daily and general use in various of the smaller cities and towns
extending from Massachusetts to Georgia and Illinois, and from
Michigan to Mississippi, it has been ascertained that throughout this
region the transportation charge on such articles ranges as follows:
On a man's suit of clothes, from two to eight cents; on calicos and
ginghams, from one-fiftieth of a cent to one-fifth of a cent a yard;
the freight charge paid on the entire apparel of a fully dressed man
or woman in this section would range perhaps from six or seven to 16
or 18 cents. The rate on an ordinary dining room suite consisting of
table, sideboard, six chairs and a china closet would average from
75 cents to $5, on a parlor suite of sofa and four chairs from 50
cents to $4, on a bedstead and its equipment from 75 cents to $1.50,
in each case from the factory to the home. The lumber used in the
ordinary eight-room house will have paid the railroads from $35 to
$150, and the brick from $6 or $8 to $50 or $60, as the kiln may be
near or remote. A fifty-pound sack of flour from the mill, even at
Minneapolis, in but a few cases has paid a freight rate of over eight
or nine cents to the consumer. Products of the beef or the hog are
carried from the western packing houses throughout this territory at
rates that vary from a fifth of a cent to not exceeding a cent per
pound.
It has not been difficult to secure such information as applies in
the main to the transportation charge borne by a manufactured article
from the place of making to the final market, or on foodstuff from
the place of growth to the place of sale to the consumer. Data as to
the amount of transportation charge carried by the various kinds of
raw material entering into a manufactured product has not in many
cases been so easy of ascertainment. A principal reason has been
that the manufacturers in numbers of instances do not know what it
is themselves. Many kinds of material are bought at a price which
includes delivery at the factory, the freight rate not coming under
the cognizance of the purchaser. The different materials used in
a product may have come from such diverse sources, and paid such
varying rates of freight, that the ascertainment of the total freight
charge in any given unit of manufacture would be too difficult
to be worth while. In numerous other cases the freight charge is
confessedly so small an item that no attempt is made to apportion it
as an item of expenditure per unit of product, the total simply being
grouped in the aggregate of expense.
The statement that the transportation charge borne by the material
entering into an ordinary pair of men's shoes averages one and a
quarter cents is the result of a definite calculation made by one
of the largest shoe manufacturers of the country. A leading woolen
manufacturer estimates that the price of wool at Boston will average
perhaps 30 cents a pound "in the grease," including a transportation
charge that will average one cent a pound. The loss in cleaning and
scouring is about forty-five per cent., and the price of a pound of
scoured wool will average about 63 cents at the mill. Of this about
two cents is chargeable to transportation. One hundred pounds of
wool will make about seventy pounds of straight woolen cloth, on
which the transportation charge has therefore been a fraction less
than three cents a pound. On cloth that is mixed with cotton the
transportation charge is less. The rates on woolen goods from any of
the New England mills are so low that a yard of cloth which will sell
from $1.50 upwards in any of the western markets will not have paid
the railroads more than five cents from the sheep's back in Colorado
to Massachusetts and back again to the Mississippi River.
The following information as to the extent of the transportation
charge borne by divers materials of various industries has been
obtained in each instance from an authority in that industry.
The transportation charge on raw cotton to the mills in Massachusetts
will average from one-half to two-thirds of a cent a pound, not
exceeding one cent per pound even from plantations so remote as
those of Texas. Cotton loses from fifteen to twenty per cent. in
the cleaning, one hundred pounds of cotton making from eighty to
eighty-five pounds of cotton goods. As ordinary calico will run about
six yards to the pound and sell for about five cents, the cotton that
has paid a freight rate of from 50 cents to $1 is woven into $24
worth of calico.
The transportation charge on a pair of rubber overshoes, including
the rubber from South America, the cotton stock, and the shipment to
the western markets, averages about two and one-half per cent. of the
cost of those markets. That is, a pair of rubber overshoes retailing
for 75 cents will have paid for transportation, all told, less than
one and nine-tenths cents.
In no one of these examples, which, perhaps, are typical of the
entire clothing industries in so far as the use of leather, wool and
cotton are concerned, is the transportation charge an appreciable
factor in the price either of the material to the manufacturer or of
the finished article to the consumer.
