The record-union., 1891-10-26
THE REAL CONTEST.

LIE NEAL SON
Anyone who has followed with pains
taking care the current controversy re-
lating to freight rates, and especially
those who have read the interview with
Traffic Manager Gray of the Southern
Pacific Company, will be impressed with
the fact that there is conflict between
East-bound and West-bound freights.
Mr.. Gray shows that, from the first, the
Eastern connections Of the Southern Pa
chic Company were averse to carrying
the products of California at unremuner-
atiVe rates; that as far back as 1881, when
rates were higher than now, the Union
Pacific declared that the tonnage to and
from the Pacific Coast was the least
profitable freight transported by that
company. The cheap and raw products
OF California must be carried at a low
rate, or the cost of their transportation
Will consume their value. An article of
traffic produced 500 miles from its market,
carried at cent a ton per mile, would
have So per ton per mile added to its cost
when it reached market. The same
article produced $500 miles from its mar
ket, carried at cent ton mile, would
have S25 per ton added to the cost of its
production in its final market. It will
be seen at once that the competitive rela-
ton sustained by the products produced
800 and $500 miles from the final marke ct
would be vastly in favor of the former.
To meet this, transportation agencies are
forced to make lower rate per ton per
mile, or arrest production at the end of the
2,5OO-mile line. Forty per cent. of one cent
per ton per mile would give $40 per ton
at the end Of the $500 miles of road.
Thus 40 per cent. of the short haul rate
would add 100 per cent. to the cost of
movement. 1t becomes apparent, there
fore, that an outgoing commerce, which
like that of California must be carried
$500 and 5000 miles, must be carried at a
low rate or be shut out Of the market
On the other hand high-priced goods, car
pets, window curtains, clothing, fine
furniture, pianos and other costly arti-
cles will bear high rate; so that the sit
uation with reference to East and West
bound freight in California is clearly ex-
pressed by saying that cheap products,
which will not bear high rate, are East
bound, and costly products, which will
bear high rate, move west.
We ship the products ofCalifornia to
the Eastern States to be exchanged for
the more costly commodities. To con-
slider either by itself is to take into con-
sideration but one-half the subject. Both
must be considered together. The East
and the West-bound freight constitutes
the same volume of freight. They sup
plement each other. Each exists because
of the other. In proportion to the amount
we sell, in that proportion we buy.
Therefore high rate which shuts our
products out of market reduces our
purchasing power and correspondingly
reduces the West-bound freight 4 low
rate on the cheap commodities creates a
tonnage which will bring a higher rate.
The Transcontinental Association con-
sents to constant cheapening of the
rate on the products of California
because of the profitableness of the West
ern carriage. Any association of ship
pers, whoever they may be, and what
ever representation they may make. will
find this statement to be entirely just.
Mr.. Gray shows that with the reduc-
tion of East-bound rates the tonnage is
increased. Canned goods, which in 1880
reached volume of 100000 pounds, by
a reduction of freight rates in 1890 reached
$4,000, 600 pounds. The tonnage of dried
fruit in 1880 was only 100000 pounds; in
1890 there was forwarded by rail 81, 500, :
600 pounds. And so on through the list
Now, when we shipped 100000 pounds
of canned goods we received return in
money for that amount. When we
shipped S3,O00,000 pounds we received
twelve times the return of 1880. This in
creased the purchasing power and CORE
spondingly increased the volume of that
class of freight which can pay profit to
the carrier for its movement. The mer-
chants of the country in demanding re-
duction Of the freight rate on merchan-
disc may be jeopardizing the low rate on
East-bound freight
/ Certain it is that the interest of eastern
railroad connections in the growth of
California relates chiefly to the increase
OF the West-bound traffic because that
alone is profitable to the carrier. 1t is
equally certain that the eastern connec-
tons of the California system will not
carry the cheap freight unless they are