♦Commodities of low value are carried at low rates also on account of the large volume of that traffic and the slow speed of the trains. Thus coal trains run at low speed, while trains loaded with perishable goods must be run at a much higher speed, and at an increased cost.

Fixing rates according to the value of the service to the shipper, or what he can afford to pay, is called "charging what the traffic will bear." This method aims to make the charges such as to produce the most revenue to the railroads without at the same time reducing the volume of traffic. If the service is of great value to the shipper, and enables him to reap a large profit on the goods shipped, he can well afford to pay a liberal freight charge, and this will enable the railroad company to carry other and less profitable merchandise at a low rate. Expensive articles of small bulk will bear a high charge without adding much to the percentage of increase in cost caused by the carrying charges, while farm products and other bulky freight must have a low rate, or they will not be produced and shipped.

Competition must always be taken into account in fixing rates. Charges must be fixed and modified according to the varying conditions under which railway traffic is conducted. There is not only the competition of rival lines of railways, but also that of waterways. In a very large portion of the United States shippers have a choice of transportation by rail or by water upon the great lakes, rivers and canals. There is also the competition of cities and markets to be taken into account. Thus the Atlantic cities are in sharp competition with gulf ports or outlets for the products of the Northwest. A more favorable market in one city than another will influence the stream of traffic in a corresponding direction. Competition then is an important factor in determining freight rates.

Attempts have been made in various states to prescribe that freight charges shall be in proportion to distance. Such rates are termed "equal mileage rates." But these are obviously unfair since it costs a railroad company more than half as much to carry a shipment fifty miles as to carry it one hundred miles. Goods must be stored, handled and billed, the same for a short distance as for a long one. Once loaded upon the cars, they require very little care until they reach their destination. An equal mileage rate therefore is an injustice to either the railroad company or to the public.

Equal Mileage Rates

Competition

Owing to competition and other causes it was thought necessary in some cases, in order to secure business, to take freight for a through shipment at a lower rate than was charged for a local shipment - to charge less for the entire distance than for a part. This is called the "long and short haul," and would seem to be discrimination of the most unfair and objectionable kind. It was quite common in railroad management prior to the passage of the Interstate Commerce Act, by which it was made illegal in all cases when both charges were made under "substantially similar circumstances and conditions."Such discriminations have now become infrequent, and yet there are instances when the long and short haul discrimination is justifiable. To illustrate, the steamship lines doing business between New York, other North Atlantic ports and New Orleans offer such competition to the railroads that they must either make a discrimination in favor of the long and short haul or fail to secure the business. Intermediate points are not affected by the water competition. The railroads can afford to take their through business at a slight advance over actual cost of service rather than not have it. They could not reduce their local rates to the same basis without destroying their profits. Again, were railroads in the United States parallel those in Canada, a discrimination is justifiable, for if our railroads were compelled to maintain their through rates on the same basis as their local traffic, it would have the effect of sending through shipments of grain via Canada where the railroads are not under such restrictions, and would merely put profits in the pockets of foreign railroad owners. The Interstate Commerce Commission has held that competition against foreign railroads is sufficient grounds for lower rates from terminal points.

For the purpose of facilitating the shipment of freight, and especially where the property is to be shipped a long distance, over several lines of railroad, fast freight lines have been formed. Nearly all of the business from the West to the Atlantic seaboard and territory east of Buffalo and Pittsburgh is handled over fast freight lines. A few of these fast freight lines own their own cars, do their own billing and conduct their business distinct from that of the railroad companies, payLong and ing the different roads a mileage for hauling their cars. Most of the fast freight lines, however, are combinations of the railroad lines merely for the purpose of facilitating the interchange of freight, and to expedite the shipment. The railroad companies do their own billing and send a tissue copy to the fast freight office.

The cash receipts are apportioned among the different roads in proportion to the mileage of each or on other agreed bases, and in case of a claim of damages, the matter is taken up and adjusted between the roads. The fast freight line in this instance becomes a sort of clearing house for carrying out a mutual arrangement between two or more lines of railroad.

The methods of handling freight for through shipment have been so perfected that the railroads now receive goods consigned to all stations on any road, and even to many foreign cities. Upon delivery of the goods to the railroad agent the shipper or "consignor" is furnished with a receipt in the form of "Bill of Lading."Freight is shipped in two ways, "straight consignment" or "order." When a straight consignment bill is issued, the goods must be delivered to the consignee or to the person to whom he may order them delivered as his agent. Most shipments are of this class. An order bill is one that may be transferred by endorsement. Such bills are usually for the purpose of securing the payment at destination of a draft drawn for the value of the property. The draft is usually pinned to the bill of lading, and both are sent through a bank for collection. When the draft is paid the bill of lading passes to the payer. The bill of lading is also endorsed to him and he may then claim the property. A way-bill containing the number and initials of the car, names of consignor, name and address of consignee, place of shipment, place of destination, description, weight or number of articles, class and rate of freight, and total freight, is made out for each shipment, and accompanies the goods through to destination.