A barrel of flour made in Minneapolis and transported to Boston is
sold at the time of this writing by the milling company to a dealer
of that city, or any other place in New England, for $6. Of that $6
accrues to the transportation agencies, for carrying the wheat of
which that flour was made from the Western farm to the Minneapolis
mill, and for carrying the flour from the mill to Boston, an amount
that averages 85 cents. The proportion of the transportation charge
to price at different markets varies with the freight rate. At
New York the milling company would sell that barrel for $5.95,
which would include a total transportation charge of 80 cents; at
Philadelphia the selling price would be $5.90, the transportation
charge 75 cents; at Buffalo or Pittsburg the selling price $5.80, and
the total transportation charge 65 cents; at Atlanta the price $6.20,
the transportation charge $1.05; at New Orleans the price $6.10, the
transportation charge 95 cents.
Typical rates on leaf tobacco, averaging in value $13 per 100 pounds
from plantation to warehouse in Virginia and the Carolinas, are
from 15 cents to 21 cents per 100 pounds; on the smoking tobacco
into which this leaf is converted, and which sells at $48 per 100
pounds, from Richmond, Virginia, to New York City 30 cents, to
Chicago 59 cents, to Kansas City $1.16. Rates from the plantation
to the warehouse on the leaf tobacco of the Kentucky and Tennessee
region, which also brings an average of $13 per 100 pounds, are from
5 cents for short to 20 cents for longer distances. The plug tobacco
into which this leaf is converted is sold at $28 per 100 pounds,
being distributed on such rates as these: St. Louis to Louisville,
25½ cents; to New York City, 58½ cents; to Kansas City, 35 cents; to
Seattle, $2.20. Manufactured tobacco in all cases is sold at a price
which includes delivery from the factory to the place of consignment,
wherever it may be, in the United Stales.
The freight rate on cane sugar from the "central" in the Louisiana
district to the final refinery ranges from 5 to 10 cents per 100
pounds, the refinery paying from $3.50 to $4.50 for the sugar.
Sugar that is sold by the refining company at 4½ to 5½ cents a
pound retails at 6 cents, the dealer making little or no profit.
As a town of five to ten thousand people at the average per capita
consumption of seventy-five pounds a year will consume a carload of
sugar in about a week, the jobbing of sugar is greatly decentralized.
Contrasting with this retail price of $6 per hundred pounds typical
distributive rates are, from New York to Chicago 25 cents, to St.
Paul 30 cents, to Kansas City 42 cents; from New Orleans to Chicago
25 cents, to Atlanta 24 cents, to Kansas City 34 cents.
The freight charge on sugar beets raised in Colorado and Utah from
the farm to the refinery is always paid by the sugar company. It
averages from 30 to 40 cents per ton, or for a distance of fifty
miles is as much as 50 cents. A ton of beets contains about three
hundred pounds of sugar, which, allowing for an average loss during
extraction, would produce two hundred and forty pounds of refined
sugar. This is sent from the factories to the principal places of
storage--Kansas City, Omaha and St. Louis. The aggregate freight
charge from the farm to St. Louis on these two hundred and forty
pounds is about $1.70, and the aggregate revenue to the refinery at
five cents a pound, $12.
While the price of bananas is subject to great fluctuation, a fair
average at New York, Philadelphia, Baltimore, Charleston, Mobile
and New Orleans, the ports of import, is $1.75 per 100 pounds. The
average rail charge for carload lots from port to market is from 30
to 50 cents per 100 pounds. About one-third of the bananas consumed
in this country are received at the North Atlantic ports, whence
they are distributed throughout the Eastern and Middle States. The
remaining two-thirds, which supply the South and West, are received
at the Southern ports. Immediately upon receipt at New Orleans, for
example, shipments are made to the North in train loads that they
may be taken out of the warm climate before they spoil, and cars
are re-consigned en route at the instance of the company which has
very thoroughly organized the banana business, an allied company
having about sixty agencies with men who devote their entire time to
extending the sale of the fruit.
For hides that pay a freight rate from the packing houses at Chicago
to New York of 30 cents per 100 pounds, the butcher receives,
according to quality, from $6 or $7 to $11 or $12 per 100 pounds. The
butchers remote from market have the freight rate deducted from the
price paid them for hides, but it is a trifle, seldom exceeding five
cents per 100 pounds. The hide loses from twenty-five to thirty-five
per cent. in the process of tanning; the price of leather is fixed
by measure and not by weight. The rate on tanned leather, however,
between Chicago and Boston is 39 cents per 100 pounds.
