Even a cursory examination of the classification a few years ago would bring to light all sorts of petty anomalies and inexplicable conflicts both of description and rates. Most of these doubtless had some warrant originally, but it seems, indeed, as if many differences might be eliminated.[383] For instance, "excelsior spring beds K. D. (knocked down), sawdust, and leather belting, are all in the second class of the Official Classification, when shipped in less-than-carload lots. In the Western, only the belting and beds are in the second class, excelsior is third and sawdust fourth; while in the Southern, beds are first class, belting second class, excelsior fifth class, and sawdust sixth." The recent complaint of the Greater Des Moines Committee[384] disclosed an odd state of affairs under which old shoes were given a carload rating to Des Moines—an advantage not extended to new and unused footwear. Why should axes be given carload rating in trunk line territory when the freight rate on hatchets is the same whether the shipments are in 100 pound or 20,000 pound lots? Is it logical that cotton piece goods from Atlanta to Boston should be differently classified from the same commodity exchanged between the same two cities in the opposite direction; or that goods should enter Richmond, Virginia, on one classification and go out on another? Such anomalies are sometimes difficult to account for. Their existence, however, despite the efforts of the carriers to eliminate them and to keep them eliminated, emphasizes strongly the need for such continual revision as shall more generally standardize practice. Few carriers alone are able to withstand pressure from powerful shippers. It is difficult, in fact, even for the classification committees to oppose them. The strong hand of the government should enforce harmonious action to the fullest degree compatible with the growth of trade and conflicting commercial interests. It would help the railways even more than the shippers.
And yet, bearing in mind all the disadvantages and evils of the present threefold system, the obstacles incident to the substitution of a single uniform classification for the United States grow more impressive as one examines them in detail. Our vast territory and the extreme diversity of agricultural and industrial conditions render the problem far more difficult than in the compact and more homogeneous communities abroad. The primary advantage of the present system is that each of the three existing classifications more or less clearly reflects local trade conditions in its own territory. From the point of view of transportation, the same commodity may well be able to yield widely different proportions of the total revenue levied upon the traffic of that section. For example, cotton piece goods may be rated first class in Western territory, fourth class in Southern, second class less fifteen per cent. in Official territory, and one-third of first class in the transcontinental tariffs. The reason for this diversity of treatment is that such cotton piece goods both in the South and the East are a staple product of the district. The rates, therefore, in each case are intended to foster the manufacture of cotton by according a relatively low freight rate upon its output. In the West, on the other hand, where no cotton is raised and no cotton mills exist, these goods become much more valuable, as classified, relative to other commodities. Oranges or lemons in southern California are favored by almost commodity rates in order to foster the industry in that locality. But these citrus fruits reaching New England as a luxury, may consequently there be made to contribute a much larger proportion of the railways' revenue. The East, as a rule, classifies manufactured products relatively low, inasmuch as it is the home territory for industry of this sort. But these products, when they pass beyond the Mississippi, rise almost automatically to a higher class as they increase in value to the community in which they are consumed. How different are the commercial conditions under which wool is rated east and west! In one territory it is distributed to manufacturers in small lots at way stations; in the other it moves long distances in solid carload lots.
One further illustration may make our point clear. At first sight it is anomalous that in the East the rates on cattle and shoes between New York and Boston are not widely different, namely nineteen cents and twenty-five cents, respectively, per one hundred pounds; while as between Montana and Chicago, the rate on shoes west bound is almost four times as great as the rate on cattle over the same haul eastward. In other words, rates on shoes in the East are at bed-rock, whereas in the West it is the cattle rates which are held at the lowest possible point. Ton-mile rates on shoes, in other words, increase progressively toward the west, while ton-mile rates on cattle rise, contrariwise, in the direction of the stronghold of manufactures. The difference between the two, however, is in the fact that the upper level of what the traffic will bear is very much greater in the case of one than of the other. Cattle, possibly, may never support more than seventy-five cents per hundredweight; while shoes can be moved under rates four times as high.
Obviously any mere compromise between divergent classifications, each based upon the protection of a local constituency against competition from outside its own territory, can hardly prove satisfactory. Cotton piece goods, already instanced in this regard, if grouped as first class in the West, second class less fifteen per cent. in the East, and fourth class in the South, would hardly be adequately treated in a uniform classification for the entire country by averaging these different figures. For neither the West nor the South would be satisfied—the rating being too high to fully protect the southern mills against competitors in New England; nor, on the other hand, would the classification be sufficiently high in the West to yield the roads proportionately the revenue which goods of that character ought properly to contribute. The East, alone, lying intermediate between the other two, would not be greatly disturbed. The necessary outcome, it is predicted, of the adoption of any such average or uniform classification would be the quotation of exceptional commodity rates wherever the uniform classification was at variance with local interests. The increase in commodity ratings after 1887—now happily reversed—may perhaps be in part accounted for in this way. Any such stimulation of exceptional ratings would be a primary objection to any uniform classification for the United States as a whole. As one witness before the Interstate Commerce Commission testified, "If ever there is a uniform classification, it will take a warehouse to hold the commodity tariffs." Were such the case, far greater complexity and possible discrimination might exist than at the present time.
