The thing went from bad to worse as the great land carriers developed.
Each made its rate-sheet according to its own sweet will; it classified
freight precisely as it pleased, and the man down in New Orleans sending
goods to New Hampshire was puzzled as to the charges that would accrue
upon his shipment when it finally reached the northeastern corner of the
country. The competitive feature grew to be the strongest in the making of
the rate-sheet, unless it was the subtle influence of the railroad's
favored friends, an influence that showed its ugly head oftener in the
practice of rebating than anywhere else. The fierce competition that ruled
between the railroads in the seventies has never been approached at
another time. Ruinous rate-war after rate-war followed upon each other's
heels, and little roads kept dropping into bankruptcy, one after another.
There was a time in 1877 when a man might ship a carload of live-stock
free from Chicago to Pittsburgh, from Chicago away through to New York for
five dollars; and there is hardly a more expensive commodity for the
railroad to handle, than cattle. To appreciate what these wars meant to
the carriers, bear in mind that the week after this particular one was
settled it cost the old rate--$110 a car--to ship cattle from Chicago to
New York.
Out of such guerilla warfare came the one possible thing--coöperation. The
railroads were not then big enough to consolidate their properties, J. P.
Morgan had not then developed his fine art of welding them together. So
they did the next best thing and made secret contracts--pooling. That is,
they established a standard rate-sheet in their mutual territories and
bound themselves to abide by it for a certain length of time. They figured
out their relative percentages of business at the beginning of any
agreement, and took from the combined earnings of the pool, the same
percentages of receipts. The bitter outcry that went up across the land
against pooling still echoes. That practice with another now also
prohibited--rebating--really gave birth to governmental regulation of
railroads.
[Illustration: "THE INSIDE OF ANY FREIGHT-HOUSE IS A BUSY PLACE"]
[Illustration: ST. JOHN'S PARK, THE GREAT FREIGHT-HOUSE OF THE NEW YORK
CENTRAL RAILROAD IN DOWN-TOWN NEW YORK]
[Illustration: THE GREAT ORE-DOCKS OF THE WEST SHORE RAILROAD AT BUFFALO]
In 1887 the Interstate Commerce Commission was born, and ruinous
rate-warring practically came to an end. The Commission required the
railroads to file with it copies of all their rate-sheets, both freight
and passenger, and ordered that in almost every case thirty days' notice
should be given of any change in the tariff. This meant that the old
practice of tearing a rate-sheet apart in a single night, so as to jab
vitally into the heart of a competitor, was at an end. And a dignified
rate-war, with the opponents giving thirty days' advance notice of their
strategic intentions, is almost an impossibility.
Public-domain text, read in full here on John Shaqi.
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