Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1921-06-04
Maine Central Traffic
Policies Injurino Industry

Many interested in the present rail-
road situation in Maine and in the
Maine Central Railroad particularly,
especially stockholders and manu-
facturers, when discussing a previous
article by the writer briefly suggest
ing few reasons why the Maine
Central Railroad does not earn divt-
dends. seem fearful of the Roads
ability to earn sufficient for its needs
without overburdening the economic
power of the territory it serves. The
manufacturer argues that rates are
already so high they are retarding
business recovery and extension and
to raise them further would increase
his difficulties. Under existing meth
DDS this reasoning is correct. Every
increase during the last seven yea
has abnormally and unnece ssarily in
creased his difficulties. 1t is not al
together the amount added to rates
that has caused the trouble but the
discriminatory method employed in
making these increases that has i'm
posed the burden now so hard to
carry.
To increase the rates of one manu-
factufer and not to increase those of
his competitors is serious matter
for the victim, while to increase the
rates of the manufacturer already
paying the highest rate and not to
increase those of his competitors
paving lower rates is the maximum
injury that could be inflicted. In
substance the latter is just what has
been done to the manufacturers in
Maine. They are farthest from both
markets and raw materials and
naturally were paying the highest
rates before any general increases
We're made. BY the percentage meth
Cd used every different rate is in
creased different amount. the high
er the rate the greater the increase
Take the last increase of 400 for
illustration, ten cent rate is in
creased four cents, while a fifty cent
rate is increased twenty cents. net
difference in the increase of sixteen
cents. The net results in the new re-
lationship being equivalent to an in
crease of sixteen cents to the fifty
cent rate with no increase to the ten
cent rate.
If two manufacturers are seeking
the same market and both paving
the same rate. no matter how high
or low it may be, they are both upon
the same basis of transportation cost.
Increase both rates the same amount.
no matter how large or small that
amount and they are still on the 81 me
competitive basis of transportation
cost, no advantage to either over the
other. If one pays a higher rate than
the other. he is at disadvantage
and must somehow overcome that
disadvantage in the cost of manu-
featuring to successfully meet the
selling prices of his competitor This
we Will assume he had been able to
do just as the manufacturers in
Maine had done before these general
percentage increases began to be
made. Increase both of these differ
ent rates by the same amount no
matter how much or little that
amount and there is no change in
their relationship. the manufacturer
paying the higher rate being in the
same relative position as regards
transportation costs But when the
one already paying the higher rate
has larger amount added than is
added to the lower rate his COMPETE
tor pays. then his burden or handi-
cap is increased. since the larger the
difference in rates the greater the
amount that must be som, how over
come in the cost of production.
Thus it will be seen that the re-
lationship of rates is very, important
to the manufacturer perhaps even
more important than the rate itself.
Maine manufacturers of tetiles. shoes
and paper must bring their coal or
fuel oil, cotton. wool. leather. or
hides, sulphur and other chemicals.
from distant sources of supply. and
find their largest markets beyond
the borders Of the State, even be-
yond the borders of New England.
When rates were originally made for
the Maine mills they hG6 to be high
er on both raw materials and