A second equally important disadvantage of the prescription of a uniform classification arises from the fact, already noted, that classifications and distance tariffs are interlocking and interdependent. Any change of the one involves a change of the other. Therefore, a unification of the three existing classifications would render it necessary to overhaul from top to bottom the distance tariffs under which it was to be applied all over the country. For example, the rate from New York to Atlanta, first class, being $1.14, while the rate from New York to Chicago, about the same distance, first class, was 75 cents; to choose a first-class rating which should apply on both these lines would involve, not only a re-classification of the commodities, but also that the new rates applying upon first-class goods should be somewhere between $1.14 and 75 cents. Inasmuch as it had taken many years to reach the present adjustment, it seems hardly possible that a new arrangement could be made which would yield the railways a satisfactory return upon their traffic. The difficulty herein suggested was clearly instanced in the case of a comparison made between the Southern Classification and the Uniform Classification proposed in 1890. The difficulty, and always a prominent one, was that the Uniform Classification was largely for carload lots, while the practice was entirely different in the old Southern Classification. Moreover, most of the Southern rates were given for goods "released"; that is to say, at the owner's risk. Cotton piece goods, non-released, in less-than-carload lots from New York to Atlanta, were charged sixty cents a hundredweight under the old Southern Classification. As reclassified in the suggested Uniform Classification, the rate was ninety-eight cents; and was given only for "released," that is to say, at owner's risk. The difference for the same commodity from Louisville to Atlanta was as fifty-six cents in the old Southern, to ninety-two cents under the Uniform. Canned goods, not otherwise specified, "non-released," in less-than-carload lots from Louisville to Atlanta, were charged sixty-eight cents under the old Southern Classification. The new Uniform Classification, in order to yield the same revenue, made it necessary to charge a rate of eighty-one cents. Differences of this kind were manifest in every one of the thousands of commodities. In other words, the adoption of a uniform classification meant to abolish by a stroke of the pen all the old rates which formerly existed. An entirely new schedule of rates would have had to be worked out; with the most uncertain results upon revenue and upon the rival commercial interests concerned. The magnitude of such a task can be scarcely appreciated. Years would be required to reach a condition of relative stability once more.
The close interdependence of classification and distance tariffs, as well as, incidentally, the differing spread of rates between various groups of goods under the three existing classification systems, are so fundamental in their bearing on reform that yet another illustration may not be out of place. It is given in the following table. This shows the rates from St. Louis—standing at the meeting point of the main classification territories—for approximately equal distances out in three different directions.
| Rates | Cents per 100 lbs. | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Southern Classification— | ||||||||||
| St. Louis to Nashville | 1 | 2 | 3 | 4 | 5 | 6 | A | B | ||
| (323 miles) | 61 | 52 | 45 | 35 | 28 | 23 | 22 | 26 | ||
| Official Classification— | ||||||||||
| St. Louis to Louisville | 1 | 2 | 3 | 4 | 5 | 6 | ||||
| (317 miles) | 41 | 34½ | 25½ | 17½ | 15 | 12 | ||||
| Western Classification— | ||||||||||
| St. Louis to St. Joseph | 1 | 2 | 3 | 4 | 5 | A | B | C | D | E |
| (320 miles) | 60 | 45 | 35 | 27 | 22 | 24½ | 19½ | 17 | 13½ | 11 |
| Illinois Classification— | ||||||||||
| St. Louis to Chicago | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
| (284 miles) | 43.3 | 35.2 | 27.5 | 22 | 17.6 | 16.6 | 15.1 | 13.5 | 10.7 | 9.6 |
One line penetrates Southern territory 323 miles to Nashville; another goes eastward 317 miles to Louisville under Official ratings; and the third extends westward 320 miles to St. Joseph, according to the schedules of the Western Classification. To these three there is also added a set of rates north bound under the Illinois Classification which applies between St. Louis and Chicago, 284 miles. This last schedule, of course, is prescribed by the state railway commission. The first point to notice is the widely different number of groups in the four schedules. One is divided into eight classes; another into six; while the last two are each spread over ten subdivisions. Secondly, bearing in mind that the three upper schedules govern approximately the same mileage, it will be noted that the Official rate, first class, is only about two-thirds of that in the other two classes. If one then compares the sixth group in each case, an even greater divergence appears—the Official rate being only about one-half of that in the other two cases. Or, taking the lowest rates of all in the three upper schemes—always, be it noted, for equal mileages—it now appears that the Official and the Western descend to about the same figure, while the Southern is arrested at a point more than twice as high. The primary significance of this showing is, of course, that a single uniform classification in which all of these three systems should be merged, means not merely a reassignment of all possible commodities in a given number of classes; but also a complete recasting of the distance tariffs as well. In other words, as aforesaid, freight rates being compounded of the two factors, distance charge and classification, all the delicate adjustments based upon commercial competition throughout the country, would be thrown into utter confusion; unless every modification of the grouping of classes were accompanied by a corresponding change in the rates per mile. A task sufficient indeed to appall the best of traffic experts!
To complete the demonstration of the complexity of present arrangements, and yet of the danger incident to rudely disturbing them, one should apply the classified rates in the preceding paragraph for these equal hauls to particular commodities. Take household goods in carloads, for example:—