The Minneapolis journal., 1902-07-29
EFFECT OF RAILROAD RATES
ON MANUFACTURING CITIES
When Flour Is Disseminated Against in Favor of Wheat
Milling Will Tend to Go to the End Of Water Trans
portation Near Buffalo Pittsburg and the Iron Trade
Object Lesson to Minneapolis.

From The Journal Bureau. Room 40. PosB
ID1iidi'aa. Weshin0to,s.
Washington, July 29.-With articles of
large bulk and weight, where the trans
portation cost has good deal to do with
the selling price, it is a general rule that
the nearer the rates on the raw material
and the manufactured product come to-
gether the greater will be- the tendency to
manufacture where the raw materials are
produced, while on the other hand, the
more the freight rate on the manufac-
tured product exceeds that on the raw
material the greater will be the tend
ency to manufacture near the place of
cons sumption. Wheat and -four afford a
good illustration Of this. From almost
the beginning of the milling industry of
the United States, the declared policy of
the railroads has been to make substanti-
ally the same rate on -four as On wheat
Generally the published tariffs have
shown the same rate on the two articles.
In point of fact. however wheat has
frequently been carried cheaper than
flour. Water transportation completes
much more vigorously with the raw ma
terial than with the finished product.
Wheat may be shoveled by machinery
while barerl of flour is usually rolled
by hand. The risk is greater on the -four,
and for a number of reasons, a good deal
of rate cutting has DEVELOPED in the
wheat, with results that are Of national
Importance.
It Is hardly too much TO say that the
continued supremacy Of Minneapolis as
milling center depends the railroads
charging the same rates on flour as on
wheat. If they should make difference
Of 90 per cent, and that difference should
continue long enough to be recognized as
q policy upon which business men could
base their plans, the milling business
would go from Minneapolis to the end Of
water transportation on the great lakes
nearest the consuming population. That
would be Buffalo or Niagara Falls.
The millers of Minneapolis have not
been slow to see this tendency, and for
the last few years they have been COM
planning greatly Of the large expectation
OF wheat. They say that it ought to go
abroad as -four; it is eaten as -four and
with American facilities for manufacture,
1t would go abroad in that form, but for
the competition on the other side which
they have been unable to meet because Of
the lower freight rates of wheat When
the difference in the two commodities is
Il cents on the hundred pounds, it is in
ev1table that the product Of the western
grain fields will go abroad as wheat and
be turned into -four there. But if 100
pounds of wheat went across the Allan
tic no cheaper than 100 pounds of flour,
there would be no expectation of the raw
material 1t must, Of course, be as
sumed in both cases that the rate is
low enough to meet competition with the
grain coming from the Argentine, Russia
and Egypt.
1.-THE. trust issue, which promises to be
SO prominent in the coming months, can
never be intelligently considered, if at
ALL apart from the railroad question.
With its rapidly changing phases, the
railroad situation is furnishing the great
est industrial questions in America to-
day.
The Case of Pittsburg.
If railroad rumors which have reached
this city true, Pittsburg, one of the
most thriving and rapidly growing cities
on the American continent, is holding it's
place on the industrial map by the fiat
of the great railroad managers. Upon
their decree it's future rests. 1t seems