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while recognizing the importance of affording the greatest possible facili. ties to their respective terminal cities, are coming to realize the fact that the interests of the transporter may best be subserved by interfering as little as possible with the natural course of commerce. The merchants also realize the fact that their interests may best be subserved by conducting their business without any special reference to the interests of the transporter. Commerce can only be prosperous so long as it is free. It can never be bound to the car-wheel of any railroad company. Its course, its limits, and all the forces which control its movements are of a different character from those which surround the managers of transportation-lines. The economies, and the considerations which govern men in trade, not only differ from, but are oftentimes opposed to, those which shape the judgment and form the policy of the managers of railroads. No commercial city can become so wedded to any one or more transportation-lines that it can afford to neglect commerce which would naturally come to it from other lines than the one upon which its prosperity mainly depends, nor, on the other hand, can a railroad company refuse to allow traffic to pass over its line, or over a part of its line, even if such traffic should afterward be diverted to another market than the one with which its interests are most closely identified.
In many important features, the interests of transportation and of trade are correlative, yet there are certain incompatibilities of interest which forbid that they should be very closely joined together. Many years ago the city of Baltimore held a very much larger proportion of the stock of the Baltimore and Ohio Railroad than at the present time, and the city directors, in connection with the State directors, controlled the policy of the road. But the road did not prosper. Subsequently a change took place in its management, and the road has ever since been conducted upon the strictly business principle of making its interests paramount to all other considerations in the conduct of its affairs. Traffic of all kinds has been secured, without regard to source or destination, and the road has become in the largest sense a commercial highway. The adoption of this line of policy not only rescued the road from stagnation and apprehended disaster, but it has been the means of greatly advancing the interests of Baltimore and of establishing her commercial independence. Experience proves that attempts by common carriers to control commercial movements are against public policy, and that such attempts create popular discontent and ultimately lead to disaster.
In practice many curious and perplexing questions arise as to the relative rates which shall prevail between the West and the several rival Atlantic seaports. A single illustration will suffice upon this point. When a war of rates is begun at New York, it becomes necessary for the Baltimore and Ohio Railroad to reduce its rates to and from New York in order to be able to secure a share of western traffic to and from that point. If, at the same time, upon its much more important traffic between the West and the city of Baltimore rates are maintained, it is evident that a discrimination would arise as against the interests of the city of Baltimore and in favor of New York, and this discrimination might go to the extent of carrying freights to and from New York through the city of Baltimore for less than the rates to Baltimore. It then becomes a nice question of expediency with the railroad company as to wbether they should reduce their rates on their main traffic to the city of Baltimore, in order to meet the rates on their comparatively small traffic to the city of New York-rates which have been reduced upon compulsion, and as the result of a struggle between other roads.
A very important question also arises with respect to the interests of the city of Baltimore, as to whether its most important avenue of commerce with the West should be allowed to discriminate against it in the interest of a rival seaport. It may be added that, even if the Balti. more and Ohio Railroad were to pursue the policy of attempting to conform its through rates at all times to the rates to and from other seaports, such changes might create other discriminations, and it might therefore prove to be expedient, even in the light of the interests of the city of Baltimore, for the Baltimore and Ohio Railroad to maintain its normal freight-charges rather than encourage those capricious fluctuations which are detrimental to the interests of commerce. Questions of this character belong to the details of railway management. The determination of each case depends upon the circumstances surrounding it, and upon the views with respect to the relations of the railroads to the public which may from time to time prevail.
The interests of the seaboard cities are sometimes apparently at vari. ance with the interests of the trunk lines.—There are circumstances involved in the adjustment of competitive rates between the West and the seaboard which relate especially to the interests of the markets and to the various industrial enterprises of rival seaports. Traffic which is apparently local with respect to the trunk lines may be in a marked degree competitive with respect to the interests of these cities. This may be illustrated as follows: A firm in New York City engaged in the manufacture and sale of linseed-oil receives large quantities of lin. seed from the West. Shipments to them necessarily come direct from the point of production, and the trunk lines to other cities are not regarded as competitors for this traffic. In the current phrase of managers of railroad traffic, such shipments are considered to be “local to New York." There is also a firm in Baltimore engaged in the same business and also receiving linseed from the West, the rail-rates on this commodity being 13 per cent. less than the rates to New York. The transportation of linseed to this firm by the Baltimore and Ohio Railroad is also considered to be local to that road, since it is shipped for the purpose of meeting a local demand at the city of Baltimore. Nevertheless, this traffic is competitive with respect to the interests of the two cities. Twothirds of the weight of the product of linseed when crushed is oil-cake, a prominent article of export. Oil-cake is a commodity of low value in proportion to its weight, (being worth only about $42 per ton,) and therefore the difference of 13 per cent. in rail-rates to Baltimore causes a dis. crimination in favor of the manufacturer at that city, so far as relates to the exportation of oil-cake to Europe, for, as we have already seen, the transportation of the products of the West to Europe is in the highest degree "competitive traffic," since the facilities of rail and steamship lines exist at each of the great Atlantic seaports. Linseed-oil is also shipped both by the Baltimore and the New York manufacturers to all parts of the United States, and it is also exported to foreign countries. The linseed-oil trade is therefore in a high degree competitive with respect to the manufacturing and commercial interests of the two cities. Many other illustrations might be given of traffic apparently local with respect to the interests of the trunk lines, but competitive with respect to the interests of the Atlantic seaports.
