The difficulty of conforming carload minima upon light and bulky articles to those on heavier goods has appeared with each attempt to standardize equipment. Widely divergent rules in the three main classification territories still cause great confusion in this regard. There is a constant temptation to construct extra long or wide cars, particularly in the western states, in order to assist the manufacturers of such light and bulky products as furniture and agricultural machinery in their competition with dealers in the East, shipping under Official Classification requirements. In other words, the penalty carried under the rules as to minimum carloads, for the use of cars larger than the standard, has been much less in the West than in the East and South. The situation has been further complicated in some instances by the arbitrary action of state railway commissions. The experience in this regard is illuminating, as again showing the extreme delicacy of adjustment in such matters under the stress of commercial competition. The short-line distance between the Missouri and Mississippi rivers lies entirely within the state of Missouri. It governs, as we have already seen,[370] the entire rate structure in this part of the country. This commonwealth some years ago by law fixed a carload minimum of 20,000 pounds for furniture, agricultural implements and wagons.[371] As it is not practicable to attain this minimum load on an ordinary standard car, the Missouri shipper was stimulated to demand larger equipment in order that he might avail himself of the lower rate for carload lots. The local railways, accordingly, built such cars, which, of course, travelled far beyond the limits of this single commonwealth. This forced other western roads, in order to protect their clients in the same markets, to adopt a similar policy. The result is that extra large equipment is relatively more common throughout this territory; thereby conferring a distinct advantage over their eastern competitors upon western shippers of such light and bulky freight. In pursuance of this same protective policy, the western roads have also enforced distinctly favorable rules as to carload lots applied to several small cars instead of one large one.[372] These troublesome details are given in the hope that they may show how far the ramification of trade competition extends. They re-enforce the conviction that any reform of classification is a matter of extreme difficulty; and, if undertaken at all, must be done under governmental compulsion and by a single universal reform, rather than by any attempt at piecemeal improvement.
Next to ability to load and carry, as a determinant factor in fixing minimum carload weights, the consuming capacity of the market must be considered. A reasonable minimum carload in the East might well be unfair in the West or South. An old-established factory in New England might satisfactorily use a quantity of raw material which in a carload lot would overwhelm a western or southern plant. Thus it comes about that minimum weights on the same goods quite properly vary widely in different territories; being higher in the East than in the West, and least of all in the South. The problem, therefore, of standardizing carload rates throughout the country, unfortunately becomes exceedingly difficult. A compromise will fail to satisfy anybody; and, moreover, such a change of minimum carload weights at once necessitates a remodelling of the particular distance tariff to which it applies. This point was well illustrated in a recent case.[373] A railway accepted for the same carriage at different times two carload shipments of lime from a given concern. On the one, a rate of thirty-four cents per one hundred pounds was based upon a minimum carload weight of 24,000 pounds. On the other twenty-nine cents was assessed upon a minimum of 30,000 pounds. The carrier alleged that these differences in rates per pound were entirely compatible in view of the difference in carload minima. It then appeared that these minima, especially with a perishable commodity like lime, varied considerably according to destination. Large distributing centres were given low rates on high minima, while small towns, consuming relatively less, were best served by a lower carload minimum to which a higher rate per pound was applied. In other words, the close interrelation between the rate and the minimum was a matter of great commercial importance.
The relation of carloads to consuming capacity of the market is an element in the trade policy of protection to clients extended by the railway. The difficulty of properly relating rates upon raw and finished products has already been discussed. Carload minima must also be considered in this connection. Why should 50,000 pounds be prescribed as the carload limit on corn to Texas points, when the limit on corn-meal is only 30,000 pounds? Evidently differences in loading capacity are inadequate as an explanation. Nor can this be accounted for on the ground of any difference in mere cost of carriage. The explanation is purely commercial—springing from the competition between northern mills and mills located in Texas, both making use of raw material from the same fields. A heavy carload minimum is entirely practicable on corn for the Texas miller; but an equally heavy carload requirement on corn-meal would shut out the northern miller entirely from many local points. For the market at these small places is, of course, relatively restricted.[374] There can be no doubt that every feature of classification, even down to the last minute details of carload minima, stands in such intimate relation to commercial competition, that to disturb it in one regard may entail the most far-reaching consequences.
