THE FREIGHT-RATE SITUATION In the reports on other North Atlantic ports a brief history of the port differentials, as between Boston, New York, Philadelphia, and Baltimore, is given. The issue involving these differentials is of long standing, having first come under adjustment in 1869, when the carriers agreed upon a grain differential of 10 cents per 100 pounds in favor of Baltimore. On April 13, 1876, by an agreement between carriers, differentials took the form of percentages based upon distances from the competing ports to western common points. The New York Central & Hudson River Railroad and the Erie Railroad withdrew from this agreement shortly afterward. On April 5, 1877, an agreement was signed which has since been observed in fixing the North Atlantic port differentials. The express purpose of the agreement was to avoid all future misunderstandings with respect to the advantages or disadvantages of the cities of Baltimore, Philadelphia, and New York as affected by rail and ocean transportation and with the view of effecting an equalization of the aggregate cost of rail and ocean transportation between all competitive points in the West, Northwest, and Southwest, and all domestic or foreign ports reached through the cities named. Further arbitrations and adjustments took place in 1882, 1887, and 1888. Norfolk and Newport News were not directly concerned in these agreements. Rates at these ports were maintained on the Baltimore basis through the agency of the Chesapeake & Ohio Railway and the Norfolk & Western Railway, which carriers arbitrarily met the changes affecting their competitor to the north. In 1899 they were given the Baltimore rate on export grain and flour. At the present time, however, the New York basis of ex-lake grain rates applies to Hampton Roads. Norfolk and Newport News were mentioned in the complaint of the Chamber of Commerce of the State of New York et al. v. New York Central & Hudson River Railroad Co. et al. (I. C. C. Opinion No. 1916, June 4, 1912), but they were not considered at the trial. In this case it was held that: Differentials under New York on import traffic all-rail, and lake-and-rail, from Philadelphia and Baltimore to differential territory, should be no greater than those which existed in the latter part of 1908, to-wit, in cents per 100 pounds— And that the import rates from Boston should not be lower than from New York. 52690°-27-15 217 In the case of the Maritime Association of Boston Chamber of Commerce et al. v. Ann Arbor Railroad Co. et al. (I. C. C. No. 13548), decided February 3, 1925, the question of port differentials was again brought before the commission. As in previous cases, the issue concerned the North Atlantic ports from Boston to Baltimore. The commission said, however, that: The distance from points in differential territory to Norfolk are in general considerably greater than they are to Baltimore, yet to a large extent the export rates and the domestic rates, and to a lesser extent the import rates, are the same to both ports. This comes about because the Chesapeake & Ohio and the Norfolk & Western, particularly the former, have direct lines to Norfolk from certain points in differential territory and do not serve Baltimore, except in connection with circuitous routes. If they constituted or participated in rate-making routes to Baltimore as well as to Norfolk, we might, upon complaint, require greater observance of distance in the rates to these ports. Having no control over the Baltimore rates, they may equalize these rates at Norfolk without being guilty of unduly preferring Norfolk over Baltimore. We have held that we can not prohibit carriers from meeting competition in this way so long as they are not guilty of undue preference and prejudice and so long as they do not charge rates which are so unreasonably low that they burden other traffic. On the other hand, we can not require carriers to meet competition. Throughout the history of the development of port differentials the Hampton Roads ports were not given any considerable notice and their differentials, as existing to-day, are the result of the separate actions of the several carriers serving them. The following tables show the class-rate situation at Norfolk and Newport News on import and export traffic. Using Chicago as a basing point, it will be seen that on import traffic taking first-class rates, these ports have a differential of 16 cents per 100 pounds under New York; 10 cents under Philadelphia, and 8 cents under Baltimore. The spread between Hampton Roads and the other North Atlantic ports tapers off in the lower classes and for class 6 amounts to 5 cents below New York, 3 cents below Philadelphia, and 2 cents below Baltimore. The South Atlantic ports, on the other hand, have a differential of one-half to 1 cent per 100 pounds under Hampton Roads, varying with the class. On export traffic from Chicago, Hampton Roads is on a parity with Baltimore, both being 3 cents per 100 pounds under New York and 1 cent per 100 pounds under Philadelphia on all classes. The differential in favor of the South Atlantic ports on this traffic varies from 4 cents per 100 pounds for first-class traffic, to 12 cents for third class. Fourth-class rates are on a parity, and on fifth and sixth class. rates Baltimore and Norfolk have an advantage of one-half cent per 100 pounds under South Atlantic ports. |