The railroads make low rates on fertilizer to encourage its use by
the farmers, it being, of course, to the interest of a railroad to
encourage the production of larger crops that its traffic may be
augmented. Fertilizer of different grades brings from $18 and $20 to
$55 and $60 a ton. Typical rail rates from the places of manufacture
are from Jersey City to Trenton, New Jersey, $1.10 per ton, and from
Boston to Portland $1.20 per ton--both rates applying in carload
lots. In the South, where fertilizer is extensively utilized,
representative rates are from Atlanta to Thomasville $2.50, from
Charleston to Columbia $2.00 per ton.
When allowance is made for the elimination of water from pulp and the
shrinkage in its manufacture into paper, the average freight rate
borne by the material entering into paper at the northern New England
mill is about 13½ cents per 100 pounds. The manufacturers consider
17 cents per 100 pounds to be the average freight rate on the paper
from the mill to places north of the Ohio and east of the Mississippi
Rivers. The aggregate freight charge borne on the average by the 100
pounds of paper which sells at the factory for $2.50 is therefore 30
cents.
As with all things else, the rates on the ores of the far western
region have been adjusted under the necessity of the transportation
agencies to so serve the mines that their products may be marketed.
The rate upon the ore from the mine to the smelter, upon the
metal from the smelter to the refinery, and upon the refined lead
or refined copper from Chicago to the seaboard market, are all
determined by this prime factor. The freight charges, for example,
from the Coeur d'Alene district in northern Idaho on the ores from
which the extraneous material has been roughly separated, to the
Puget Sound refineries, reach a maximum of $6 per ton for a distance
of four or five hundred miles, and the rate from Puget Sound to New
York is $14.50, the average transportation charge, therefore, being
about $20 per ton. The value of a ton of copper at 12 cents a pound
is $240, and a ton of lead at four cents a pound is $80. Copper
passes through manifold and expensive processes and its extensive
consumption has followed the development of electricity. Lead does
not require so many or so expensive workings, and it has long been
a great staple of general use. The mine farther from a smelter
naturally has to pay a higher rate of freight than a mine nearer to
it, receiving, therefore, a lesser net price for its product, _but
the railroads are obliged to so adjust rates that practically every
mine can reach a market_.
The rate on refined petroleum between New York and Chicago is 27½
cents per 100 pounds, the average rate paid north of the Ohio and
east of the Mississippi Rivers being from eight to ten cents per 100
pounds. From Toledo to Atlanta the rate is 48 cents, from Whiting
46½ cents, from New Orleans 35 cents. The rate from Chicago to the
Missouri River is 22 cents, to St. Louis 10 cents; while the rate
from the Kansas field to St. Louis is 17 cents. One hundred pounds
of refined oil contain approximately sixteen gallons which, at an
average price of 12½ cents a gallon at the refinery, would aggregate
$2. The price per gallon to the consumer is increased one cent with
each increment of seven cents in the freight charge.
The principal biscuit company receives from $8 to $16 per 100 pounds
for its crackers and cakes, averaging $10 per 100 pounds for its
leading brand. From its New York plant to Boston the freight rates
are 19 cents per 100 pounds, to Atlanta 62 cents. The rate from
Chicago to Montgomery is 69 cents, to Houston 81 cents, to Denver 97
cents. From either New York or Chicago to the Pacific Coast the rate
is $1.60. These rates apply to carload lots, all goods being sold
delivered, the company absorbing the freight. The retail price is the
same all over the United States as it is with shoes, cigars, soap,
proprietary medicines and dozens of other familiar articles.
On cotton, the great staple product of the South, the freight rate
structure has been in process of development even a longer time
than that affecting the movement of grain from the West. From
the plantation into Memphis, the largest inland cotton center of
the United States, a typical rate is 30 cents per 100 pounds for
one hundred and fifty miles. From Memphis to Boston the rate is
57½ cents, and from Memphis to the Gulf 30 cents per 100 pounds.