Ever since 1888 the constantly increasing elaboration of the three main classifications in force, with all the resulting inconsistencies and overlappings, has led to a persistent demand for the introduction of a single uniform classification for the entire country. Soon after the passage of the original Act to Regulate Commerce in 1887, a resolution passed the House of Representatives directing the prescription of such a classification. Apparently the Interstate Commerce Commission was fully alive to the difficulties of such an undertaking. The railways were induced to move in the matter, but to no purpose.[375] This first abortive attempt reflected the mutual jealousies of competing roads, as well as the difficulties of suiting a single classification to the variety of local conditions existing throughout the country. All that was done was the recommendation of a "Board of Uniform Freight Classification," comprising two members from each of the important territorial bodies and including both the Mexican and Canadian carriers. Changes were to be made by a two-thirds vote. Jurisdiction over the tripartite division of territory, east, south and west, was to be assigned to district chairmen. Final authority for the country at large was to be vested solely in the whole board. The absolute refusal of the New York Central & Hudson River to accede to this plan prevented its acceptance. Apparently too many special or commodity rates were in force upon its line, in order to hold its powerful clients in markets all over the country, to make it practicable to adopt the scheme. Efforts toward uniformity were renewed in 1890, confined this time, however, to an attempt to merge the Official and Western Classifications. But the same jealous regard of local interests in each territory, especially with reference to the treatment of carload ratings, once more proved an insuperable obstacle. The trunk lines insisted upon such specially low charges on small shipments as would enable manufacturers and jobbers in the East to hold their markets in remote districts in competition with rivals in the Middle West. The issue raised in the New York Board of Trade case, previously discussed, led to the defeat of this plan.
A notable revival of interest in uniform classification under governmental authority has taken place since the enactment of the Mann-Elkins amendments to the Interstate Commerce Law in 1910. An independent bill in Congress to authorize the enforcement of such a schedule failed. The railways were stimulated, however, to make a further attempt to solve the difficulty.[376] Protracted sessions during 1907-1908 by a conference of five representatives from different parts of the country, known as the Uniform Classification Committee, led to many concessions and compromises in favor of harmony. The committee expressed its belief that a uniform classification could be drawn up in time; but it emphasized the important point that all changes in classification must be accompanied by such advances or reductions in the distance tariffs as to insure the prevailing commercial adjustments.
The latest advertisement of the difficulties of uniform classification took place in connection with the attempted introduction in 1912 of various amendments and reforms proposed by this Uniform Classification Committee.[377] Acting in conjunction with the National Association of Railway Commissioners, an earnest attempt seems to have been made to eliminate differences between the three great schedules. Few articles were actually shifted from one class to another, the effort being concentrated upon the establishment of more uniform rules and descriptions. It was alleged by shippers that more often than otherwise, these changes had brought about an advance rather than a reduction of charges. It is difficult to decide as to this. But it is clear that progress in the direction of uniformity is taking place. For example, the minimum carload weight for paper, once varying greatly in different parts of the country, was fixed at an intermediate figure which fairly satisfied conflicting interests. Many opportunities for personal discrimination were also eradicated. Grading according to value, for instance, has in the past been a prolific source of abuse. Candy at less than fifteen cents a pound rated third class, but if of higher value moving on first-class rates, offered an incentive to false declaration on the part of unscrupulous shippers which was very properly eliminated. Abolition of the distinction between finished stationery and flat paper, put an end to possible underclassification in the same way. Naturally the carriers in abolishing such fine distinctions, grade upward rather than downward. Much objection was also made at this time to beneficial modification of the rules for mixed carload shipments. Binder twine had for years been classified with ploughs and harvesters rather than with ropes and cordage. Half a carload of agricultural machinery, therefore, with half a carload of twine, formerly moving under carload rates, was no longer, as proposed, to be allowed the privilege of mixing. Similarly, abolition of the right to bunch wood-working and iron-working machinery naturally aroused protest. Such details are here offered, not because of their intrinsic importance, but as illustrating the opposition on behalf of shippers to any movement toward uniformity, even in these minor details. What the force of this opposition would become, were propositions advanced for shifting thousands of articles bodily from one class to another, may be readily imagined. The experience thus far obtained, emphasizes the point that any considerable improvement must be carried through, if at all, by direct pressure from governmental authority, not upon the carriers alone but upon the shippers as well.
