There are thousands of varieties of freight offered to the railroads
for transportation. If each class of commodities were charged the same
freight rate per ton per mile, the charges upon many articles of prime
necessity, such as coal, lumber, and grain, would be so high as to
prevent their being moved, while the rates on goods of high value per
bulk would be much lower than they could readily pay. Classification
must precede the fixing of rate schedules. The railroads are
interested in adjusting their charges to services performed in such a
manner as to insure the greatest possible amount of traffic at rates
that are properly remunerative. The public is interested in having the
necessary revenues of the railroads so levied as to make the burdens
as light as possible. To accomplish this a careful grouping of
commodities is necessary.
The goods are usually classified in five or six large divisions. The
official classification referred to below has six classes. The first
class consists of articles of high value, the sixth class of bulky
commodities of low value, such as iron ore, lumber, grain in bulk,
etc. In practice, however, the number of classes is at least doubled.
Goods of especially high value are made to pay once and a half,
double, treble or quadruple the regular first-class rate. A commodity
is also frequently placed in more than one class, the rating of
classification being lower for car-load lots than for less than
car-load shipments. The classification is further extended by omitting
certain articles from the list of those classified. Live stock and
coal are illustrations of articles to which so-called "commodity," as
distinct from "classification," rates are given. The individual
shippers are constantly endeavouring to have their goods given
commodity rates, and the effort of the railroad companies is to reduce
the number of articles excepted from classification. Commodity tariffs
have been a fruitful source of unjust discrimination.
From this description of freight classifications it will be perceived
that the main basis upon which the grouping of commodities rests is
the relative value of the goods. The gradations cannot, however, be
made strictly according to value. The goods are frequently put into a
lower class than their value would warrant in order to stimulate their
production and shipment or to develop the industries depending upon
those articles.
At first each railroad worked out a classification of its own, and
there were practically as many classifications as there were railway
systems. The disadvantages of this soon became apparent with the
development of long-distance traffic. The multiplicity of
classifications made it difficult for shippers or purchasers to
ascertain in advance what the charges on consignments would be; there
was a constant tendency to increase the number of commodity tariffs,
and unjust personal and local discriminations were in consequence made
more numerous. It became evident that there would be great advantages
in having one uniform classification for the whole United States. This
ideal has not been reached yet, but the number of classifications has
been practically reduced to three--the official, applying to the
traffic north of the Potomac and Ohio and west of the Mississippi; the
southern, in force among the railroads in the Southern States, and the
western, which obtains in the territory west of the Mississippi River.
This amalgamation of the classifications has been brought about
chiefly by the traffic associations and as the result of the enactment
of the interstate commerce law. In order to avoid the discriminations
prohibited by that law it was necessary to abandon the system of a
separate classification for each railway. It is to be hoped that the
attainment of the ideal of uniform classification will not be long
delayed.
THE CONDUCT OF THE FREIGHT BUSINESS OF RAILROADS--TRANSPORTATION
PAPERS
The manner in which the freight business is conducted affords a good
illustration of the high degree of development to which modern
business methods have attained. Freight is accepted by each railroad
for shipment not only to all points on its own system, but also
practically to every railway station in the country, and even to many
foreign cities.
A waybill containing the initials of the number of the car used, the
name of the consignor, the name and address of the consignee, the
description and weight of the articles sent, the freight class and
rate of the goods, and the total amount of freight charges,
accompanies each shipment and is delivered to the agent at the place
to which the goods are shipped.
For the goods thus accepted for transportation, manifests, or "bills
of lading," are issued to the consignor, which, like other
representatives of property, may be transferred by the owner or may be
deposited in a bank subject to draft. Bills of lading are of two
general kinds--"straight consignment bills" and "order bills." When a
straight consignment bill of lading is issued the goods must be
delivered to the consignee or to the person to whom he may order them
delivered. An order bill of lading is one that may be transferred upon
indorsement. The following concise description of an order bill of
lading is taken from the "Book of General Instructions to Freight
Agents," issued by the Pennsylvania Railroad Company:
When freight is consigned to "Order" it is, as a rule, for the
purpose of securing the payment at destination of a draft for
the value of the property. The draft is usually attached to the
bill of lading and sent through a bank for collection from the
party at destination, who is to be notified of the arrival of
the freight. The payment of the draft secures to the payer the
possession of the bill of lading, which must be indorsed by the
party to whose order the property is consigned.