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Railroads Rates-Service-Management by Homer Bews Vanderblue & Kenneth Farwell HC
Railroads Rates-Service-Management by Homer Bews Vanderblue and Kenneth Farwell Burgess
Hard Cover Lots of underlining, some marks in the blanks areas.
488 pages
Copyright 1923
CONTENTS
PART I THE SCOPE AND MACHINERY OF REGULATION
CHAPTER I THE SUBJECT MATTER OF REGULATION: RATES, SERVICE, MANAGEMENT 3-13 Section 1. Regulation and agricultural depression, 3 -Sec. 2. State commissions, 5 - Sec. 3. Rates and charges, 7 - See. 4. Service and management, 9 - Sec. 5. Management and profits, 12 - Sec. 6. State and interstate regulations, 13.
CHAPTER II THE AGENCIES OF REGULATION 14-27 Section 1. Commission regulation, 14 - Sec. 2. State commissions and the Interstate Commerce Commission, 15 - Sec. 3. The Shreveport Case, 16 - Sec. 4. The organization of the Interstate Commerce Commission, 18 - Sec. 5. Personnel of the Commission, 19 - Sec. 6. Divisional organization, 21- Sec. 7. Bureau organization, 24.
CHAPTER III PRACTICE BEFORE COMMISSIONS 28-40 Section 1. The administrative body, 28 - Sec. 2. Informality of procedure, 29 - Sec. 3. Classes of controversies, formal and informal complaints, 31- Sec. 4. Rules of procedure, 33 - Sec. 5. Machinery of procedure, 35 - Sec. 6. General investigations and ex parte hearings, 37.
CHAPTER IV THE COMMISSIONS AND THE COURTS 41-55 Section 1. The function of the court in regulation, 41 - Sec. 2. Defined powers of commissions, 42 - Sec. 3. The Abilene Case, 44 - Sec. 4. Constitutionality of state laws, 45 - Sec. 5. The confiscation doctrine, 46 - Sec. 6. State and Federal powers, 47 - Sec. 7. The review of orders, 51 - Sec. 8. The enforcement of orders, 52 - Sec. 9. Reparation under the Interstate Commerce Act, 52.
PART II RATES
CHAPTER V THE RATE MAKING POWER . . . . . . 59-69 Section 1. Competitive rate making, 59 - Sec. 2. The Commission's rate making power, 59 - Sec. 3. Agency issues, 60 - Sec. 4. Tariff publication, 61- Sec. 5. Maximum, absolute, minimum rates, 62 - Sec. 6. The suspension power, 64 - Sec. 7. The rule of rate making, 67.
CHAPTER VI THE PUBLISHED RATE 70-83 Section 1. The publication principle, 70 - Sec. 2. Publication rules, 71- Sec. 3. The pass problem, 73 - Sec. 4. False billing, 75 - Sec. 5. "Beating the rate," 76 - Sec. 6. Legal allowances, 78 - Sec. 7. Industrial railroads and tap lines, 80.
CHAPTER VII THE ECONOMICS OF RATE MAKING 84-102 Section 1. The dual problem of reasonableness, 84 - Sec. 2. Economic peculiarities of railroads: Large specialized plant, 85 - Sec. 3. Joint costs, 86 - Sec. 4. Constant and variable costs, 88 - Sec. 5. What the traffic will bear, 90 - Sec. 6. Diversion, 93 - Sec. 7. Destruction, 93 - Sec. 8. The zone of reasonableness, 96 - Sec. 9. Classification and class rates, commodity rates, 100.
CHAPTER VIII GENERAL RATE LEVELS 103-117 Section 1. The general rate level, 103 - Sec. 2. Advanced rate cases, 1903 and 1910, 104 - Sec. 3. The Five Per Cent Case, 108 - Sec. 4. The war-time advance, 110 - Sec. 5. The Transportation Act, 117 - Sec. 6. Increased rates, 1920, 112 - Sec. 7. Decreased rates and what the traffic will bear, 113 - Sec. 8. Reduced Rates, 1922, 116.
CHAPTER IX THE EQUALIZATION PRINCIPLE 118-138 Section 1. Local discrimination and business competition, 118 - Sec. 2. Competition between common terminals, 122-Sec. 3. Cross country competition, 123 - Sec. 4. In-and-out rate adjustments, 126 - Sec. 5. The Shreveport Case, once more, 128 - Sec. 6. Common point adjustments, 128 - Sec. 7. Proportional rates as a means of equalization, "Gateway competition," 130 - Sec. 8. Port differentials, 133--Sec. 9. Transit privileges, 135.
