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I know why the ICC was formed to regulate railroads but why the FCC was needed to reg phone companies in 1930s?

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I know why the ICC was formed to regulate railroads but why the FCC was needed to reg phone companies in 1930s?
Posted by trackrat888 on Saturday, February 28, 2015 2:58 PM

The ICC was formed to protect farmers from conficatorty rates on grain and produce from the railroads but why was the the FCC needed to reg phone companies and what unfair trade practices where they involved in back in the 1930s. Futhermore why was the CAB board needed to regulate airline rates at a time when few people actulay flew in the 1930s-1940s as well? This talk about "Net nutrality" has me wondering about the railroad counterparts. Are they saying to the phone companies that they cant in essence run faster trains for their best customers or for those who want to pay for it? Was this not what the N&W Big John Hopper car case was about?

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Posted by csxns on Saturday, February 28, 2015 3:05 PM

trackrat888
the N&W Big John Hopper car case was about?

That was the Southern RR.

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Posted by greyhounds on Saturday, February 28, 2015 3:34 PM

 

 

 

trackrat888
The ICC was formed to protect farmers from conficatorty rates on grain and produce from the railroads

Horsefeathers!!

Read some economic history before you make these false and inane statements.  As it is, you are part of the problem.

Start with "American Railroads: Decline and Rennaissance in the Twentieth Century" by Gallamore and Meyer.  Two PhD economists trained at Harvard.

By the time the ICC was founded in 1887, with very little power, railroad rates had been steadily falling for 20 years.  Rail freight charges were half their 1867 level in 1887.  

The ICC didn't get power over maxiumum rates until 1906 and minimum rates (the real killer) until 1920.  It was a "Progressive" power grab.  These misnamed idiots thought the government should control everything.  For better or worse.

The Progs didn't stop with rail rates.  They took over the telephone system and all radio stations.  They basically had control over all communications.  They naturally misused such power to censor criticism of the government.  The Post Office, for example, refused to deliver magazines that did not support Mr. Wilson's War.  This did happen in the United States.

Maybe you have some claims of high rail rates for farmers.  You have no evidence.  None.  You're just repeating a malicious lie.

It was a government power grab.  Nothing more.  Nothing less.  There is no way for a government to determine what a railroad rate should be.  None.

The government involvement hurt the economy and the people.  That's it.

The CAB never made any economic sense.  It was just another liberal/progressive power grab.  Jimmy Carter appointed another PhD economist, Alfred Kahn, as the head of the CAB.  Mr. Kahn recognized it as nonsense and helped get it shut down.

"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.
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Posted by ChuckCobleigh on Saturday, February 28, 2015 3:45 PM

The FCC was established by the Communications Act of 1934.  It replaced the Federal Radio Commission which was established in 1927 as a replacement for Commerce Department regulation of radio communications, broadcasting and wireless telegraph, which had more or less come about in a haphazard ad hoc manner over perhaps a 20 year period.  The initial thrust of FCC action in the thirties was the sorting out of radio broadcasting services in the country, rationalizing frequency usage and providing service in varying forms.

Phone companies were mostly state regulated, excepting where communications crossed state lines, bringing the commerce clause into play.  This led to the later phenomenon of lower interstate long distance charges than intrastate charges, for instance.

There was a time when the FCC was true to the concept of "public convenience, interest and necessity" but my own opinion is that they have in the past 30 or so years strayed from that concept a bit.SoapBox

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Posted by Paul_D_North_Jr on Saturday, February 28, 2015 3:47 PM

The late economist George W. Hilton (and others - see post above) conclusively demonstrated (see his several articles in Trains during the late 1960's and early 1970's) that the ICC was formed to help the railroads keep their [EDIT] cartel and its [END EDIT] oligopolistic pricing power (like monopoly, only with more than 1 company instead, but only a few more), instead of ruinous competition.  Think of it as the OPEC of railroads (instead of oil).   

The alleged basis or theory was that railroads, telegraph, phone, airlines, electric, water and sewer utilities, etc. were "natural monopolies".  Only 1 was sufficient to provide the needed service in terms of capacity.  Hence, the costs of building a unnecessary duplicate - usually very high, a "barrier to entry" of competitors - would be wasteful, as well as the interchange/ cooperation/ interconnection problems, etc. 