From Augusta, Ga., a central market of the Eastern cotton growing
district, the rate to Charleston and Savannah is 21 cents, to
Brunswick 23 cents and to Norfolk 26 cents per 100 pounds. A bale of
cotton contains five hundred pounds and is therefore worth, at 11
cents a pound, $55. The aggregate transportation charge on this bale
from the plantation, one hundred and fifty miles from Memphis, to
Boston, is $4.27.
Mainly because of the rapid shifting of the sources of supply,
there has not yet been developed a stable structure of rates for
the movement of lumber in all parts of the United States. By way of
illustration, however, it may be said that a fair average rate on
lumber into Memphis from the forests of Arkansas is six cents per
100 pounds, or $2.40 per 1,000 feet. Lumber going from Memphis to
New Orleans for export will pay $4.80, or a total transportation
charge from the forest of $7.20 per 1,000 feet. A fair average rate
to the markets in Ohio and Indiana is $8 per 1,000 feet, a total
transportation charge from the forest of $10.40. This is on the kind
of lumber that in 1905 and 1906 sold at about $40. The rate on yellow
pine from New Orleans to Chicago is 24 cents per 100 pounds.
There is an equalization of rates on the iron ore from the upper
lakes in that the rates of the boat lines from the ore mines are the
same to each of the Lake Erie ports. From thence to the furnaces
they are adjusted under the policy of the railroads to make the
transportation charge on the raw material required to make a ton
of pig iron approximate the same amount at each of the competing
furnaces of southern Ohio, Pittsburg, Wheeling, in the Mahoning and
Shenango Valleys, and even as far as the Schuylkill Valley. How
closely this equalization is effected is shown by the fact that
the transportation charge on the ore, coke and limestone required
to produce one ton of pig-iron is as follows in these respective
districts: At the furnaces on the Monongahela River in the Pittsburg
district, $5.82; at the furnaces of the Mahoning and Shenango
Valleys, $5.57; at the furnaces of the Wheeling district, $5.78.
These charges compare favorably with those at the furnaces on the
Lake Shore in the Chicago district, which aggregate $5.63 per ton of
pig-iron, but are higher than at the furnaces on the Lake Shore in
the Cleveland district, where they aggregate but $4.72. The rates on
coal, which gives return loads to the cars that take the ore south
front the Lake Erie ports, are maintained at established differences
between the coal fields of Ohio, Pittsburg and West Virginia. The
rates in effect in the spring of 1908 were $1 per ton from southern
Ohio, 90 cents from southeastern Ohio, $1 per ton from the Pittsburg
field and $1.15 a ton from West Virginia.
The claim of the railroads that the rates on foodstuffs are not high
enough to enter as a factor in fixing the selling price is fully
substantiated by the statements of the dealers in such products. That
is, the conditions are, with negligible exceptions, such that if
the price obtainable in the markets be sufficient to encourage the
growing of livestock, grains, dairy products, fruits or vegetables,
the rate of freight, from whatever locality to whatever market, is
sufficiently low to allow the producer to enter that market. His
profits are, however, as a matter of course, diminished by the amount
of freight which he pays, and, as a rule, the farther the place of
production from the markets the greater is the freight charge. The
differences in the net return to the producer are almost invariably
reflected in the value of the land, which is lower as the distance
from the markets is greater. Largely because of the defective system
of mercantile distribution the grower of foodstuffs obtains a smaller
proportion of the price paid by the consumer than accrues to the
grower of any other agricultural product. Where, as in this country,
the opportunity for the extension of cultivation is practically
unlimited, a good market one season leads the farmers of any district
to increase their production up to the point of minimum profit and
the railroads are then besought for lower rates; when unfavorable
weather or other conditions reduce their output they are also
disgruntled. It therefore rarely happens that the grower, especially
of the quickly perishable foodstuffs, is entirely satisfied with the
freight rates.
