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:—
| Cents per 100 lbs. |
Per Cent. of first-class rate. |
|
|---|---|---|
| St. Louis to Nashville | 23 | 38 |
| St. Louis to Louisville | 34.5 | 83 |
| St. Louis to St. Joseph | 19.5 | 33 |
| St. Louis to Chicago | 15.1 | 35 |
Examination of the classification volumes thus assigns these the following rates in the three directions for equal distances out of St. Louis. Going east the charge would be 34.5 cents, going west 19.5 cents, and going south 23 cents per 100 pounds, respectively. The hodgepodge is made more manifest by the right hand column in this table, in which the percentage of first-class rates levied upon household goods in carloads under the four classifications is shown. Under the Official system, with the lowest first-class rates, as above noted, the rate on household goods is higher than under any of the other three. The result is that the relation between the rate on household goods and first-class goods is eighty-three per cent.; whereas in the other two cases it is substantially less than half this percentage. This single illustration, it is hoped, may drive home the conclusion that there is an immense mass of fortuitous and utterly unreasonable allocation under the classification systems as they are at present established.[385] But whether that may be used as an argument in favor of substituting a single uniform classification is open to serious doubt. Rather does it serve to emphasize the fact that rigid revision of the present scheme under Federal control, perhaps, is more necessary than an experiment in uprooting the entire system.
A few general conclusions may be drawn from this rather over-elaborate description of present conditions as to classification in the United States. It has been necessary, however, to reiterate details in order to make clear the extremely unsatisfactory situation at the present time. In fact, in this domain of classification, standardization of practice so characteristic of American rate making and operation in general, has noticeably lagged behind. Whether it will be possible, in view of the wide extent of the country and the diversity of its climatic and commercial conditions, ever to devise a single uniform classification is open to serious doubt. Even the Interstate Commerce Commission, once a leader in the demand for uniformity, now concedes this fact in particular instances.[386] Thus:—"wool east of the Mississippi is taken up at numerous points and is carried under comparatively light loading. What would be a fair classification there, would not be just in the Far West, where the movement is almost entirely in carloads and where the actual loading is from two to three times that in Official Classification territory. We are of the opinion that wool should be classified under the Western Classification as second class, l. c. l., and fourth class, c. l.," etc. The experience of England is, of course, commonly cited as a precedent.[387] In that little country the ever-increasing complexity of classification was precisely parallel to our own. From simple schedules for a few hundred articles, the number of items steadily increased until there were over 4,000. At this point the government intervened; and after tedious and protracted sessions under the auspices of the Board of Trade in 1888 the whole schedule was brought down to 1,400 separate items. All the complicated and confusing rules were harmonized and many anomalies were cut out. Certain it is that matters should be firmly taken in hand in this country in the same manner. The separate state classifications and hundreds of conflicting rules and jurisdictions should be eradicated. Even if a single uniform classification be proved impracticable, as seems to me likely, it might still be possible to greatly simplify the present intolerable mix-up. There should be a representative of the Interstate Commerce Commission on each of the classification committees, ready at all times to exert pressure for simplification and uniformity.[388] The three main classification committees, supposing that they shall continue to exist, should interlock by exchange of representatives. The greater the reform flowing from the initiative of the carriers themselves, the better. Thus, in time, matters may become sufficiently standardized as between the three main committees so that, under legal compulsion or otherwise, the final problem of uniformity may be tackled by recasting the whole body of tariffs and classifications together. But such a task at this writing appears almost superhuman. Conditions may, of course, so shape themselves ultimately that it may be brought about. But, in the meantime, steady and persistent pressure should be exercised in the direction of this final goal. Reform of classification practice is certainly the greatest need of the time in the transportation field.
FOOTNOTES:
[315] 1901. Ripley, W. Z.; Report U.S. Industrial Commission, XIX, pp. 383-397.