Most of those have been superseded - usually as the country's population and density grew to be able to support more than 1 company in the business - but in most places there's still only 1 set of electric wires and water and sewer pipes running down each street.

- Paul North.  

"This Fascinating Railroad Business" (title of 1943 book by Robert Selph Henry of the AAR)
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Posted by greyhounds on Saturday, February 28, 2015 6:24 PM

ll

Paul_D_North_Jr
- but in most places there's still only 1 set of electric wires and water and sewer pipes running down each street.

Yes, that's about it with this whole "Natural Monopoly" thing.  Gallamore and Meyer discuss the application of the term to railroads and purposely avoid using the term in conjuntion with railroads.  You cannot isolate a railroad geographically as you can isolate local electric power distribution.

The various governments natually went way too far with their grants of natural monopoly status. It gave the politicians and bureaucrats more power to do so.  And power is what those folks generally seek.

Electric generation and transmission to the local distribution networks can be competively organized.  As Alfred Kahn said:  "Competition, no matter how imperfect, will always produce a superior result compared to regulation."  That's why we've seen a break up of things such as electric power supply.  This break up introduces competition in lieu of regulation to generation and transmission.  This results in lower rates for the consumer than would be the case under regulation.

"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.
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Posted by blue streak 1 on Saturday, February 28, 2015 7:07 PM

Others will have to fill in the dates  ---   Simple

The governments of the world recognized that radio spectrum had to be allocated.  So a treaty was crafted to allocate the various frequencies and that any frequency would not interfeer with another country's signal in its borders. 

Provision for updating the treaty & the allocations that need revising or expanding is provided in the treaty.  Agreements have put AM . FM,  Tv,  Aviation, space frequencies into a common band among other items.  The big changes in the past few years are cell phones, GPS, WiFi, HDTV, Loran, Omega, PTC ( still a problem ),  among others.

 

The FCC is resopnsible to assign those agreeded frequencies to various parties within the USA sphere of influence.

Amazingly enough the FCC needs to regulate phone companies to prevent their equipmant from emitting more than an allowed amount of radio waves.  That applies to all electrical equipment as anything electric will emit something in some radio band.  Good example is a welder or even RR CAT especially when a loco is drawing power. arcing emits radio waves better know as interferrence.  Even hearing aids. 

Note the FCC notice on your computer that you are reading this  post  also in any electrical instruction booklet.

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Posted by samfp1943 on Saturday, February 28, 2015 7:23 PM

greyhounds wrote the following :

[snipped]"...The Progs[Progressives] didn't stop with rail rates.  They took over the telephone system and all radio stations.  They basically had control over all communications.  They naturally misused such power to censor criticism of the government.  The Post Office, for example, refused to deliver magazines that did not support Mr. Wilson's War.  This did happen in the United States..."[ snip]

[cont.] "...It was a government power grab.  Nothing more.  Nothing less.  There is no way for a government to determine what a railroad rate should be.  None..."

"...The government involvement hurt the economy and the people.  That's it..."[snip]

At the risk of starting an argument. Sigh  I would have to agree, It seems that 'History' belongs to the people who write textbooks(?)

Of some interest here in these Forums(?) The CAB was formed in (1926) was formed as part of the Air Commerce Act; the agency morphed in identity, and role several times over the years. See link @ http://www.archives.gov/research/guide-fed-records/groups/197.html

Theodore Roosevelt served four consecutive terms from 1932 to 1945 ( He conceived the 'New Deal' in 1933 to get the country moving after the ' Great Depression' by establishing many government programs, including farm relief, Social Security, unemployment insurance, and work-relief program.

In 1946, post-WWII the Country was starting to move about.  Of course, with the surplus aircraft after WWII air travel was on eveyone's minds.       The Southern Pacific offered rail travel(1946/48) to Oakland and San Fancisco area, and on their own aircraft, offered  airline travel from there to Hawaii. 

