1897 85.2 87.7 91.1 86.4 86.6
1898 96.1 94.4 93.4 95.4 86.4
1899 100.0 98.3 96.7 105.0 114.7
1900 109.5 104.2 106.8 120.9 120.5
1901 116.9 105.9 101.0 119.5 111.9
1902 130.5 111.3 102.0 134.3 117.2
1903 118.8 107.1 106.6 149.3 117.6
1904 126.2 107.2 109.8 132.6 109.6
1905 124.2 108.7 112.0 128.8 122.5
1906 123.6 112.6 120.0 131.9 135.2
1907 137.1 117.8 126.7 135.0 143.4
Lumber and House
Building Drugs and Furnishing Miscell- All Com-
Year Materials. Chemicals. Goods. aneous. modities.
1890-1899 100.00 100.00 100.00 100.00 100.00
1897 94.4 94.4 89.8 92.1 89.7
1898 95.8 106.6 92.0 92.4 93.4
1899 105.8 111.3 95.1 97.7 101.7
1900 115.7 115.7 106.1 109.8 110.5
1901 116.7 115.2 110.9 107.4 108.5
1902 118.8 114.2 112.2 114.1 112.9
1903 121.4 112.6 113.0 113.6 113.6
1904 122.7 110.0 111.7 111.7 113.0
1905 127.7 109.1 109.1 112.8 115.9
1906 140.1 101.2 111.0 121.1 122.5
1907 146.9 109.6 118.5 127.1 129.5
From the data in the foregoing table, which show advances averaging
nearly forty-five per cent., the following table, indicating the
present purchasing power over railway freight service of each class
of articles, in a manner similar to that adopted to measure the
increased power of labor to buy railway freight transportation, has
been derived:
Increased
Relative prices. power to pur-
---------------------- chase railway
Commodities. Increase freight services
1897. 1907. per cent. per cent.
Farm products 85.2 137.1 60.92 69.19
Food 87.7 117.8 34.32 41.22
Cloths and clothing 91.1 126.7 39.08 46.23
Fuel and lighting 96.4 135.0 40.04 47.24
Metals and implements 86.6 143.4 65.59 74.10
Lumber and building materials 90.4 146.9 62.50 70.85
Drugs and chemicals 94.4 109.6 16.10 22.07
House furnishing goods 89.8 118.5 31.96 38.74
Miscellaneous 92.1 127.1 38.00 45.00
All commodities 89.7 129.5 44.37 51.79
AGRICULTURAL PRODUCTS AND FREIGHT RATES.
The statistician to the United States Department of Agriculture
obtains annually a very large number of reports from farmers as to
prices obtained for their products and these are carefully tabulated.
The results show the average prices, at the farms, of the principal
agricultural products. The following table shows the increased prices
obtained for such products, and the increased power which these
producers enjoy, per unit of their products, to purchase railway
freight services:
Increased
power to
purchase
Price. railway
------------------------- freight
Product. Value of Increase service
crop of 1907. Unit. 1897. 1907. per cent. per cent.
Corn $1,336,901,000 Bushel $0.263 $0.516 96.20 106.28
Wheat 554,437,000 " .808 .874 8.17 13.73
Oats 334,568,000 " .212 .443 108.96 119.70
Barley 102,290,000 " .377 .666 76.66 85.74
Rye 23,068,000 " .447 .731 63.53 71.94
Buckwheat 9,975,000 " .421 .698 65.80 74.32
Potatoes 184,184,000 " .547 .618 12.98 18.79
Hay 773,507,000 Ton 6.62 11.68 76.44 85.51
Cotton 613,630,436 Pound .066 .104 57.58 65.68
--------------
Total $3,932,560,436
Detailed tables presenting the data from which the foregoing averages
for the whole country have been derived and showing prices and
purchasing power over freight service are given in Appendix D[G].
These tables disclose the uniformity, throughout the United States,
of the advance in agricultural prices and of the augmented command of
agricultural producers over railway freight service.
FARM ANIMALS AND FREIGHT RATES.
The Department of Agriculture of the United States also collects
data concerning the value of farm animals and annually publishes the
average values reported for the first day of each successive year.
All classes of farm animals have increased in value since 1897 and
each represents a great command over railway freight services, for
the sum representing the average value of each animal will now buy
much more freight transportation than it would in 1897. This is shown
by the following table:
Increased
power to
purchase
Average price, each. railway
-------------------------------- freight
January 1, January 1, January 1, Increase, service,
1908. 1897. 1908. per cent. per cent.