1902. Interstate Commerce Commission, Railways in the U. S. in 1902. Part II. [Fine data.]
1905. Acworth, W, M.; Elements of Railway Economics, pp. 99-118.
1909. Dunn, S. O.; Uniform Classification, Railway Age Gazette, XLVII, pp. 413, 462, 497, 552.
1911. Hammond, M. B.; Railway Rate Theories of the Interstate Commerce Commission.
1912. Strombeck, J. F.; Freight Classification. (Limited to classified schedules.)
[316] 10 I.C.C. Rep., 281; 13 Idem, 111; 4 Idem, 32; 9 Idem, 264; 17 Idem, 511; 23 Idem, 242; 2 Idem, 1.
[317] Railways in the United States in 1902, by the Interstate Commerce Commission, 1903. Part II, p. 24, gives much data on changes of classification of specific articles since 1886.
[318] For the rate advances of 1900, mainly effected by this means; U. S. Industrial Commission, IX, p. 859, and XIX, p. 282.
[320] The Official Railway Guide of the United States gives the personnel of scores of these associations annually, with a definition of the territory of each.
[321] 3 I.C.C. Rep., 473.
[322] Acworth's Elements of Railroad Economics, p. 104, is best on England. Cf. McPherson's Railroad Freight Rates, p. 148.
[323] Op. cit., p. 149.
[324] Cullom Committee, Testimony, p. 759.
[325] Railway Age Gazette, September 8, 1911, p. 458.
[327] 3 I.C.C. Rep., 473.
[328] Railways in the United States in 1902, I.C.C., 1903, Part II, p. 39; In the South in 1876 only 6 per cent. of items had carload ratings; while in 1902, 65 per cent. were so favored, as compared with 82 per cent. in trunk line territory and 81 per cent. in the West.
[330] Samuel O. Dunn, Railway Age Gazette, September 10, 1909, p. 462, is best on this. Cf. 8 I.C.C. Rep., 368.
[331] Proposed rate advances November 29, 1910.
[332] 22 I.C.C. Rep., 565.
[333] 22 I.C.C. Rep., 585. Cf. also 23 Idem, 395, on articles too large to be loaded through the side door or too long to be loaded through the end window.
[334] Hammond, Railway Rate Theories, etc., 1911, p. 42, analyzes interstate commerce decisions as to these. Strombeck, Freight Classification, 1912, pp. 35-60, also discusses the various factors entering into cost.
[335] 6 I.C.C. Rep., 295; 10 Idem, 255.
[336] 4 I.C.C. Rep., 611; 9 Idem, 382. But compare 23 Idem, 663, fixing the rate on stock cattle at 75 per cent. of that for beef or fat cattle. How about cost of service here?
[337] 10 Idem, 327.
[340] 6 I.C.C. Rep., 88; 9 Idem, 382; 4 Idem, 48. On freight rates and prices compare Rep. U. S. Industrial Commission, XIX, p. 366, and chap. X, infra.
[341] Hammond, Railway Rate Theories, p. 14 et seq.
[342] Ibid., pp. 27 and 36.
[343] Ibid., p. 29.
[344] 14 I.C.C. Rep., 127.
[345] Freight, February, 1905, p. 61.
[346] 10 I.C.C. Rep., 281.
[347] 17 I.C.C. Rep., 197. But compare 23 Idem, 7, on stock and fat cattle; and 14 Idem, 127, on "big-vein" and "small-vein" coal, as above.
[348] 20 I.C.C. Rep., 426; 21 Idem, 41.
[349] 2 Idem, 1.
[350] Evidence before the Interstate Commerce Commission and the Industrial Commission as to freight rate advances in 1900 proves this point.
[352] Sixteenth Annual Report I.C.C., 32; 19 I.C.C. Rep., 244; 21 Idem, 349 and 418.
[353] 18 I.C.C. Rep., 459.
[354] Cf. Annual Report, I.C.C., 1909, p. 11.
[355] McPherson, Railroad Freight Rates, pp. 117-148, is good on this.
[356] Cotton pools in the South; cf. vol. II.
[357] 23 I.C.C. Rep., 151, investigating the transportation of wool affords a fine example.
[358] 3 I.C.C. Rep., 473.
[359] United States Industrial Commission, XIX, 1901, p. 281.
[361] Cf. testimony of Wicker before the Cullom Committee in 1886.
[362] 22 I.C.C. Rep., 303.