  The Santa Fe bought several C-47's, and a couple of larger C-54's.  Their airline venture was the Santa Fe Skyways (Its' HQ was in Wichita,Ks.) It flew its first flight in July of 1946 ( between California to Chicago; refueling was in Amarillo).     At oner point there was to be  flights that would meet East,and Westbound Rail Passenger services at an airport in North Central Oklahoma to fly( It was to be the 'Fly with Chico' program(?).   The passengers then flew overnight to their destinations in California, and Chicago.    It was about that time that the CAB stepped in, and cancelled the Temporary Operatons Certificate that 'Skyways' was operating on(?).      I read one report that some of their airline competitors were behind that(?).Skyways operated over two million miles accident free between 1946 and 1948.

 The Santa Fe also operated their own Bus Service (Santa Fe Trailways) for a number of years in their territory of the Southwest. They even had their own truck distribution network in the Southwest.

The Missouri Pacific  was all set to operate an airline, as well; but was shut out by the CAB that cancelled their Eagle Airline. At about the same time frame 1948(?)  They also operated a motor freight carrier for a number of years, as well, within their territory.

As greyhounds implied the Country was still aware of the monopolies that had grown in the country during the turn of the 20th Century. Both Bureaucrats and  politicians used that concern to push their own agendas to control commerce and industry. IMHO.  [my2c]

    

 

 

 

 

 

 


 

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Posted by tree68 on Saturday, February 28, 2015 9:16 PM

samfp1943
Theodore Roosevelt served four consecutive terms from 1932 to 1945

Point of order:  That was Franklin Delano Roosevelt.  Teddy was president 1901-1909.

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Posted by Paul_D_North_Jr on Saturday, February 28, 2015 9:26 PM

greyhounds
 [snipped - PDN]
Paul_D_North_Jr
- but in most places there's still only 1 set of electric wires and water and sewer pipes running down each street.

As one example of the weakness of the cartel as a result of the above: At one time there were 7 railroads from Chicago to Omaha - I believe it was Hilton who pointed that out.  Most were built as business nuisances, to force another railroad to buy them out at a premium price, lest the competition undermine said other railroad's pricing power.
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Posted by schlimm on Saturday, February 28, 2015 11:08 PM

Economic history is written by trained academic historians, not by economists such as Lattimore. Even though Hilton wrote some excellent popular railroad histories, he was an transportation economist and a damn fine one.

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Posted by greyhounds on Sunday, March 1, 2015 1:15 AM

samfp1943
As greyhounds implied the Country was still aware of the monopolies that had grown in the country during the turn of the 20th Century. Both Bureaucrats and  politicians used that concern to push their own agendas to control commerce and industry. IMHO.

I do not want to get into an argument either.

But....

What "bad" was there to remember about railroad freight rates.  Due to increased competition and newer, lower cost technology, rail freight charges had declined dramatically in the last 1/3 of the 19th century.  What did they want?  The railroads couldn't haul it for free.

I wish someone, anyone, would cite some specific examples of railroad malfeasance with regards to a high level of rates that lead to economic regulation.  I'll tell you, after about 50 years of reading on the subject, I have not come across one valid example.  I cannot prove a negative.  I cannot state that it never happened.  I'd just like to see some specific examples of such a thing.  Such examples may, in fact, exist.  I've just never come across one.

Sure, people would complain.  But so what?  There are people who complain about anything and everything.  Complaining doesn't mean the compainant is right.

The railroads did, and do, practice Ramsey pricing.  So?  That's the way organizations with a declining average cost struture, such as railroads, have to price in order to remain financially viable.  A lot of laymen and legislators didn't understand such pricing.  But because they didn't have the ability to understand the economics it doesn't mean the railroads were doing something wrong.

"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.
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Posted by samfp1943 on Sunday, March 1, 2015 10:35 AM

tree68
 
samfp1943
Theodore Roosevelt served four consecutive terms from 1932 to 1945

 

Point of order:  That was Franklin Delano Roosevelt.  Teddy was president 1901-1909.

 

Oops - Sign  Mea Culpa ! Larry ( tree68) !  

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Posted by Convicted One on Sunday, March 1, 2015 11:51 AM

trackrat888
This talk about "Net nutrality" has me wondering about the railroad counterparts. Are they saying to the phone companies that they cant in essence run faster trains for their best customers or for those who want to pay for it?