It may be stated, generally, that the transportation of all classes of raw material from the West to be manufactured or advanced in the process of manufacture at two or more of the Atlantic seaports, while it may be considered to be local or non-competitive with respect to the roads, is competitive with respect to the interests of the cities.
The competitive elements of transportation and of trade present themselves under various phases and give rise to a great variety of practical questions in attempts to adjust traffic between roads or the course of trade as between rival cities.
The control exercised by the great trunk railroad companies over their competitive traffic is from year to year growing weaker, and the local or non-competitive traffic is continually being invaded by the increasing influence of the various elements of competition. There is a constant demand for the construction of branch roads cutting across existing trunk roads, and forming new competing lines. These branch roads in some cases eventually form parts of great trunk lines between different sections of the country. Results of a similar character have followed the construction of branch lines by the departments and communes of France. So long as the lateral lines are confined to local traffic, they usually pursue a policy of neutrality in so far as it may be practicable for them to do so, but in reality every new railroad is a competitor of all other roads through the development of new sources of supply to the various markets of the country.
FACTS INDICATING THE PRESENT COURSE OF TRADE BETWEEN THE
WEST AND BOSTON, NEW YORK, PHILADELPHIA, AND BALTI. MORE.
Let us now turn to the consideration of some of the facts which serve to illustrate the present course of trade between the West and the Atlantic seaboard.
It must be stated at the outset that there is a lack of statisti.
cal and other exact information requisite for a thorough development of this subject. It is necessary, therefore, to resort to certain lines of characteristic data. Valuable information of this kind is afforded by the statistics of the movements of the cereal products of the West. These statistics have been carefully compiled by various trade organizations.
The transportation of grain and flour from the West to the seaboard probably constitutes a little more than one-half the entire east-bound through traffic from the Western States to the seaboard. Comparative statements based upon the movements of grain afford, therefore, an excellent illustration of the general movements of trade. The receipts of grain of all kinds (including flour) at Boston, New York, Philadelphia, and Baltimore during the calendar years 1873, 1874, 1875, and 1876 were as follows:
Comparing the receipts at each one of these ports during the year 1873 with the receipts during 1876, there appears to have been a gain in the total receipts of grain at each port, as follows:
The increased receipts at Boston were nearly 30 per cent. greater than at New York. The increased receipts at Philadelphia were nearly three times those at New York, and the increased receipts at Baltimore were Dearly five times the increase at New York. The percentage of in. crease of the receipts at each port during the year 1876 over the recsipts at the same ports during 1873, exhibits the growth of the grain trade at each port in a more striking manner. The increase at Boston was 28 per cent., at New York 4 per cent., at Philadelphia 43 per cent., and at Baltimore 97 per cent. The exports of grain at the sereral ports mentioned were as follows :
Comparing the data embraced in the statement of exports with the statement of receipts, it will be seen very clearly that the diversion of grain from New York to other points is due largely to the export-trade, and not in any very considerable degree to increased local consumption or distribution to points in the United States. This is shown by the following statement:
Making due allowance for the fluctuations in the movements of com. merce, it is evident that the competition of the seaports mentioned in the grain-trade relates mainly to the exportation of grain to foreign countries.
Grain being the chief commodity now relied upon for export cargoes of vessels, it is evident that any great and permanent increase in the grain-trade of any port must naturally lead to an increase of imports at that port, and thus to a general diversion of commerce. On pages 253 and 254 of the Appendix may be found a table showing the receipts, exports, and local consumption of flour and grain of all kinds at Boston, New York, Philadelphia, and Baltimore during the years 1873, 1874, 1875, and 1876, compiled from statistics prepared by Theo. F. Lees, general agent of the New York Cheap-Transportation Association. By a careful inspection of this table it will be seen that the diversion of grain which has been described is almost entirely due to the diversion of corn alone. There has been no very marked change in the relative receipts and exports of wheat and wheat-flour at these ports since the year 1873, as appears from the following tables : Statement showing the receipts of wheat and wheat-flour (flour reduced to bushels) at Boston,
New York, Philadelphia, and Baltimore during the years from 1873 to 1876, inclusive, and the percentage of such receipts at each port.
1873 1874 1875 1876.
9, 957, 107 10, 814, 452 9, 224, 969 9,629, 692
12 52, 194, 366
9, 346, 000 12, 479, 880 13, 501, 750 9, 550, 035
12 9, 373, 677
10, 693, 264
11 14 13