CHAPTER X THE DISTANCE PRINCIPLE 139-156 Section 1. Distance as a measure of service, 139 - Sec. 2. Passenger rates, 139 - Sec. 3. Terminal and haulage costs, 141- Sec. 4. The tapering principle, 142 - Sec. 5. Logical rate scales, 146 - Sec. 6. Distance tables, 149 - Sec. 7. Market competition and distance rates, 150 - Sec. 8. The rate making of desperation, 155.
CHAPTER XI THE LONG AND SHORT HAUL PRINCIPLE 157-176 Section 1. The long and short haul clause, 157 - Sec. 2. Departure from the rule, 158 - Sec. 3. Control of the long haul rate, 158 - Sec. 4. Circuitous routes, 160 - Sec. 5. The fifteen per cent rule, 162 - Sec. 6. Group rates, 164 -Sec. 7. Short lines, 164 - Sec. 8. Potential water competition, 165 - Sec. 9. Character of the commodity, 168 - Sec. 10. Controlling market competition, 169 - Sec. 11. The extent of relief, 172 - Sec. 12. Relative reasonableness and the rate adjustment, 174.
CHAPTER XII GROUP RATE PRINCIPLES....177-203 Section 1. The group rate device, 177 - Sec. 2. The "distance-group rate principle," 178 - Sec. 3. Distance and differentials, 182 - Sec. 4. Lake cargo coal differentials, 187 - Sec. 5. The long and short haul principle and group rates, 189 - Sec. 6. The southern rate structure, 196 - Sec. 7. Maximum rates, 200 - Sec. 8. The transcontinental adjustment, 201.
PART III SERVICE
CHAPTER XIII THE SERVICE OBLIGATION207-222 Section 1. Rates and service: Service principles, 207 - Sec. 2. The failure of service competition, 209 - Sec. 3. The achievement of private initiative, 211- Sec. 4. Special service and economy, 214 - Sec. 5. Delay in regulating service, 217 - Sec. 6. The scope of service regulation, 219 -Sec. 7. Safety and adequacy of service, 220 - Sec. 8. Continuity of service, 221.
CHAPTER XIV REGULATION OF SAFETY AND HEALTH 223-236 Section 1. The police powers of the states, 223 - Sec. 2. Conflicting state requirements, 225 - Sec. 3. Federal Safety Appliance Act, 227 - Sec. 4. Hours of Service Law, 229 - Sec. 5. Twenty-eight Hour Live Stock Law, 229 - Sec. 6. The Boiler Inspection Act, 231- Sec. 7. The Accidents Reports Act, 232 - Sec. 8. Federal Employers' Liability Act, 233 - Sec. 9. Automatic train control, 234.
CHAPTER XV TRAINS AND TRAIN MOVEMENT 237-244 Section 1. The technical nature of operation, 237 - Sec. 2. The Transportation Act, 1920, and train service, 238 - Sec. 3. Discrimination in train service, 239 - Sec. 4. State regulations, 238 - Sec. 5. Train stop statutes, 241- Sec. 6. Speed regulations, 242 - Sec. 7. Abandonment of train service, 243.
CHAPTER XVI CAR SUPPLY AND CAR DISTRIBUTION 245-259 Section 1. Car shortage, 245 - Sec. 2. The per diem agreement, 249 - Sec. 3. Specialized equipment, 250 - Sec. 4. Car distribution, 252 - Sec. 5. Assigned car rule, 254 -Sec. 6. Duties of shippers, 257 - Car peddling, 259.
CHAPTER XVII THROUGH ROUTES AND ROUTING OF FREIGHT 260-271 Section 1. The shipper's control over routing, 260 - Sec. 2. Through routes and joint rates, 261- Sec. 3. Market competition, 262 - Sec. 4. The division of through rates, 265 - Sec. 5. The binding character of routing instructions, 268 - Sec. 6. Unrouted traffic, 270.
CHAPTER XVIII TERMINALS AND TERMINAL FACILITIES 272-281 Section 1. Importance of terminals, 272 - Sec. 2. The opening of terminals to competitors, 275 - Sec. 3. Closed and open terminals, 276 - Sec. 4. Emergency control over terminals, 279 - Sec. 5. Extension of terminals, 280.
