Los Angeles daily herald., 1889-08-20
A BIG CUT.
Reduction of Freight Rates
Along the Coast.
EIGHTY PER CENT. TAKEN OFF
The Pacific Coast Steamship Company
Propose to Drive Out COMPETE
tiOn-A Rate War.

Last Saturday the Pacific Coast Steam
ship Company gave formal notice at it
offices in San Francisco that large re
duction would be made in freight rate
to take effect Immediately. Word wal
forthwith sent to all its agents, ant
freight is now being received under the
new schedule. The reduction is of such
q wholesale character that it is likely tt
produce considerable furry in the Local
market, and perhaps quicken business te
q very appreciable extent.
In the present duilness of traffic al
over the country, the proprietors O
TRAMP or Independent steamers ant
sailing vessels have found very little tt
do. Several of them on the Pacific
Coast have. been making regular
business of plying between San Pedro
and adjoining points and San Francisco
and the North. Two of these, the
schooner Protector and the steamer
Santa Maria, have cut very seriously
into the carrying trade of the Pacific
Coast Steamship Company, making 50
rate per ton for general merchandise
against the "a rate of the Steamship
Company. The consequence of the com.
petition in rates WAS that the two indie.
pendent vessels soon had all the freight
they could handle, and the Steamship
Company was very much inconvenienced
by the loss to the regular business.
The Steamship Company asserts that
fhooa xyaooalo oa,11d hovy ham nor
ing freight at any profit at the rates
they must have expected the company tc
offer them some sort of an advantageous
compromise. Instead of that the Steam.
ship Company has started in to drive
them out. There has been no temporizinl
with competing cuts. AT one blow the
company has reduced its rate to figure
which, it believes, the Independent
steamers cannot possibly meet, hoping
by this process to freeze them out en-
tirely.
The rates from San Francisco south
suffer reduction of eighty per cent
that is, to twenty per cent. of their
former standard General merchandise,
formerly carried for "a a ton, now goes
for 81 ton. There is, however, this
limitation to the cut, that nothing is re.
duced below the general rate OF 81 ton
Otherwise the cut is horizontal, extend.
ing into all lines of freight. The reduc-
tion holds from San Diego and all other
points at which the steamers stop, the
same as from San Pedro.
For freight going north the reduction
is general rate Of fifty per cent, but
with some special exceptions. Thus all
grains 20 at $l.00 per ton. AS some Of
these have been listed at $3.50 and So co.
this makes larger reduction than fifty
per cent. For freight, between inter.
mediate points along the Coast, special
schedule has been prepared, too COM
plicated to admit of full statement
here, but the reductions may be said in
q general way to amount to about fifty
per cent.
This cut was decided upon, last week
and went into effect when the Queen oi
the Pacific started south from San Fran.
cisco. 1t will be in effect until further
notice, which means, probably, until the
Independent vessels are driven away
from the Coast, or until some sort of 9
compromise is brought about.
The results of the reduction are likely
to show themselves in an immediate
stimulus to general business, although il
is not likely to be-from this one cause
alone-either very deep or very lasting
Dealers who buy through San Francisco
and northern points will probably stock
up ali standard and imperishable arti.
cles, and may be able to do better bush
ness for time. A large per cent. o.
careful business men express themselves
hnUnynr hoinn uo 0f rpdnn
tions in freight rates, which can last only
result is to over-stock the market with the
lower rate.
The advantage of the cut in the freight
rate for grain just in the season of har'
vesting is a more important phase of the
question. Barley is now quoted in San
Francisco at 671a against 621a here. Il
is not impossible that a reduction o.
from so to rs per cent. on the rate o.
freight will have the effect of stiffeninl
if not of advancing the barley market
The prospect is that 200 or 800 carloads
of barley will be shipped East for brew
ing purposes from Southern California
a number of carloads have been sent al
ready and more are ordered. The effecl
of this reduction will probably be te
raise the price obtained by the farmers
for their grain.
There does not appear to be any dis
position on the part of the Southern
Pacific to cut to meet the reduction made
by the Steamship Company, as it is re
garded merely as atemporaiy matter ,ant
not done for the purpose of starting 6
war with The railroad. 1t is almost as
much to the advantage of the Southern
Pacific to have competing steamer
which do not come into definite agree
ment on rates out of the way as it is tt
the advantage of the Pacific Coas
Steamship Company.
This fight is an exact counterpart of on
which took place twelve years ago whel
the Coast Companyidrove out a comepet
ing line.
Rnn}O DnADV