Railway Rates: English and Foreign

by James Grierson

2. “The rates on through freight would have to be proportioned very nearly to the distance hauled. The rate from Chicago to Boston for instance, would be materially higher, and the rate from Chicago to Baltimore materially lower than the rates from Chicago to New York.

3. “Roads having the lowest grades, and most favourable alignment would have lower rates than their competitors, and would monopolise the business, to the entire exclusion of those lines which traverse more difficult and expensive territory, and upon which the cost of transportation was greater. And the tide once turned, the evil would multiply itself; for the rates would decrease rapidly on the favoured roads, with the increase of business, and would increase on the unfortunately located roads, with the decrease in volume of their freight, until the latter would be left with nothing but their local business to support them, which would then have to be advanced to the highest figures possible.”—Railroad Transportation, by E. P. Alexander, Vice-President of the Louisville and Nashville Railway Company.

[ [13] Very recently the fishermen in the North of Scotland have been asking that the same gross rates shall be charged from Wick to large towns in the South as are charged from the fishing ports, such as Grimsby, on the East Coast of England. What would they, or most consumers of fish, say to equal mileage rates?

[ [14] “We have nothing to do here with the study of the tariff systems adopted on the Alsace-Lorraine lines, and extended with some modifications to the generality of German lines. Seductive by its simplicity, the principle of fixing the rate according to the weight only, and without regard to the value of the object carried, has not found numerous partisans in France. Such a radical reform would overthrow our commercial habits, and would occasion results, in a financial point of view, which would be impossible for us to estimate.” Report of the French Commission of the Third System on Railway Tariffs, by M. Richard Waddington. (Appendix 31 to Report from the Select Committee on Railways (Rates and Fares), 1881-2, Vol. 11. p. 449).

[ [15] The rate for the carriage of flour from Minneapolis for consumption at Milwaukee or Chicago is one-third higher than the rate for flour for shipment.

[ [16] In the evidence given before the Select Committee in 1881, the rates for foreign hops from Boulogne to London were compared with the rates charged for home grown hops from the Ashford and Canterbury districts to London. The former were complained of as being an undue preference in favour of foreign produce. No doubt there was a considerable difference. The rate from Boulogne to London was 17s. 6d., and that from Ashford to London, 38s. It was, however, shewn that the rate of 17s. 6d. per ton for foreign hops from Boulogne to London was a station to station rate, while the rate of 38s. per ton from Ashford to London included delivery and all station services, and that owing to the difference in the mode of packing the hops, 73 per cent. more foreign hops than English hops could be loaded in a truck. The railway companies concerned urged that the home producer was not prejudiced by the transit rate complained of. While it enabled the railway companies to obtain the conveyance of a portion of the foreign hops, an increase of the rate from Boulogne would not be of any benefit to the English grower. The foreign hops would still find their way to London direct by sea. The rate of 17s. 6d. per ton from Boulogne to London was cancelled in deference to the complaints. What is the result? The foreign hops are imported as before; but they are now carried by the General Steam Navigation Company. The railway companies have to some extent suffered; the English producer has gained nothing.

[ [17] Lines of steamers carrying Belgian, Dutch, German, and French goods and produce, run between Antwerp, Rotterdam, Amsterdam, Boulogne, Havre and London. In competition with them the Great Eastern, South Eastern, and London Chatham and Dover Companies carry viâ Harwich, Folkestone and Dover respectively, at such rates as they can obtain in competition with those charged by steamer direct. It has been a subject of complaint that these goods are conveyed at lower rates than similar merchandise from places in Essex or Kent, past which they are carried by rail. No doubt the regular and quick services provided by the railway companies are of great advantage to the senders and consumers. But so far as London is concerned, a great part, if not the whole of the goods, not requiring quick transit could be sent by sea direct, if the Harwich, Dover, and other services were discontinued.

There are import rates to towns in the interior to which there is no direct sea competition. If such rates are not based on the rates to places to which there is such competition, plus the local rates, they may be open to question to an extent not applicable to the rates to and from ports.

[ [18] Many of the rates from Hull are affected by inland water competition, or by those charged from Liverpool. On the other hand, the rates from Hull govern those from Grimsby (as a competing port), Harwich, West Hartlepool, Newcastle, Sunderland and Shields. In fact, a large portion of the anomalies in railway rates arise from the competition between ports. Although improvements in detail as to such rates, no doubt, are possible, the interests of some ports would be seriously affected by any change in the principle on which railway rates are fixed.

[ [19] See as to this Dr. Otto Michaelis’s Differenzialtarife der Eisenbahnen, in which the natural and necessary rise of differential rates in Germany is explained.