CHAPTER XIX SPECIAL PRIVILEGES AND FACILITIES 282-292 Section 1. The publication of privileges and facilities, 282 - Sec. 2. Elevation of grain, 284 - Sec. 3. Loading and unloading of freight, 286 - Sec. 4. Transit privileges, 289 - Sec. 5. Reconsignment, 290 - Sec. 6. Service and rates, once more, 292.
CHAPTER XX NEW CONSTRUCTION AND ABANDONMENTS 293-303 Section 1. The decline of competitive building, 293 - Sec. 2. The power to require extensions, 294 - Sec. 3. The abandonment of railroad property, 299.
PART IV MANAGEMENT
CHAPTER XXI THE FUNCTION OF RAILROAD MANAGEMENT 307-319 Section 1. The obligation to earn, 307 - Sec. 2. The director system of management, 308 - Sec. 3. Railroad credit, 310 - Sec. 4. Permanent improvements and traffic congestion, 313 - Sec. 5. Unproductive improvements, 314 - Sec. 6. Financing equipment needs, 315 - Sec. 7. State regulation, 317 - Sec. 8. The dual problem of railroad management, 318.
CHAPTER XXII THE REHABILITATION OF RAILROAD CREDIT 310-334 Section 1. The transition to private control, 320 - Sec. 2. The rule of rate making, once more, 322 - Sec. 3. The recapture of excess earnings, 325 - Sec. 4. The revolving fund, 327 - Sec. 5. The carriers' share, 329 - Sec. 6. The unearned increment, 331- Sec. 7. The rule of rate making and valuation, 333.
CHAPTER XXIII RAILROAD VALUATION335-352 Section 1. The Valuation Act of 1913, 335 - Sec. 2. Smyth v. Ames, 337 - Sec. 3. The Bureau of Valuation, 338 - Sec. 4. Cost of reproduction, 341- Sec. 5. Railroad land, 343 - Sec. 6. "Other values, or elements of value," 346 - Sec. 7. The weakness of the Commission's valuations, 347 - Sec. 8. The future of the valuation, 350.
CHAPTER XXIV THE PROTECTION OF INVESTORS 353-371 Section 1. The protection of railroad income, 353 - Sec. 2. The building of new lines, 354- Sec. 3. The Wisconsin Rate Case, 353 - Sec. 4. The division of joint rates, 358 - Sec. 5. The weakness of the director system, 362 - Sec. 6. Banker management, 364 - Sec. 7. The regulation of securities, 366 - Sec. 8. Leases, 369 - Sec. 9. Civil and criminal liability, 370.
CHAPTER XXV THE ADJUSTMENT OF LABOR DISPUTES 372-397 Section 1. The railroad wage bill, 372 - Sec. 2. Federal control and labor, 373 - Sec. 3. The national agreements, 374 - Sec. 4. The Railroad Labor Board, 376 - Sec. 5. The 1920 wage advance, 381- Sec. 6. Abrogation of the national agreements, 383 - Sec. 7. The Pennsylvania election dispute, 387 - Sec. 8. Contracting of maintenance, 388 - Sec. 9. Wage reductions, 1922, 390 -Sec. 10. Cooperation, Labor Board and Interstate Commerce Commission, 396.
CHAPTER XXVI THE INTEGRITY OF THE ACCOUNTS 398-409 Section 1. The need for sound accounting, 398 - Sec. 2. Dual responsibility of railroad accounting officers, 401 - Sec. 3. Recapture of excess earnings, 402 - Sec. 4. Maintenance and depreciation, 403 - Sec. 5. Obsolescence, 405-- Sec. 6. Balance sheet items, 406 - Sec. 7. Valuation and consolidation, 408.
CHAPTER XXVII RAILROAD CONSOLIDATION.410-434 Section 1. Consolidation as a policy, 410 - Sec. 2. Competition as a governing rule, 411 - Sec. 3. Existing channels of trade and commerce, 413 - Sec. 4. Weak and strong roads, 144 - Sec. 5. The Ripley report and the Commission's scheme, 415 - Sec. 6. Official classification territory, trunk lines, 417 - Sec. 7. The South, 424 - Sec. 8. The Southwest, 417 - Sec. 9. Transcontinental competitors, 426 - Sec. 10. The organization problem, 432 - Sec. 11. The problem of the future: voluntary or compulsory consolidation, 433.