Horses $1,867,530,000 $31.51 $ 93.41 196.45 211.69
Mules 416,939,000 41.66 107.76 158.67 171.97
Milch cows 650,057,000 23.16 30.67 32.43 39.24
Cattle, except
milch cows 845,938,000 16.65 16.89 1.44 6.65
Sheep 211,736,000 1.82 3.88 113.19 124.15
Swine 339,030,000 4.10 6.05 47.56 55.14
-------------- ----- ------ ------ ------
Total $4,331,230,000 -- -- -- --
In considering the foregoing the fact that the prices relate solely
to animals on farms should be borne in mind. They are doubtless
somewhat lower than for animals elsewhere located, but prices of the
latter have probably moved in the same direction and in about the
same extent.[H]
RAILWAY RATES IN 1897 AND AT PRESENT MEASURED IN MONEY.
Throughout the foregoing discussion reference has frequently been
made to what has been assumed to be a typical shipment, that is,
a fifteen-ton carload of fourth class freight transported between
Chicago and New York. The typical service rendered in moving this
shipment would have brought the railways gross receipts of $105.00,
in 1897 or in any of the intermediate years, and would bring the
same amount now. The period in question, however, has witnessed
many thousands of changes in railway rates on particular commodities
and between particular points, and, confining the discussion for
the present to the mere expression of rates in terms of money, it
is necessary to inquire whether the general level of all rates has
been raised or lowered and how far the change, if any is discovered,
has gone in either direction. Now, it is manifestly impossible to
correlate all rates in a single tabulation, and, giving to each its
proper weight in the determination of a final average, thus establish
definitely and with complete precision the relation between the money
rates of 1897 and those at the present time. The number of different
articles shipped and the great number of different points at which
each article may enter into the aggregate of traffic movement or
to which it may be destined, as well as the elusive character of
the factors which would indicate the relative weight properly to be
allowed to each separate rate, wholly preclude the adoption of such a
method. Fortunately, however, American railway accountants long ago
adopted a measure of traffic movement, which was later officially
sanctioned by its adoption for the same purpose by the Interstate
Commerce Commission, and which, when compared with the gross receipts
from freight service, results in an average that throws great light
upon the movement or absence of movement in the general level of the
rates charged. When the weight of any shipment, expressed in tons, is
multiplied by the distance which it is carried, expressed in miles,
the resulting product gives a measure of the service performed, in
units which are designated as "ton-miles." When the ton-miles (or
ton-mileage) of all shipments are aggregated the total represents
the sum of all services. The result of dividing the revenue from a
particular shipment by its ton-mileage is the average rate per ton
per mile for that shipment and if the sum representing the aggregate
gross receipts from all railway freight services is divided by the
aggregate ton-mileage of those services the quotient obtained is the
average ton-mile rate for all services. During the period from 1897
to 1907 these data have been compiled annually by the Interstate
Commerce Commission under the direction of Professor Henry C. Adams,
its statistician. The average rates thus established are given both
for the United States as a whole and for each of ten districts or
groups. The following table shows these averages as they are given in
the successive annual statistical reports of the Commission:
TABLE LEGEND
REGION:
A == Maine, New Hampshire, Vermont, Massachusetts, Rhode Island and
Connecticut.
B == New Jersey, Delaware, Maryland, New York, east of Buffalo,
Pennsylvania, east of Pittsburgh, West Virginia, North of
Parkersburg.
C == New York, west of Buffalo, Pennsylvania, west of Pittsburgh,
Michigan, lower Peninsula, Ohio, Indiana.
D == West Virginia, south of Parkersburg, Virginia, North Carolina
and South Carolina.
E == Kentucky, Tennessee, Georgia, Florida, Alabama, Mississippi,
Louisiana, east of Mississippi River.
F == Illinois, Wisconsin, Minnesota, Iowa, Missouri, north of St.
Louis and Kansas City, South and North Dakota, east of
Missouri river, Michigan, upper Peninsula.
G == Nebraska, Wyoming, Montana, North and South Dakota, east of
Missouri River, Colorado, north of Denver.
H == Arkansas, Indian Territory, Oklahoma Territory, Kansas, Colorado,
south of Denver, Texas, Panhandle, New Mexico, north of
Santa Fe.
I == Texas, except Panhandle, Louisiana, west of Mississippi River,
New Mexico, north of Santa Fe.
J == Washington, Oregon, Idaho, California, Arizona, Nevada, Utah,
New Mexico, western portion.
==============================================================
Year and average rate in mills per ton per mile.
