The Railroad Builders: A Chronicle of the Welding of the StatesMoody, John
History
The Railroad Builders: A Chronicle of the Welding of the States
Moody, John
Railroads -- United States -- History
Probably the country received its most
striking illustration of this when the West Shore Railroad in New York
State was built almost completely duplicating the New York Central, with
the result that both roads were nearly bankrupted.
While no one railroad can completely duplicate another line, two or more
may compete at particular points. By 1870 this contingency had produced
what was regarded as the greatest abuse of the time--the familiar
problem of "long and short haul." Two or more railroads, starting at an
identical point, would each pursue a separate course for several hundred
miles and then suddenly come together again at another large city. The
result was that they competed at terminals, but that each existed as an
independent monopoly at intermediate points. The scramble for business
would thus cause the roads to cut rates furiously at terminals; but
since there was no competition at the intervening places the rates at
these points were kept up, and sometimes, it was charged, were raised
in order to compensate for losses at the terminals. Thus resulted that
anomaly which strikes so strangely the investigator of the railroad
problem--that rates apparently have no relation to the distance covered,
and that the charge for hauling a load for seventy-five miles may be
actually higher than that for hauling the same load one hundred or one
hundred and fifty miles. The expert, looking back upon nearly a hundred
years of railroad history, may now satisfactorily explain this curious
circumstance; but it is not surprising that the farmer of the early
seventies, overburdened with debt and burning his own corn for fuel
because he could not pay the freight exacted for hauling it to market,
saw in the system only an attempt to plunder. Yet even the shippers
at terminal points had their grievances, for the competition at these
points became so savage and so ruinous that the roads soon entered
into agreements fixing rates or formed "pools." In accordance with
this latter arrangement, all business was put into a common pot, as
the natural property of the roads constituting the pool; it was then
allotted to different lines according to a percentage agreement, and the
profits were divided accordingly. As the purpose of rate agreements
and pools was to stop competition and to keep up prices, it is hardly
surprising that they were not popular in the communities which they
affected. The circumstance that, after solemnly entering into pools,
the allied roads would frequently violate their agreements and cut rates
surreptitiously merely added to the general confusion.
Public-domain text, read in full here on John Shaqi.
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