APPENDIX I DEVELOPMENT OF FEDERAL REGULATION 437-440
APPENDIX II SUGGESTED READINGS 441-448
APPENDIX III TABLE OF CASES 449-480
INDEX 481-488
LIST OF MAPS AND DIAGRAMS
PLATEPAGES
1. Equalization and Competition ..... 122, 190
2. The Missouri River Adjustment .. 126
3. Gateway Equalization 130
4. Mississippi River Crossings 130
5. Passenger Rates 140
6. Distance Rates 143
7. Cement Rates 145
8. Old "C.F.A." Class Rates 147
9. New "C.F.A." Class Rates 148
10. Circuitous Competition 161
11. The Shreveport Triangle 179
12. Width of Percentage Groups, Pennsylvania Railroad, Pittsburgh to St. Louis 181
13. Rate Structure, Chicago to Pacific Coast .... 183
14. The Texas Interstate Rate Groups ..... 186
15. Lake Cargo Coal Groups....... 188
16. Colorado Common Points 191
17. Percentage Groups 195
18. The Southern Rate Adjustment, January 1, 1916 . 199
19. Car Surplus and Car Shortage ...... 246
20. Railroad Facilities and Business, 1912-1920... 309
21. Delaware, Lackawanna & Western R. R. Co. Mortgage Map 311
22. New York Central and Pennsylvania Systems .. 418
23. Baltimore & Ohio, Erie, and Nickel Plate-Lehigh Valley Systems420
24. Southern Systems.......423
25. Rock Island-Southern Pacific System....427
26. Western Transcontinental Systems .....429
PREFACE
Railroad regulation in the United States is accomplished by an elaborate system of governmental machinery. This book is designed to give information concerning that system useful both to students and to men of affairs-to those of the general public who desire to know the present methods of regulation, to students approaching an intensive study of railroad practice, and to railroad officers whose duties have been restricted to limited fields. It is neither a law book nor a mere text on economics, but is rather a volume presenting thoughtful observations resulting from joint experience in teaching the subject matter in a university school of commerce and in active practice before courts and commissions.
The immediate occasion for this presentation is the enactment of the Transportation Act, 1920, and interpretations which are being placed upon it by courts and commissions in its practical application. This Act contains radical changes in regulatory methods. The original Act to Regulate Commerce was enacted in 1887. There have been three comprehensive amending acts: the Hepburn Act in 1906, the Mann-Elkins Act in 1910, and the Transportation Act in 1920. During the war period the Federal government operated the railroads pursuant to the Federal Control Act of March 21, 1918. To terminate Federal control and to remedy weaknesses disclosed in the prior laws, the Transportation Act, 1920, was enacted and approved February 28, 1920. It changed the title of the "Act to Regulate Commerce" to the "Interstate Commerce Act" and by amendments enlarged and supplemented the power of the Federal regulatory agency, the Interstate Commerce Commission. "The act made a new departure," declared the Supreme Court, in upholding certain of its provisions. The prior acts were directed primarily to the regulation of rates; the new act greatly extended incidental powers of regulation of service and management which had been granted to the Commission by the amendments of 1906.
It is of the present law and present system of regulation that this book treats. The general scope of the various amendatory acts is indicated by the outline reproduced in the appendix, p. 437. Important statements of fact and principle are authenticated by references to cases to enable readers who so desire to go to the sources. These citations are supplemented by an appended list of cases and by references to outstanding contributions to the literature of the subject. These references have been chosen with the needs of teachers in mind. We have sought to furnish a guide to historical discussions and to notable court or commission opinions illustrating the principles stated in the text.
For incisive criticism covering matters, both of substance and of form, we desire to acknowledge our debt to Messrs. D. H. Bremerman, Leslie Craven, George H. Burgess, George A. Hoffelder, W. E. Lagerquist, H. W. Johnson, and Walter McFarland. Dr. Julius H. Parmelee and Mr. Richard H. Johnston of the Bureau of Railway Economics have generously responded to requests for information, and Messrs. Frank J. Vanderblue and Charles L. Carroll have aided with data on rates and rate adjustments. To Dr. Arthur H. Cole we are indebted for reading the proofs.
KENNETH F. BURGESS
HOMER B. VANDERBLUE.
January, 1923.
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