Arizona republican. [volume] (Phoenix, Ariz.) 1890-1930, 1904-04-20
RAILWAY RATES AND CONGEST.
ED MARKETS.

There has been If late a controversy
in southern California between the
railroads and the fruit growers over the
rate on citrus fruit from that section
to eastern points. The growers claim
that the current rate of $1.25 per hun
dred pounds, which is a blanket rate
applying to all points east of the Mis-
souri, river. is too high, and that it
should be reduced to 81. The railroads
insist that the present rate is a reason
able one and that they cannot afford
70 carry the business for less. The
growers admit that when the rate was
established, S1.25 per hundred pounds
was very reasonable, but that the con-
stantly increasing volume of traffic
enables the roads to handle it cheaper
and that therefore the rate should be
reduced.
ore of the principal functions of a
railway, particularly in new sections of
the country, is the development Of bust
ness, in order that it may succeed to a
constantly increasing amount of
traffic. Approaching the principle of
increasing returns. railroads invading
new fields seek to promote the largest
possible development of the country.
When the Southern Pacific and the
Santa Fe railroads undertook the de-
veloDment of southern California. il
was practically a desert, but II pos
sessed great possibilities; and having
In view this fact, the railroads expcnd-
ed large sums of money, not only in
construction, but for years did bust
ness at a loss. The rate of S1..5 when
established, was not q profitable one.
1t was am emergency rate, deemed ne
cessary in order that the fruit growers
might establish themselves. To use it,
therefore, as a basis of a claim for low
or rates because of changed conditions
is not justified
1t is a fav0rite method with ship
pers, selting to obtain lower rates. to
argue that because a given rate was es-
tablished in the early days of a partic-
ular traffic, it was per Sc, evidence of
its profita bleness. This argument is
usually founded on an unwarrantab'e
assumption. Had the railroads pro-
ceeded on the theory of remunerative
rates from the beginning, southern Cal
ifornia, and in fact the larger portion
of the western area, would be desert
wastes today. Instead of this theory
the plan adopted was a basis or rates
that would enable the people invading
the new country to live and develop.
regardless of immediate profit to the
railroads. The rate basis was consid-
cred as a sort of supplementary invest
ment. intended to make the existing
plant effective. The history of most
roads projected into new countries fully
bears out this statement, and the fin
ancial wrecks of the pioneer railroads
Of the west furnish abundant evidence
Of it's truth.
In the conduct of this controversy
there is another and important point
which seems to have been overlooked.
The complaint is thatt with the low prices
prevailing for citrus fruit it is impos-
sible to pay the existing rate ana make
any profit. 1t is a fair question if this
condition is not brought about by the
overDroduction of citrus fruit, rather
than by the rate. This commodity is
and always will be a luxury. 1t is al
so perishable and an overstocked mar
ket of it is fatal to prices The COM
bined output of Florida and California,
to say nothing of the Mexican and Ari-
iona contribution, seems to be more
than the demand and it is no uncom-
mon thing for this fruit to be offered
in eastern markets for less than cur
rent prices at the point of production
During an investigation conducted by
the Interstate commerce commission,
somewhat more than a year ago, in
which the rate question was an issue
one of the commissioners asked a wit
ness who complained Of the rate, how it
was that if the rate was exorbitant
he could buy oranges in Washington
fully as cheap as he could in Los An
geles. The witness could not explain,
but the answer is simple. In Los An
geles oranges are sold on the street for
what they are reasonably worth as al
luxury. The subject of surplus there
is not controlling, as the growers can
ship whatever is not required for home