The Industrial Commission found that merchandise for export went from Chicago to New York at 80 percent of the ordinary transportation rates, and grain from Kansas City to Chicago took 3 cents a hundred lower rate if billed for export than if intended for local consumption.[[331]] The export rate on wheat from Chicago to New York is 15 cents, the domestic rate 20 cents; from Kansas City to Galveston the export rate is 17 cents against a domestic rate of 33½ cents.[[332]]
Another recent investigation shows that wheat from Kansas City to Galveston was paying 27 cents if for domestic use, against 10 cents if intended for export. The rates fluctuate, but if the domestic rate flies low the foreign rate flies lower still.
The price of grain in Liverpool is determined by world competition; the railroads cut rates so that our grain can be sold in Liverpool. They get a little more than the cost of hauling and are satisfied.
When oil is selling at 9 cents a gallon here it can be bought at 3 cents for shipment to Europe.
Railroads often give manufacturers a reduction of 33⅓ percent for export, and manufacturers sell at 30 percent less for export. Mr. Bacon told the Senate Committee (1905) that the export rates from all inland points to the seaboard have been for years 25 to 33 percent below the rates on goods for domestic use.[[333]]
The rate on rails from Pittsburg to Hongkong via San Francisco is only 60 cents per hundred, or less than the rate between points a few hundred miles apart in this country.
“For the past two years the trunk lines have given the steel and iron producers a reduction of 33⅓ percent less than the published tariff on domestic freights, so that all iron and steel exported is carried at one-third less than the people of this country are required to pay on freight of the same character.”[[334]]
American steel has sold at Belfast for $24 a ton, while purchasers in this country had to pay $32 a ton at Pittsburg for the same steel.[[335]] American rails sell for $28 a ton for home use, but for foreign use they can be bought in New York for $19 a ton and delivered in Beirut for $22.88. Last year Mr. Wright, general manager of the Macon and Savannah Railroad, stated that his road had to pay $29 a ton for 5,618 tons of steel rails, although the same steel company offered him rails for Honduras at $20 loaded on vessels chartered to a foreign port.[[336]] During the last three or four years, while the home price has been $28, the price for export has been $5 to $12 below the home price, and during the period 1902–1904 the difference has been $8 to $12. The Great Northern and the Northern Pacific pay $28 a ton for rails, while their competitor, the Canadian Pacific, buys the same rails for $20 a ton and sometimes for $18 a ton.[[337]] Even the United States Government could not get fair prices at home for the materials and supplies needed for the Panama Canal project, and found it necessary to open the competition to foreign bids. Even if it were determined to use only American goods they could be bought more cheaply abroad than at home. Matters are arranged so that goods are hauled across the ocean to Europe and then hauled back and sold here at lower prices than they could be bought for at the factory here for home use. If the railways and the steamboats and the allied interests make money they do not care how much industrial power is wasted.
An investigation last year brought out the interesting fact that the cheapest way sometimes to get goods from Chicago to San Francisco is to ship from Chicago across the Pacific Ocean and then back to California. The Interstate Commission says: “The complainant desired to ship the machinery for a stamp mill from Chicago to China. Being interested in a line of steamships between San Francisco and the East, his intention was to make shipment to San Francisco and thus to destination by his own line. Upon investigation, however, he learned that the rate from Chicago to San Francisco was $1.25 per hundred lbs., while from Chicago to Shanghai it was 90 cents per hundred lbs. The rate at that time from Shanghai to San Francisco was 20 cents per hundred lbs. Had he desired to lay down his stamp mill at San Francisco, he could have shipped it to Shanghai, and from Shanghai back for 15 cents per hundred lbs. less than the direct rate from Chicago to San Francisco.”[[338]]
President Tuttle of the Boston and Maine tells of a cargo of flour carried from the Pacific Coast around the Horn to England and then back to Boston to be delivered to a starch factory at Watertown. “A sailing vessel had gone to the Pacific coast with goods from Europe. There was some lack of a cargo for return. They found a lot of soft wheat flour there with which they loaded that vessel and carried it to Liverpool and put it in storage. Then the owner of the flour began to hunt around the world for a market, and found that within ten miles of Boston he could sell that flour to a starch factory at a profit and pay for the additional land haul of 10 miles.”