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Railroads: Rates and Regulations

Chapter 42: FOOTNOTES:
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A comprehensive examination of American railroad economics and public regulation, combining empirical evidence with legal and financial analysis. It surveys construction finance, capitalization, securities and market behavior including speculation and stock-watering, and discusses state regulation of security issuance. It develops methods for determining reasonable freight rates through accounting, physical valuation, and case studies of receivership and reorganization. The work also analyzes intercorporate relations and system combinations, regional consolidation patterns, antitrust dissolution, pooling agreements, and the role of governmental authority in shaping transportation policy and pricing practices.

FOOTNOTES:

[746] The history of the clause will be found at pp. 473 and 564, supra.

[747] Digest of the Hearings, Appendix III, Dec. 15, 1905, pp. 1-244. An excellent body of unworked economic data on rate making is here afforded.

[748] P. 240, supra.

[749] 25th Ann. Rep. I.C.C., 1911, discusses the matter fully.

[750] Cf. p. 255, supra, as to which line makes the rate.

[751] 14 I.C.C. Rep., 476.

[752] Cf. instances cited by Judge Knapp before the Senate (Elkins) Committee, 1905, IV, p. 3294. Hammond, Rate Theories of the I.C.C., also marshals these cases.

[753] Cf. F.H. Dixon, A Traffic History of the Mississippi River; Doc. 11, Report National Waterways Commission, 1911.

[754] Cf. pp. 385, 566, supra, and 638, infra.

[755] 22 I.C.C. Rep., 366.

[756] P. 473, supra.

[757] Already discussed in other connections in chapters VII and XI.

[758] 5 I.C.C. Rep., 478, 510.

[759] For Spokane, 15 I. C. C. Rep., 376 (1909); 19 Idem, 162 (1910); 21 Idem, 400 (1911). For Nevada: 19 Idem, 238 (1910) and 21 Idem, 329 (1911). The latest Denver case is 15 Idem, 555. For Salt Lake City 19 Idem, 218.

[760] Shown by a map in 19 I. C. C. Rep., 241.

[761] 19 I. C. C. Rep., 250; 21 Idem, 351, 416-421; Dunn, The American Transportation Question, pp. 178-221. Railway Age Gazette, LIII, p. 202.

[762] Cf. chap. XX, infra.

[763] P. 217, supra.

[764] 9 I. C. C. Rep., 318 et seq. Reprinted in our Railway Problems.

[765] Cf. U. S. v. U. P., etc., Evidence, I, p. 295.

[766] Cf. Railway Age Gazette, LIII, p. 201.

[767] Best reviewed in Brief for the United States in U.S. v. Atchison, Topeka and Santa Fe Railway, etc.: Supreme Court, October term, 1911, p. 10.

[768] Railway Age Gazette, May 14, 1909, and November 25, 1910.

[769] Brief for U.S., loc. cit., p. 12.

[770] 191 Fed. Rep., 861.

[771] The plan is in Railway Age Gazette, June 4, 1909, p. 1182. New tariffs are described in ibid. Cf. also Boston Transcript, November 28, 1910, for other plans.

[772] 21 I.C.C. Rep., 329, 400. Both the Spokane and Nevada cases are combined in the appeal to the Supreme Court; as is also the independent order of the Commission denying relief from the fourth section to the Union Pacific and other roads.

[773] Chap. X, supra, especially the map facing p. 365.

[774] 9 I. C. C. Rep., 318. The first suggestion I find of graded rates is in the dissenting opinion in this St. Louis Business Men's League case. Reprinted in our Railway Problems.

[775] Brief for U. S., loc. cit., p. 55. Annual Report I. C. C., 1911, p. 31.

[776] A compromise offered by the railways and accepted by commercial bodies pending the Supreme Court decisions was filed June 18, 1912. It is estimated to save Spokane shippers alone about $500,000 annually. Class rates are the Commission's from the seaboard, but from interior points are somewhat lower. The acceptance of the distance principle is the significant point.

"As the distance, St. Paul to Spokane, approximately 1500 miles, is 150 per cent. of the distance Omaha to Salt Lake, approximately 1000 miles, a reasonable rate from St. Paul to Spokane would not be less than 130 per cent. of the rate from Missouri river to Salt Lake, and in the proposed tariff rates from St. Paul to Spokane would be made accordingly.

"From Mississippi common points as defined by current tariffs, the rates would be 112½ per cent. of the St. Paul rates.

"From Chicago and common points, the rates would be 116-2/3 per cent. of St. Paul rates.

"From Detroit and common points, 125 per cent. of the St. Paul rates.

"From Buffalo, Pittsburg and common points, 130 per cent. of St. Paul rates.

"From New York, Boston and common points, 130 per cent. of St. Paul rates.

"From Colorado common points, 90 per cent. of St. Paul rates."

[777] Cf. Railway Age Gazette, July 28, 1911, p. 162.

[778] 191 Fed. Rep., 856.

[779] Decided favorably to the I. C. C., 1914; 234 U. S. 476, 495.

[780] Market competition as such is discussed at p. 118, supra.

[781] 21 I. C. C. Rep. 355, 367: the Transcript of Testimony in the Supreme Court record is especially illuminating. Cf. also Twenty-fifth Annual Report I. C. C., pp. 30-40.

[782] S. O. Dunn in Railway Age Gazette, November, 25, 1910.

[783] Railway Age Gazette, 1910, p. 1005.

[784] 21 I. C. C. Rep., 418-423 is best on this. Cf. also p. 608, supra.

[785] As analyzed in chapter VII, supra.

[786] Brief for the U. S., loc. cit., p. 37; Annual Report I. C. C., 1911, p. 36.

[787] In the Lemon rate cases also; 190 Fed. Rep., 593. Cf. supra, p. 592.

[788] H. S. Smalley in Annals of the American Academy of Political Science, March, 1907, pp. 299-304. Cf. also our Railway Problems, chap. XXIV. The point will be more fully discussed in vol. II, dealing with matters of finance, valuation, etc.

[789] Annual Report I. C. C., 1911, p. 38. Brief for U. S. Supreme Court, no. 883 et seq., pp. 23-37. Also Brief for I. C. C. in the same case.

[790] Commerce Court opinion, p. 15. Cf. p. 507, supra.

[791] 181 U. S., I. Cf. also p. 592, supra.

[792] Of significance on this point is Commissioner Lane's dissent in the Lemon rate case. P. 592, supra.

[793] For details, Cf. Hammond, Rate Theories of the Interstate Commerce Commission (1911) and J. Strombeck, Freight Classification (1912). Also p. 468, supra.

[794] Atlantic Monthly, September and October, 1905. On shortcomings of the later amendments of the law, cf. F. H. Dixon, in Quarterly Journal of Economics, vol. XXIII, 1910, p. 630.

[795] Railway Age Gazette, editorial, January 12, 1912, p. 41; and S. O. Dunn, The American Transportation Question, 1912.

[796] Cf. the Fort Worth case decided June 6, 1912; also the Eau Claire case, 5 I. C. C. Rep., 264. The latest case in which the Commission held that it had power to suspend a proposed reduction in rates arose from just such a condition of affairs, 22 I. C. C. Rep., 160.

[797] I am indebted to Professor Smalley of Ann Arbor, certainly the best authority among economists, for many citations on this point; as well as to Professor F. H. Dixon for suggestions. Cf. also 21 I. C. C. Rep., 415; Annual Report I. C. C., 1911, p. 34; and the Commerce Court opinion under discussion. Commissioner Harlan in his dissent in the Shreveport case asserts a clearer right over minimum than over maximum rates as against state authority. 23 I. C. C. Rep., 54.