-----------------------------------------------
Group. Region. 1897 1898 1899 1900 1901 1902
--------------------------------------------------------------
I. A 12.02 11.76 11.23 11.52 11.51 11.72
II. B 6.75 6.17 5.82 6.13 6.46 6.64
III. C 6.05 5.78 5.29 5.46 5.68 5.76
IV. D 6.48 5.92 5.94 5.95 6.41 6.50
V. E 8.64 8.35 8.07 8.08 8.02 8.16
VI. F 8.55 8.26 8.21 8.06 7.89 7.87
VII. G 11.48 11.57 11.01 10.64 10.43 9.94
VIII. H 10.79 9.61 9.68 9.64 9.71 9.78
IX. I 10.40 10.42 10.65 9.38 10.18 9.84
X. J 12.75 11.46 11.36 10.67 10.55 10.37
--------------------------------------------------------------
United States 7.98 7.53 7.24 7.29 7.50 7.57
--------------------------------------------------------------
{table continued}
===============================================================
Year and average rate in mills per ton per mile.
------------------------------------------------
Group. Region. 1903 1904 1905 1906 1907 1908(a)
---------------------------------------------------------------
I. A 11.67 11.96 11.79 11.72 11.45 11.10
II. B 6.67 6.86 6.65 6.50 6.55 6.43
III. C 6.07 6.20 6.07 5.94 5.98 5.94
IV. D 7.14 7.16 6.91 6.90 7.03 6.96
V. E 8.27 8.51 8.39 8.13 8.27 8.25
VI. F 7.74 7.79 7.66 7.45 7.43 7.35
VII. G 9.80 9.64 9.00 8.94 9.33 9.42
VIII. H 9.62 9.98 9.88 9.47 9.66 9.53
IX. I 9.74 10.00 10.96 10.09 10.51 10.02
X. J 10.05 10.36 10.98 11.03 11.63 12.04
---------------------------------------------------------------
United States 7.63 7.80 7.66 7.48 7.59 7.5
---------------------------------------------------------------
(a) Average for 1908 added from 21st annual Report of Prof. Adams.
S. T.
The foregoing shows that the average rates per ton per mile,
expressed in money, were lower in every group but one, as well as
in the whole country, in 1907 than they were in 1897. The average
for the whole country was lower in 1907 than in any other year
shown except the years 1898 to 1902, inclusive, and for three of
those years the difference was less than one-tenth of one mill. The
decrease in the general average from 1897 to 1907 was 4.89 per cent.
and the increase from 1899, the year of the lowest average, was 4.83
per cent.
So far as the quality of the ton-mile unit is affected by changes in
the geographical distribution of traffic the tendency between 1897
and 1907 was toward a higher quality, for traffic movement grew more
rapidly in the regions where rates are normally higher than it did
in the regions of lower rates. In the following statement the groups
used by the Interstate Commerce Commission are arranged with the
group in which ton-mileage increased most rapidly from 1897 to 1907
at the top, the group that increased next most rapidly in the second
line, and so on to the group that increased least rapidly at the
bottom:
Average rate per ton
Tons of freight carried one mile. Increase, per mile in mills.
Group. 1897. 1907. per cent. In 1897. In 1907.
X 3,133,623,734 11,252,450,440 259.09 12.75 11.63
VII 2,633,860,958 9,300,234,849 253.10 11.48 9.33
VIII 6,333,591,463 17,406,430,971 174.83 10.79 9.66
III 17,587,334,609 47,994,909,002 172.89 6.05 5.98
V 6,802,119,489 17,397,321,360 155.76 8.64 8.27
VI 17,393,471,480 44,318,734,155 154.80 8.55 7.43
IX 3,165,108,561 7,546,655,555 138.43 10.40 10.51
IV 4,936,635,046 11,418,243,141 131.30 6.48 7.03
II 29,579,613,559 63,455,243,659 114.52 6.75 6.55
I 3,573,663,326 6,511,166,971 82.20 12.02 11.45
-------------- --------------- ------ ----- -----
U. S. 95,139,022,225 236,601,390,103 148.69 7.98 7.59
It will be noted from the foregoing that the group in which the
average rates were highest in both 1897 and 1907 shows the most rapid
increase in traffic movement and that, with few exceptions, the
regions of higher rates show more rapid augmentation of ton-mileage.
This is exactly what might have been anticipated, for the highest
average rates are usually to be found in the regions most scantily
populated and, as these regions are filling up and are therefore
those most rapidly growing in population and industry, they
naturally show the greatest relative increases in freight tonnage.
