Reductions in Transcontinental Rail Rates to January, 1894
| Article | Old Rate per 100 pounds | New Rate per 100 pounds | Reduction per cent | ||||
| Beans | $ | 1.10 | $ | .50 | 55 | ||
| Canned goods | 1.00 | .50 | 50 | ||||
| Barley | .90 | .30 | 66 | ⅔ | |||
| Dried fruits, raisins, and prunes (in boxes) | 1.40 | 1.00 | 28 | ||||
| Wine | 1.50 | .37½ | 80 | ||||
| Mustard seed | 1.10 | .30 | 73 | ||||
| Wool, in grease | 1.50 | .75 | 50 | ||||
| Wool, scoured | 2.50 | .75 | 70 | ||||
Uncertain Benefit
On westbound freight it was estimated that the reductions amounted to at least 50 per cent. These estimates, however, do not distinguish between the results produced by the Navigation Company and those which were the consequence of the operation of the clipper ships—perhaps no separate estimate is possible or important. On the basis of the rates charged, the railroad admitted that it was losing money, at least so far as eastbound freight was concerned. It maintained, however, that it continued to make a profit on its westbound freight and on its local traffic.[449] There was no question that the steamships and the Panama Railroad lost money, although they declared stoutly that they would meet any cuts which the railroads might make.[450]
Whether the shippers benefited by the general demoralization in rates which occurred during the war is uncertain, as it always is under such circumstances. They certainly lost the $300,000 which they put into the North American Navigation Company, besides the guaranty fund subscribed by the Merchants’ Shipping Association. Moreover, they suffered from the competition of eastern jobbers during the hostilities, a competition which the railroads encouraged by reducing the differences between carload and less than carload rates, by the extension of the privilege of shipping in mixed carloads, and by reduction in westbound rates. On the other hand, they gained directly through lower rates, and indirectly by the demonstration that, to some extent at least, their access to eastern markets was not subject to railroad control.
New Transcontinental Tariff
The North American Navigation Company operated only a little over a year, as has been said. Its vessels, however, were taken over by the Panama Railroad, and competition continued until the end of the year 1895. Not long after that, it seems, negotiations between the shippers and the railroads began. Representatives of the transcontinental lines upon the coast were instructed to mollify Pacific Coast shippers so far as possible, and the shippers in their turn seem to have been anxious to meet this advance. In 1897 a communication was addressed to the railways by the jobbing interests upon the Pacific Coast, stating in substance that rates ought to be readjusted in the interests of the coast jobbers; that more rigid inspection rules should be enforced preventing their competitors in the Middle West from obtaining fraudulent rates; and intimating that if this was done they would not object to an advance in rates and would find it to their interest to place shipments largely with the railroads.
For the purpose of effecting some arrangement, a meeting of representatives of the transcontinental lines was held at Del Monte in the fall of that year. Representatives of the Pacific Coast jobbers and also of the jobbers of the Middle West were present. Both parties were heard separately and much discussion was had but no definite conclusion reached. The conference adjourned to meet at Milwaukee the following spring. The final result was a new transcontinental tariff effective June 25, 1898, which seems to have given reasonable satisfaction until attacked by representatives of the intermountain towns.[451]