The record-union. [volume] (Sacramento, Calif.) 1891-1903, 1892-04-18
Some Illustrations That Are of Es-
pecial Interest.
How 1t is That Parallel Roads Do Not
Always Compete, and How 1t Is
Connecting Roads Often Do.
From the Stockton NALL

country may be owned by single cor
poration. At the same time all the roads
in another section may be in the owner
ship Of a single corporation and yet COM
petition exist between these two roads.
That is to say, there is competition be-
tween connecting lines in continuous
chain of railroad as well as competitive
relation between parallel lines reaching
common terminals. The movement of
the potato crop of 1891 from California
will serve to illustrate the fact that there
is competition between railroad systems
geographically remote from each other.
There was an abundant crop of potatoes
IN California in 1891, like good fortune
attending the same crop in the Missis-
sippi Valley. When there is production
in excess of nome consumption trans
portatlon becomes factor in marketing
any product. The market for potatoes
was found last year in Texas, Colorado,
Arizona, New Mexico, etc. The princi-
pal market, however, was in Texas, the
demand to be supplied from the Missis-
sippi Valley or from California. Califor-
MIA and the Mississippi Valley thus came
into direct competition for the control of
that market. Zach desired To supply the
existing demand. The large surplus
production at home had made the surplus
Valueless in the home market. A distant
market and the only one in existence,
therefore, had to be sought. If California
supplied the demand in Texas for pota-
toes the Southern Pacific Company would
get the benefit OF the freight. Ii the Mis-
slssippi Valley became the point of sup
ply then the railroads serving the Pacific
Coast would lose that freight. Thus a
competition arose. The supply to be car
rlpd over thn SOnf horn paai of .,
point most remote, it could meet the
competition offered by lines carving
from the Mississippi Valley and supply
the demand for California potatoes only
by carrying at a less rate per ton per
mile. This it proceeded to do, but the
roads connecting Texas with the Aiisss-
sippi Valley Immediately determined to
control the market. At the same rate per
ton per mile offered by the Southern Pa
clfic the Mississippi Valley would sup
ply all the demand Tor potatoes in Texas,
In fact over that short line a profitable
and paying rate might be had which
would be ruinouS to longer line. 1t
became necessary, therefore, that a COM
bination between the lines should exist
II California enjoyed any part OF the mar
ket. An agreement was reached whereby
the lines supplying the territory demand
ing the article of freight would each share
in the trade, and by reason of this ac-
this agreement to eliminate the COMPETE
tive relation and fix reasonably profit
able rate on the carriage, the Southern
Pacific carried out of California $500 car
loads OF the potato crop of 1891. If the
Southern Pacific had attempted TO supply
the entire demand in the region where
the only demand existed, and had there
fore attempted to deprive the Mississippi
Valley OF all market, the geographical
relation sustained by the latter would
have enabled that section and the roads
serving 1t TO have monopolized the mar
ket, for, as already shown, q rate which
would have been reasonably profitable
from the Mississippi Valley to Texas
would have been below the actual cost of
transportation TO the Southern Pacific by
reason of the difference in distance 1t
would have been possible, however, to
have forced the Eastern connections of
Texas to have incurred a loss on the
business and without loss to the Southern
Pacific, and at the same time without
gain to the latter company. For illustra-
ton, if the Southern Pacific COMPANY
had offered to place potatoes in the mar
ket OF Texas at given rate, the proceed
ing would not have created market for
California potatoes; il would simply
have forced the Eastern railroad connec-
ton with the Mississippi Valley to do
business without profit or at actual loss.
In actual practice, the accommodation
reached between the systems in competi-
ton for the trade resulted in the move
ment of 800 carloads OF potatoes which
would have rotted in the fields.
The whole carrying trade is permeated
with the solution of problems of this
character. Recently beet sugar factory
was established in Utah. Among the
initial steps to the establishment Of that
industry in the Territory was an applica-
ton TO the railroads to pro- ect the infant
~ hn rafa Of f.os
sugar to Salt Lake. The projectors of the
enterprise represented TO the railroads
heretofore supplying the Territory with
sugar that while it would be within their
power to reduce the rate on sugar and
thus force the local manufacturer to sell at
lower rate. the development of the in
dustry would confer population and
wealth upon the Territory, which in time
would reimburse the roads for any loss
of freight earnings due to the home pro-
duction of sugar. Here again arose n
competition between Eastern and West
ern roads. Utah is connected eastward
with points of production for sugar as
well as westward, and thus directly con-
Meeting lines of railroad in continuous
chain became competitors TO a greater
extent even than if they had been par
allel lines. The reduction of freight rates
on sugar might have conferred upon
distant points of production for that arti-
ZIG cOiIS W lLC IIlJuTf OI Tie
enterprise which was in the nature of
home production TO Utah.
Still another case exemplifying this
principle of competition between systems
of railroad relates to sections of the coun-
try remote from each other. The North
west territory comprising Wisconsin.
Minnesota ana Dakota, had been sup
piled with citrus fruits from Florida.
The Southern Pacific Company and its
Eastern connections desired to share in
that trade. a very low rate of TRANSPORTS
ton from the West would influence the
rates obtainable by the lines connecting
Florida with the Northwest. 1t was COM
petent, however, for them in any war of
rates to seriously curtail consumption of
the California product. AS in other in
stances, fair adjustment was reached
whereby the California orange-growers
share in the markets of the Northwest.
In all these instances il should be
clearly perceived that the California ship
per and carrier had closely allied inter-
est. The orange-grower and the railroad
corporation over whose lines the oranges
would be carried had in fact direct part
nership in the result. and as in the case of
the movement OF the potato crop. the Pa
cific Coast side of the controversy could
share in the market only by allowing the
Eastern carrier reasonable compensa-
ton for the service rendered, and simply
because the Eastern carrier possessed the
power to shut the California products en-
tirely out of the market. California de-
ciduous fruits are subject to the same
law. 1t is the common fallacy to sup
pose that the railroad systems over which
the commerce generated by the produc-
tions of California are carried have ar
bitrary control of their freight rates.
This is far from the truth. In the distri-
button of the products of the soils and
climates of the different portions of our
country competition exists. Between
Florida and California there is compe-