, 1922-11-28
RATE SITUATION DISCUSSED BY
EXPERT BEFORE FORUM MEETING

state. lying west OF Lake Nfiehlran
and the Mississippi river. Rate ad-
lustnents within this territory con-
form generally 20 distance but he
scheme differs somewha from that
prevailing in Official Classification
territory in that extensive use il made
OF he "group" principle and OF fix
Ing the dsfferentiais between groups
by using fixed amounts in cents per
100 pounds instead OF adopting a per
centage plan Illustrative OF his Is
the Mississippi river crossings group
under which Mississippi river points.
ST Louis 10 Dubuque. and in some
instances ST. Louis to st. Paul. takes
the n rate TO western points. also
Missouri river points. Kansas City to
Sioux city. are likewise on
western business. Grouping OF this
character are brought about by COM
petitive conditions. the carriers on.
Grating from one crossing being
forced to maintain the same rates rs
apply from the other crossing IN order
tnFt there be a parity OF rates on
through traffic from the east and the
approximate equality OF mileage from
these crossings supports this prinei.
pie. The Colorado Common Point
group extending from Cheyenne TO
Clayton. New Mexico. is another In.
stance Of grouping. as is tie Utah
common point group consisting OF
Ogden. Salt Lake and a few other
points in that vicinity. Groupings.
however, are neither constant nor uni.
form. They change from time 10
time IN response TO commercial con.
ditions and they vary in their extent
on different Hines OF traffic. Taking
the st. Louis or Mississippi river
crossing group as an example, on
traffic TO or from Missouri river
points II extends from ST. Louis TO
Dubuque; on traffic to or from Colo.
RADIO and Utah points It extends from
st. Louis to st. Paul: on traffic 70
or from southwestern territory IL OK.
tends from st. Louis 10 New Orleans
and on traffic to or from the Pacific
coast IL extends from st. Paul 10 New
Orleans. the general rule being the
longer the distance the larger the
group.
The differentials used in determln.
Ing the relative rates from different
groups were based upon distance and
upon tbs rates from the east into the
different groups. the underlying prln.
ciple being that the combination Of
rates in and out OF all groups should
be the same as far rs practicable"
"one OF our rate structures which
Is in a class by itself and presents
some very interesting features is that
OF Transcontinentai Rates to and
from the Pacific Coast. Originally
rail rates to and from :he Pacific
coast did not extend east of Chicago.
that city being the most easterly ter.
minus of any line that reached Pa.
ciflc a cities. However. the de-
sire OF the carriers to participate in
tho very heavy volume of tonnage
that moved between the Pacific coast
md Atlantic seaboard cities caused
the establishment OF through rates
between the Pacific coast ano such
Atlantic seaboard cities as had steam.
err service to and from the Pacific.
The process did not stop here very
long as the low water rates from
coast TO coast when combined with
rail rates from interior points to the
coast frequently produced much low.
er than the through all rail rates and
FN'iiNAbAhg AOIItd INT CFTTleFS 10 GS.
tablish through rates all rail between
all points east OF Chicago and Pacific
coast points. When first established
the rates to and from interior cities
were higher Than to and from the
coast points, for instance. the rate
from Buffalo or Chicago to San Fran.
cosco might be higher than from
New York to San Francisco and the
a from New York to Spokane
might be higher than the rate from
New York to San Francisco. 1t was
not long, however, before the pres.
sure of competition in the eastern
territory forced an adjustment under
which the rates between that terri.
tory and Pacific coast points were
not only put down to the New York
basis but were ever scaled under that
basis. The carriers then proceeded
to group all OF the territory east OF
the Rocky Mountains into nine
groups for rate making purposes on
Trans-C Continental traffic. Group A
comprised the territory east OF Buff
talo and Pittsburgh: group B, a small
section including Buffalo. P~ittsburg,
and vicinity: group C, the territory
between Buffalo-Pittsburg and the
Indiana Illinois state line; group d,
Chicago and points east of Mississ.
ippi river; group Z. St Louis and
points east of Missouri river: group F,
Kansas City and Missouri river
points; group G, interior Kansas and
Nebraska; group H. Oklahoma. Texas
etc, and group ]. Denver. Cheyenne
etc. The rates between each GROUP
an dthe Pacific coast were each made
a differential under the group i'm
mediately east of it. At the western
end, however, the carriers for many
| years made the rates at the Pacific
coast points lower than at the inter
Tor points: in fact, the customary ba'
| sis was 20 make the rate to the inter-
Tor point the sum OF the rate to the
| coast point plus the rate back from
the coast point to the interior point
| For instance. the rate from New
! York 20 Sacramento. Cal. would, be