Transcontinental Traffic Stimulated
Special contracts seem to have been a distinct success from the point of view of the western carriers. When they were introduced the percentage of transcontinental freight carried by the rail lines was small, probably not over 25 per cent of the whole. At the end of six years under the new system this percentage had risen to between 60 and 75 per cent.[381] The change was certainly not entirely due to the policy of special contracts, but part of the change may be attributed to the plan.
The policy was nevertheless given up in 1884 owing to the refusal of the eastern trunk lines to take any further part in it. According to Mr. Stubbs, the eastern companies believed that the advantage of the system hardly paid them for the confusion in their accounts incident to this method of conducting business. Moreover, there was legitimate apprehension lest the contracts provoke antagonistic legislation at Washington. Mr. Stubbs tried to argue the question, but without success.[382]
CHAPTER XV
LOCAL RATES IN CALIFORNIA
Charging What the Traffic Will Bear
The general policy of the associates in dealing with problems of rate-making in which rival towns were interested, was the same as that which they adopted to meet differences in competitive power between different individuals. The tests applied were simple. What was the market to be reached? Had the community concerned an alternative route? Was there an alternative source of supply which limited the willingness of the community to pay freight? If so, was this second source of supply one served by the Central Pacific, or one which had the benefit of water communication, or possibly one which possessed a rival rail connection? To what extent should concession be made from the highest rate which could be charged, in order to promote the growth of business?[383]