The degree of complexity at the present day incident to overlapping and conflicting jurisdiction of the several state and railway classification committees and associations, may be best described by means of a few examples.[378] Traffic originating in Southeastern Freight Association territory, except Florida, destined to cities in trunk line territory is governed by the Southern Classification all the way if moving on through rates; if on local rates, the Official Classification applies north of the Ohio river. From "Green Line territory"[379] to Pacific coast terminals, the Southern Classification governs to the Mississippi or other gateways; the Western Classification beyond. But if it originate in Louisiana or Mississippi, the Western Classification governs all the way. From most places in Tennessee, Western Classification rules govern all the way, "subject to commodity rates or less-than-carload consignments, classified not lower than fourth class." To Wisconsin from points throughout the South, the Southern Classification governs all the way. But to Minnesota, generally, Southern rules govern to the Ohio river crossing, while Western rules apply to the balance of the trip; unless the goods move through trunk line territory by way of the Virginia gateways, in which case the Official Classification is effective. These are only a few samples chosen from a large collection. Is it any wonder that to the uninitiated, rate making under such conditions appears to be almost a superhuman task; and is it surprising that to the unscrupulous, such complicated conditions give rise to more or less successful attempts at evasion of published rates?
The present threefold territorial division of the country, for the purposes of classification, naturally affords all sorts of possibilities in the way of veiled discrimination, not merely as between persons but as affecting the interests of different competing markets. Not only is there liability to confusion, but the way is paved for all sorts of favoritism. Wherever shipment is made from one classification territory to another, it is always possible to adjust the rates with a view to local advantage. For instance, one of the principal causes of complaint in the South is the advantage which Nashville, Tennessee, enjoys through having all of its rates from eastern and northern centres made upon the Official Classification. Inasmuch as the rates under the Southern Classification are considerably higher, this operates to place other competing cities in the South under a distinct disability in competition with Nashville. It is possible, therefore, for the Louisville & Nashville by this means to build up one community at the expense of another. The same device gives Richmond, Norfolk and the other Virginian cities a great advantage over their competitors.[380] Again, rates from New York to Memphis and New Orleans are made upon the Official Classification, by whatever route; while to intermediate points, such as Vicksburg, Natchez, and Baton Rouge, they go on the rates prescribed by the Southern Classification, which are considerably higher. From New York to St. Paul through Chicago, shipments are made on the low rate basis of the Official Classification; while from Chicago to St. Paul they go under the Western Classification. From Birmingham, Alabama, to St. Paul, the rates as far as Chicago are based upon the Southern schedule, and from thence on under the Western. From San Francisco to St. Paul, the Western Classification prevails, unless the freight is carried under the commodity rates of the Transcontinental schedule. The peculiar situation of Nashville on shipments from the Northeast has already been stated. This immediately complicates the rates from so-called Cook County Junctions—that is to say, from Chicago territory. All consignments for the entire distance are governed by the Southern Classification. This, in face of the low Official Classification rates from trunk line territory, operates as a discrimination against Chicago. Even more complicated still are the combinations by which rates are made from local points in the North into the Far Southwest. And still farther complexity results from the existence, as already mentioned, in several parts of the country, such as Iowa, Illinois, Georgia, etc., of state classifications, prescribed by the railway commissions. These, to be sure, are intended for application only to local rates. But by this means, the jobbing interests of the localities are protected, without at the same time giving consideration to an equitable adjustment as between all the remoter interests concerned.[381] One of the primary advantages, therefore, from the unification of the three systems now existing, would be the possibility of readjusting not only definitely, but also equitably, the conflicting interests of various shippers and communities now tied up by these local arrangements.
A recent case[382] illustrates the bearing of classification rules upon competition in trade as between rival cities. Chicago and most of the Ohio river gateways enjoy a so-called "two-for-one-rule," permitting the application of carload rates on part carloads in excess of full car ladings. The complaint alleged that the denial of this privilege to Indianapolis, whereby less-than-carload rates were charged on excess fractional carloads, unjustly discriminated against this city in the transportation of various light and bulky articles, such as vehicles and furniture, in competition for trade throughout the Southwest. The difficulty arose from a conflict between rules in the Western Classification and the Southwestern Tariff Committee, the latter being a subordinate body having jurisdiction over local practices in Texas and the neighborhood. The rule in one case provided that where a car of sufficient capacity to accommodate light and bulky shipments could not be promptly furnished, two smaller cars would be provided, subject to wholesale rates, however the consignment was divided between the two cars. The Commission declined to interfere in this case, anticipating the necessity for a thoroughgoing revision of all such rules which, it is obvious, almost invite manipulation of rates and improper discrimination.