New-York tribune., 1879-11-22
LETTERS FROM THE PEOPLE


DETERMINATIONS IN RAILROAD RATES.
on WHICH THEY SHOULD DE ARRASGED AND
MAINTAINED.
To the Edftor OF The Tribune.
SIR: In THE TRIBUNE of August % is an
editorial entitled Railroad FreIghts" which states
for differences In rates which appear TO
10 be likely permit the reader 10 draw wrong con-
illusions TO the principles which govern rational
rates for railroad transportation unless other circnm-
stances than those there mentioned taken into 40
count
IL Is not always or necessarily true that TO carry
through freight less ton mile than to carry
local freight Usually 1t Ia not truo Mt all that the
transportation costs less when each or few shippers
supplies larger quantity than when many Shippers
supply each small quantity. Circumstances some
times such that the OF hauling local freight is
less than that OF hauling through freight over the same
road II depends very much the difference between
the amounts OF freight offered at the different
stations in the two directions. On the Trunk
lines there are at least three tons OF through
freight hauled East 10 hauled West Therefore four
tons OF freight have to pay expenses Incurred sufficient
for hauling the whole Length of the road
Now where there is n local station which ships Wcst
just aboat much 1t receives from the West In
quantities sufficient load regular tranwbich may
he weekly or even monthly, not necessarily daily
though the haul be only one-haf or onc-qnarter
the length OF the road the expense ton per mile will
be much less The actual average cost OF ocai freight
bauls doubtless considerably larger than that II
through haus but this Is chiefly due to the rresuarity
Of traffic and 10 the -hortuess of the hauls and
the average includes in which the cost l.
less we'll many which the cost Is greater. than
for through frcigh, shipments
Again. to large shipments Dy single shipper: con-
cerpng this The railroad companies well as the pub
Inc very commonly MAKE radical mistake. Tbi' is hat
niq - whole
sale shipments. Taking the railroads altogether,
this IL never true. At the rates Just
much grain aud -four aud provisions
Will he Skipped from Chicago 70 Now-Yors II taken In
lots carcad II taken I'm lots OF 100 carloads,
just mneh every day. IN just the same fully loaded
trains with Just the expenses for loading and ua
loading and with such sm I'll difference in cost of bill
ng etc uhe whole of which is Insignificant when eight
is taken in carload Ots t1 he worth mentioning
The reason why railroad sometimes gives rebate to
large shipper is because IL fears other railroad
get his freight, not because II can carry his 100
carloads than Will he incurred for
ing 100 carloads for 100 different shippers This matter
Wholesale and retail shipments is OF fundamental
Importance 70 the community. II the trader who has
100 carloads 70 ship get his grain carried from th
cago TO New-Yogk at 81 cents per 100 pounds, when
shippers of smaller quantities have 10 pay 30 ceni then
II will h. mtuc forever Impossible To build up o1s-
ness" And tins Is true IN most branches o! nanui!c-
lures well a. In commerce. Tie biz establishments
were such differences in rates made general would nave
protective tariff against the small rsblis shmonts IL
should he noticed that when the railroad companies
have nIdo agreements Tor dividing the trac at ace1
where tscy compete aud WHERE therefore. they do
tear to lose their traffic to competitors. the shipper OF
single carload Is allowed just the same raesas the snip
pcr OF larger Quantities. and there arc packing osta
lishmcnts IN Chicago which have an average of eighty
coi-oads daily tn ship.
But the fundainental error commonly made wnen
raj DAD rates discussed is the assumption that d
erces in rates are justified only by differences III cost
40 tran pOrtatiOn business, and scarcely any Oih,r
business, DC conducted nationally ON this basis IL
II were enforced IN ihe business of laiiroad ths ora
tor IT'S inevitable eject venture 10 sal WOuu Dv' nl
such roads the trunk lines To double the average
rates ior carrying irclgnt "A & r1ioa prDns nro1 0r
on different kinds O goods Of small profits on some
kinds and largo profits on other kinds perhaps ticfn
no profits on Important Dranchrs OF tne business
and sometimes losses The railroad does what the n
dcrs; that s accepts the best rates II can get ~
has 10 different articles of transportation Tor sale
II il compelled to charge the same rate OF proh Oi
rate per ton per nic ON each article nothGg
is more certain than that IN will bc unable 10 sell very
large share goods But the railroads do ana must
do the mercban,sNO accept any rates that bied
any profit rather than lose any brancn OF their Traffic II
they did accept small profit on their through bust
whole OF their profits would have To come from that
portion the freight which already pays the highest
rates with the eject OF raising these latter rates, o
reducing the profits of the railroads. or OF bot-and
doubtless S Dat Tn & no M 10 tns
to the cost OF the service
But though the differences between through and local
rates must often be very great they may be- and soine-
time, certainly a1e too great that Is. greater than the
necessity requires as when the railroads carry from
Chicago To NewYork for 10 TO ID cents per 100
pounds The difficulty Is that Tho public IL likely 10
condemn the differences because they arc great with
considering whether or they are necessary. Tho
cOmnlouest of all iaaccs regarding rates IL that they
should properly be in proportion 70 the eos; ranortn
ton. Eut they not and cann0; be. governed by ITS
cost but only by its vaurby the price which people
will pay fog II, which limits the charges absolutely In
direction. II Is tins principle. that rates must 90
limited by the value o the service ana cannot be IN
proportion 20 the cost that explains most of the dif-
ierenccs I'm railroad rates, far those differences
rational Mt al and 10 al the bottom OF the ference
10 rates creut classes Of fregnts well as Ger
rnccs between through aud local rates, etc. And the
Ill ference between tho rates the highest class aud
those ON the lowest class OF freight Is usually much
greater than the difference between through and local
rates To-day the frstcass rate from Chicago 10 New
York four times high the grain rate IL is often
six times high aud sometimes has been eight times
ms Nigh. W.D.
Neic- York. Aus. 27. 1879.