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