The only notable exception is furnished by New England, a region
of high development, but where traffic movement is largely of a
character which imposes higher average rates. In the following table
the traffic increase is given for the regions that had ton-mile rate
averages above and below the average for the whole country, in 1897:
Ton mileage. Increase.
In 1897. In 1907. per cent.
Ton mile rates above
the average 43,035,439,011 113,732,994,301 164.28
Ton mile rates below
the average 52,103,583,214 122,868,395,802 135.82
-------------- --------------- ------
Total 95,139,022,255 236,601,390,103 148.69
The region with rates above the average in 1897 had 45.23 per cent.
of the total ton-mileage in that year, and 48.07 per cent. in the
year 1907. Of the total increase in traffic movement 49.98 per
cent. was in this region. The precise effect that these changes in
the geographical distribution of ton-mileage would have had upon
the average ton-mile rate for the whole country is shown by the
computation set forth in the following table:
Product of
ton-mileage of
Ton mileage Ton-mile rates of 1907 and ton-mile
Group of 1907. 1897 in mills. rates of 1897.
I 6,511,166,971 12.02 $ 78,264,226.99
II 63,455,243,659 6.75 428,322,894.70
III 47,994,909,002 6.05 290,369,199.46
IV 11,418,243,141 6.48 73,990,215.55
V 17,397,321,360 8.64 150,312,856.55
VI 44,318,734,155 8.55 378,925,177.03
VII 9,300,234,849 11.48 106,766,696.07
VIII 17,406,430,971 10.79 187,815,390.18
IX 7,546,655,555 10.40 78,485,217.77
X 11,252,450,440 12.75 143,468,743.11
--------------- ----- -----------------
United States 236,601,390,103 -- $1,916,720,617.41
By dividing the aggregate of the products in the last column of the
foregoing by the total ton-mileage shown in the second column, an
average is obtained which represents the ton-mile rate that would
have resulted in 1907 had the traffic of each group in that year
moved in precisely the same volume in which it actually moved and
had the average rates in each group been exactly the same as they
were in 1897. This shows that, under the conditions assumed, the
average ton-mile rate for the whole country would have been 8.10
mills or 0.12 mill higher than in 1897. This advance of 1.50 per
cent. would have been wholly due to the more rapid growth of traffic
in the regions of normally higher rates. The chief significance of so
small a change in so long a period is, really, to indicate that the
ton-mile unit, so far from being of rapidly changing character, is
actually, at least as far as it might be assumed to be affected by
changes in the location of traffic movement, a fairly stable unit and
thus an excellent measure of the rise or fall in rates. Whether the
same conclusion is to be derived from a study of the changes in the
proportion of the total movement made up of commodities of different
grades and naturally taking different rates is now to be made the
subject of inquiry.
Publication of the classified statistics of tonnage necessary for
such an inquiry was begun by the Interstate Commerce Commission with
the report for the year 1899. Consequently it is not practicable to
extend the inquiry to a period prior to that year. The following
statement shows the number of tons of freight of each of the
classes of commodities named which were received by the railways
for transportation in 1899, 1903 and 1907 and the proportion of the
tonnage in each class to the total number of tons carried:
Tons.
Class of commodity. 1899. 1903. 1907.
Products of agriculture 50,073,963 61,056,212 77,030,071
Products of animals 13,774,964 16,802,893 20,473,486
Products of mines 227,453,154 329,335,621 476,899,638
Products of forest 48,122,447 74,559,980 101,617,724
Manufactures 54,415,205 91,980,903 137,621,443
Merchandise 19,844,735 29,949,022 34,718,487
Miscellaneous 23,197,155 35,116,027 44,824,123
----------- ----------- -----------
Total 441,881,623 638,800,658 893,184,972
{table continued}
Percentage of
total tonnage.
Class of commodity. 1899. 1903. 1907.
Products of agriculture 11.33 9.56 8.62
Products of animals 3.12 2.63 2.29
Products of mines 51.47 51.56 53.59
Products of forest 10.89 11.67 11.38
Manufactures 13.45 14.39 15.41
Merchandise 4.49 4.69 3.89
Miscellaneous 5.25 5.50 5.02
------ ------ ------
Total 100.00 100.00 100.00
It should be observed that the foregoing statement represents tons
received for shipment regardless of the distance carried and, in
consequence, does not throw the light upon traffic movement that
would be available if it were possible to know the ton-mileage of
each class of commodities. Nevertheless, the data undoubtedly convey
some information as to the character of the ton-mile unit during the
different years and the nature of the changes in its quality which
are in progress. This will be made more evident by the following
table showing comparisons for the years 1899 and 1907:
Tons.
Increase.
