Omaha daily bee., 1910-03-01

The Effort to Boost Railway Rates.
A most interesting and timely arti-
fcfe, entitled, "The Great Railway Rate
Battle in the West" is contributed to
the current Scribners Magazine by
Samuel o. Dunn, in which he tries to
give a bird d'seye view of the movement
to boost rates all along the line. The
various schedules of transportation
charges have grown up apparently at
haphazard' between the two limits OF
the additional cost of carriage and the
amount the traffic would bear. That
is to say, in fixing a rate originally
the railroads have figured how much
the shipper could afford to pay as
against how little could be exacted
without loss TO the road, and also the
possible future development of the
trafic. The. basing points and inter
mediate points have forced modifica-
tions to meet water and rail competl-
tion which accounts for the obvious
disproportion between through and To-
cal rates. To quote one example cited
by Mr. Dunn, salt Lake City is 900
miles west Of Omaha and 500 miles
east of San Francisco. The frst-class
through rate throughout the east to
San Francisco is SO. A shipper at Salt
Lake City has to pay only S2.05 from
Omaha. But If he buys goods in Chi
cago he must pay the sum of the local
rates, which is sass, and IL he buys
them in New York he must pay
$3.52." In many cases. we are told
the rate from the east is higher even
to Denver than to San Francisco, al
though Denver is 1,40O miles further
east. The Interstate Commerce COM
mission and the courts, however, have
upheld this form Of rate-making, and
as a consequence since the abatement
of determinations to individuals the
fight for favorable rates has resolved
localities to secure the advantages &C
corded to basing points or intermedi-
ate points, on the theory that special
conditions entitle such cities to- spe-
cial consideration.
The danger is that too much en-
phasis may be laid on the application
of the distance principle, which Mr..
Dunn says would be ruinous to the
very communities contending for it,
because If they secured distance rates
on in-shipments they would then have
to take distance rates on out-ship-
ments, which would practically cut
off all their remote markets. The
argument goes back to the old Ne
braska maximum rate case, in which
the supreme court laid down the doc
trine that the railroads were entitled
to rates which would permit them a
fair earning on the value of their in
vestment. But no one has ever au-
thoritatively defined what Is fair re-
turn, much less said on what capital
it should be earned or whether the re
turn should come from each separate
rate or from the traffic as a whole. |
The conclusion is, therefore, that
while many freight rates in the west
and elsewhere are unjust, the nation
has wisely clothed public tribunal
with power to correct such results of
the traffic managers poor Judgment,
unfairness or malice" But in maxi
ing the corrections the official rate
making power will still have to act |
on the same principle and take into
consideration the same things by |
which the rates have all along been |
determined in actual practice unless
the conf1guration of our whole indus
trial geography is to be revolution
lied. --
This argument seems sound the |
oretically, but, of course, does not go
to the vital question of higher or
lower levels of rates. The justice or
injustice of q rate is py comparison
with other rates, and the effort of the
railroads to boost the whole, level of
rates must be combatted, Irrespective
of the rule by which different parts of
the schedule may be adjusted.