A controversy, that it is scarcely an exaggeration to designate
as typical, occurred several years ago between the growers of
watermelons in a Southwestern State and the railroads conveying the
melons to the primary markets. In comparatively a few years that
region had become so productive that the shipments of watermelons
over one road alone ranged from 1,400 to 1,800 cars during a
watermelon season, deliveries being made all over Ohio and Indiana
through dealers from those States who came down and bought the melons
at the farms. The contention for lower rates had waxed so warm that
a reduction in the watermelon rate became the issue upon which a
legislative campaign was fought. The candidate pledged to secure a
reduction in the rate was elected, and introduced a bill, which was
enacted by the legislature, making the rate to the nearest primary
market 7½ cents per 100 pounds. The railroad companies put this
rate in effect and used it as a basis for the lowering of rates to
the territory beyond. During the year of this rate reduction the
traffic department of the railroad company referred to sent word to
the farmers that the company had handled 1,500 cars of melons that
season, the prompt shipment of which had been highly satisfactory
to the growers. It furthermore said that the movement of these
melons from that territory was a one-way traffic entirely, it being
necessary to send special cars empty for the crop. These were
necessarily stock cars that there might be ample ventilation, but
they had to be supplied with extra slats in order that the melons
might not fall out. It was necessary for them to be switched in
requisite number on side tracks especially built adjoining the farms
where the fruit was grown; that switching engines be kept at work,
putting cars in and taking cars out all night and all day. The cars
of melons, moreover, had to be hauled on special trains at a high
rate of speed to get them to the markets before they spoiled. This
reduced the tonnage per train fifteen or twenty per cent below the
maximum that could be hauled at the normal freight train speed. A car
with the average allowable load of 1,100 watermelons would contain
but about twelve tons, although its capacity would be eighteen or
twenty tons; the weight of the car exceeded the weight of the load.
The switching and other special movements necessitated the employment
of night telegraph operators and other extra help at the melon fields.
All of these conditions led the assistant to the general manager of
the company to make an analysis of the expenditure as compared with
the earnings. Waybills were abstracted and the receipts listed. A
tabulation was made of the revenue tonnage, the gross tonnage, the
tare weight, and the expenses incurred in behalf of the traffic. He
found that the handling of the 1,500 cars of watermelons involved a
loss to the company of $12,000 if the expenses of operation alone
were considered.
The results of this investigation were brought to the attention of
the traffic department and the next spring it sent a circular to the
farmers in the truck region urging that the watermelon acreage be
reduced, as the rates on that business were not remunerative, and
stating that the railroad would not undertake to handle it except in
the regular cars that were brought into the territory in the ordinary
course of traffic; that there would be no special trains, nor special
service of any character. The melon growers at once notified the
State Railroad Commission, which, in turn, requested the railroad
company and the melon growers to attend a meeting to discuss the
whole subject. When the meeting convened the chairman called upon the
railroads to say why they had caused so much trouble. The railroad
representative, who was the aforesaid assistant to the general
manager, stated that as he had been invited to attend the meeting it
might be proper for whomsoever instigated it to open the discussion.
Several shippers made statements of their complaints, all admitting,
however, that the melon business had become very profitable,--one
grower saying that $300 to $500 per car was being made out of a
crop. The railroad representative then made a reply, showing the
loss to the company from handling the business for the previous
year, and stated that unless cost for the handling and something by
way of profit could be obtained, the company would prefer to move
other crops. He showed that it had been necessary to park 350 to 400
especially prepared stock cars in the melon territory; that it had
taken a month or six weeks to gather these cars, which had to be
hauled empty to the melon fields. He then pointed out that the rate
per melon was less than a cent and a quarter, whereas it had cost
the farmer four or five cents per melon to bring it by wagon the one
or two or three miles to the railroad track. The chairman objected
to some of the analyses, especially to the contrast of four or five
cents per melon for the wagon haul from the farm with the cent or
a cent and a half per melon for the railroad haul of two hundred
miles. When the railroad man had finished, farmers from all over the
room began to ask questions directly of him. They wanted to know how
much they should pay to afford the railroad some slight profit. They
were told 12 or 12½, cents. The chairman said: "The rate cannot be
changed. It has been fixed by law at 7½ cents and that is the rate.
I am here to protect the people of these counties." The railroad man
suggested that his company might be willing in addition to affix the
necessary slats to the stock cars and perform the switching for $5 to
$6 per car. The farmers were willing to accept this, but the chairman
insisted that it was contrary to law, and finally said in his wrath,
"If you men here are going to deal with the railroad company you can
do it without me. This meeting is adjourned."
With one exception the farmers remained in the hall and expressed a
willingness to pay a rate of 12 cents per 100 pounds.