[363] 7 I.C.C. Rep., 92.
[364] Samuel O. Dunn, Railway Age Gazette, September 10, 1909, p. 463. Cf. 12 I.C.C. Rep., 510; 9 Idem, 440; and 23 Idem, 504.
[365] The following wide variations as between the different classifications appear in these excerpts alone, varying from 40,000 to 12,000 lbs. in the Southern Classification, for instance.
| Official Classification— | |
| Scrap zinc | 36,000 lbs. |
| Acetic acid in carboys | 24,000 lbs. |
| Western Classification— | |
| Advertising matter | 24,000 lbs. |
| Advertising racks, iron | 30,000 lbs. |
| Southern Classification— | |
| Zinc concentrates | 40,000 lbs. |
| Fodder shredders | 12,000 lbs. |
| Harvesters | 15,000 lbs. |
Search through the entire list would doubtless disclose a far wider range, with coal or iron at 90,000 lbs. or more, and feathers at the foot of the list.
[366] 23 I.C.C. Rep., 158.
[367] 11 I.C.C. Rep., 328.
[368] Changes in minimum carloads since 1887 by commodities are fully described in "Railways in the United States in 1902," I.C.C., 1903, Part II, p. 17. Their relation to rate increases is evident.
[369] Strombeck, Classification, p. 35 et seq.; Railway Age Gazette, June 30, 1911, p. 1696.
[371] Railway Age Gazette, September 24, 1909, p. 553, Samuel O. Dunn, best treats this topic.
[372] Cf. the "two-for-one" rule in the Indianapolis case; 16 I.C.C. Rep., 254.
[373] 23 I.C.C. Rep., 259; also 23 Idem, 226.
[375] Nothing was accomplished, beyond the preparation of a comprehensive report, under the chairmanship of J. W. Midgley in June, 1890.
[376] Railway Age Gazette, May 10, 1907, p. 727; 1909, p. 415. The whole movement is reflected in the Proceedings of the National Convention of State Railroad Commissioners year by year.
[377] Railway Age Gazette, 1912, pp. 211, 224, 252 and 370.
[378] Lectures by O. M. Rogers, La Salle Extension University, Chicago, 1910. Also Railway Traffic Maps by W. A. Shelton, Chicago, 1913.
[380] Well brought out in the Danville case, 8 I.C.C. Rep., 409 and 571; and in the complaint of Wilmington, 9 Idem, 48.
[381] Notable recent instances are afforded in the State Rate cases now pending before the U. S. Supreme Court, and in the Shreveport case, 23 I.C.C. Rep., 31; both discussed in chapter XX.
[382] 16 I.C.C. Rep., 254.
[383] Some are described in the Reports of the U. S. Industrial Commission, 1900; and the Senate (Elkins) Committee, 1905.
[384] 14 I.C.C. Rep., 294.
[385] "In the Southern Classification plate glass, all sizes, in carloads, is rated third class; window glass and rough or ribbed glass, fifth class. In the Western Classification plate glass, outside measurement not exceeding 100 united inches (that is, length and width added), is rated fourth class in carloads; window glass, and rough, rolled, or ribbed glass, fifth class. In the Official Classification plate glass, outside measurement not exceeding 80 united inches, is rated fourth class in carloads; window glass and rough and ribbed glass, fifth class. Thus it appears that in Southern Classification territory plate glass of ordinary size is rated higher than in Official or Western Classification territories; and while in the two latter territories plate glass is rated one class higher than window glass, or rough or ribbed glass, in Southern Classification territory, plate glass is rated two classes higher than rough, ribbed, or window glass. As applied to the transportation from St. Louis territory to Memphis it results in payment by the consignee at Memphis of rates on plate glass which are 50 per cent. higher than the rates on window glass."—21 I.C.C. Rep., 113.
[386] 23 I.C.C. Rep., 169.
[387] Acworth, Elements, etc., p. 99; McDermott, Railways, p. 29; Ripley, Railway Problems, chap. XXV.
[388] 22 I.C.C. Rep., 103, is a fine instance of rectification of unjust classification rules on vehicles into the South from Toledo, Ohio.