The most common effect of cheapened transportation is to increase the
distance at which it is possible for producer and consumer to deal
with each other. To the producer it offers a wider market and to the
consumer a more varied source of supply. On the whole, cheapened
transportation is more uniformly beneficial to the consumer; its
temporary advantage to the producer very often leads to
overproduction. It has the effect also of bringing about nearly
uniform prices the world over.
The time was when nearness to market was of the greatest possible
advantage. At the present time a farmer can raise his celery in
Michigan or his beets in Dakota and market them in New York City about
as easily as though he lived on Long Island. It is no longer location
which determines the business to be carried on in a particular place,
but natural advantages more or less independent of location. But the
railroad or the steamboat very often determines where a new business
shall be developed. It is this quickening and cheapening of
transportation that has given such stimulus in the present day to the
growth of large cities. It enables them to draw cheap food from a far
larger territory, and it causes business to locate where the widest
selling connection is to be had, rather than where the goods or raw
materials are most easily procured. It is the quick and comfortable
transportation facilities which our large cities possess that have
given strength to the great shopping centres. Shoppers for thirty or
forty miles around can easily reach these centres, and the result is
that trade gathers in centres rather than at local points. A city of a
million population in the most productive agricultural section of
country could not be fed if the food had to reach the city by teaming.
With this growth of trade centres comes the increased gain of large
dealers at the expense of the small; with it comes organised
speculation and its attendant results, good and evil.
Prior to the completion of the organisation of trunk or through lines,
freight was compelled to break bulk and suffer trans-shipment at the
end of each line, where a new corporation took up the traffic and
carried it beyond. To prevent this breaking of bulk and to expedite
the carriage of freight, fast freight lines on separate capitalisation
were organised. The purpose of the interstate-commerce law is largely
to prevent discrimination and corruption in freight charges, to secure
for every person and place just and equal treatment at the hands of
the transportation companies. The freight rates are arranged and
regulated by the traffic associations, and the various conditions and
compromises necessary have made both classifications and rates about
as complicated as anything possibly could be.
The name DIFFERENTIAL as applied to freight rates refers to the
differences which are made by railroad companies. Certain roads are by
agreement allowed to charge a lower rate than others running to the
same points. To and from each of the eastern cities there are two
classes of roads--the _standard_ lines and the _differential_ lines.
The standard lines have the advantage of more direct connections; the
differential lines reach the freight destinations by circuitous
routes, in some instances by almost double the mileage. With a view to
equalising these conditions the general traffic associations allow the
differential lines to carry freight at a lower rate per mile than the
rate charged by the standard lines.
The transportation business of the United States is so varied and
complicated that a proper study of its freight tariffs and
classifications would require much more space than can be given the
subject in these lessons.