Class of commodity. 1899. 1907. Amount. Per cent.
Products of agriculture 50,073,963 77,030,071 26,956,108 53.83
Products of animals 13,774,964 20,473,846 6,698,522 48.63
Products of mines 227,453,154 476,899,638 249,446,484 109.67
Products of forest 48,122,447 101,617,724 53,495,277 111.16
Manufactures 59,415,205 137,621,443 78,206,238 131.63
Merchandise 19,844,735 34,718,487 14,873,752 74.95
Miscellaneous 23,197,155 44,824,123 21,626,968 93.23
----------- ----------- ----------- ------
Total 441,881,623 893,184,972 451,303,349 102.13
Obviously the effect of the increases shown in the foregoing upon the
quality of the average ton-mile must be in proportion as they have
exceeded or fallen short of the average increase shown at the foot of
the last column. There is no question that, in general, products of
agriculture, animals, forests and mines are low-grade commodities,
or that, on the other hand, the commodities classed as manufactures,
merchandise and miscellaneous are high-grade articles. An increase
in excess of the general average increase in the first four classes
named would tend to lower the quality of the average ton-mile while
the opposite effect, that is, a raising of the quality, would result
if the last three classes should increase more rapidly than the
increase in all tonnage. Adopting this classification, the following
shows the respective increases in high-grade and low-grade tonnage:
Tons.
Increase.
Class of commodity. 1899. 1907. Amount. Per cent.
High-grade 102,457,095 217,164,053 114,706,958 111.96
Low-grade 339,424,528 676,020,919 336,596,391 99.17
----------- ----------- ----------- ------
Total 441,881,623 893,184,972 451,303,349 102.13
The considerably greater increase in the tonnage of high-grade
articles indicated by the foregoing is scarcely within the possible
margin of error in the classification, but, in any event, what the
figures certainly prove is the absence of any actually far-reaching
change in the typical or average unit of traffic. That this
conclusion extends to traffic movement is clearly probable.
PRICES AND ACTUAL RATES.
Comparisons between actual prices of commodities shipped by rail
and typical freight charges on the same articles, for 1897 and
1907, demonstrate the fact that while prices have almost uniformly
advanced the greater number of rates have remained stationary while
among those which have changed the reductions are as numerous as the
advances and exceed the latter in extent and importance.
[Mr. McCain here presents a table compiled from reports of the Bureau
of Labor of the actual prices of commodities and the rates between
principal points of shipment, occupying pp. 50-58 of his pamphlet.]
Examination of prices collected and reported by the Bureau of Labor,
giving the prices in 1899 and 1907 of 229 articles, shows that among
these 204 prices or 89.08 per cent. of the total were increased. The
rates on forty-nine of these articles were advanced an average of
13.14 per cent. and the rates on forty-eight of them were reduced
an average of 16.44 per cent. Other conclusions are shown in the
following summary table:
Aggregate Average
Per cent. percentage changes,
Item. Number. of total. of changes. per cent.
Prices--
Advanced 204 89.08 11,340 55.59
Reduced 13 5.68 330 25.38
Unchanged 12 5.24 -- --
Total 229 100.00 -- --
Rates advanced--
Prices advanced 44 19.22 606 13.77
Prices reduced 3 1.31 30 10.00
Prices unchanged 2 .87 8 4.00
Total 49 21.40 644 13.14
Rates reduced--
Prices advanced 42 18.34 708 16.86
Prices reduced 3 1.31 33 11.00
Prices unchanged 3 1.31 48 16.00
Total 48 20.96 789 16.44
Rates unchanged--
Prices advanced 118 51.52 -- --
Prices reduced 7 3.06 -- --
Prices unchanged 7 3.06 -- --
Total 132 57.64 -- --
The foregoing shows that while prices were advanced for 204 out of
229 articles, or 89.08 per cent. of the entire number included in the
table, the freight rates on the same articles, as expressed in money,
were advanced in but forty-nine instances, or 21.40 per cent. of the
total, money rates were reduced in forty-eight instances, or 20.96
per cent. of the total, and remained stationary in 118 instances, or
57.64 per cent. of the total. Of the rates advanced forty-four were
in cases in which the prices had also advanced, and of the rates
reduced forty-two applied to articles which had advanced in price.
Even as to the commodities which had advanced in price, the average
advance being over fifty-five per cent., money rates were advanced in
but forty-four instances out of 204 and the average advance was but
13.77 per cent. and there were forty-two reductions in money rates,
such reductions averaging 16.86 per cent.
SIGNIFICANCE OF THE DEPRECIATION OF MONEY.