 

I'd just like to second the explanation that Paul North offered. These 'evil government concubines" of regulatory authority are as much about protecting the entities they ostensibly regulate as they are about protecting the common man from those entities.

They do so by making sure that the barrier to entry into their industry is sufficiently high as to restrict competition.

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Posted by Paul_D_North_Jr on Sunday, March 1, 2015 12:15 PM

schlimm
Economic history is written by trained academic historians, not by economists such as Lattimore. Even though Hilton wrote some excellent popular railroad histories, he was an transportation economist and a damn fine one.

Hilton was also a "licensed I.C.C. practitioner", and as such, a member of the same 'club' whose termination he was advocating ! (Must have made him as popular as a plague rat in those quarters !)

"What went wrong and what to do about it - the ICC must go", by Hilton, George W., from Trains, January 1967, pg. 36 &etc.

"What does the ICC cost you and me? - transportation is a cartel, and ICC is running it", by Hilton, George W., from Trains, October 1972, pg. 24 &etc. 

"Ralph in the roundhouse - Ralph Nader takes on the Interstate Commerce Commission", by Hilton, George W., from Trains, November 1970,  pg. 44 &etc.

Unfortunately, back in that day I never thought of going to a university where he was teaching.  Who knows what might have been then . . .  But he did lead me to take 2 very fine Anti-Trust courses as an undergrad and in graduate school, so I'm comfortable with the topic. ( Mischief  Off Topic And LOL at the clowns in various banks and trading houses, etc. who've tried to 'fix' the LIBOR, currency rates, etc. - the penalties for that kind of conduct under the Sherman Anti-Trust Act are pretty astounding - jail, treble damages, etc.)

 - Paul North. 

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Posted by schlimm on Sunday, March 1, 2015 2:54 PM

greyhounds
The railroads did, and do, practice Ramsey pricing.  So?  That's the way organizations with a declining average cost struture, such as railroads, have to price in order to remain financially viable.  A lot of laymen and legislators didn't understand such pricing.  

For those who wish to learn more:  http://www.clt.astate.edu/crbrown/ramsey.htm

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Posted by jeffhergert on Monday, March 2, 2015 10:21 AM

As one example of the weakness of the cartel as a result of the above: At one time there were 7 railroads from Chicago to Omaha - I believe it was Hilton who pointed that out.  Most were built as business nuisances, to force another railroad to buy them out at a premium price, lest the competition undermine said other railroad's pricing power.

-----

As late as 1980 there were 7 railroads operating between Chicago and Council Bluffs/Omaha: CNW, BN, RI, MILW, ICG, NW and MP.  If one counts when the MP started acquiring control of the C&EI in the 1960s, for a short time there would've been 8.  The 8th being the CGW which went into the CNW in 1968.

I think the real reason for some of the railroads building to CB/Omaha was to tap the bridge traffic to and from the UP.  For a while before it was outlawed, the various railroads agreed to pool that traffic.  To this day, there is still a yard in the UP's original CB complex called the "pool yard."  They still refer to a couple of tracks by the railroad (Q and Rock) that the specific tracks were used for.

Today there are 4: UP, BNSF, CN, and IAIS.

Jeff

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Posted by trackrat888 on Monday, March 2, 2015 1:07 PM

From what i recall back from college was that railroads would give secret rebates to their favorite customers and have prefered interchange points for favorite custumers. This made it unfair to smaller shippers who would be put out of buisness. One shoe company that relied on rail would get a better rate and faster service at the expence of another. Thus the ICC came in as referee and to enforce "Common Carreir".---Fast Forward 100 years,,,Phone Companies are accused of giving certain custumers faster service on the internet and there pages load up faster. So big INC.s like the Airlines,General Moters and Online retailers like LL.Bean get faster service then your moms online cookie buisness and at a cheaper rate because the big boys are willing to pay more for the service. Small online buisness is complaining that this is unfair because they get more broadband capasity because the big boys have more $$$ and are willing to pay more. But in reality they are getting a wholesale data rate that may be cheaper then what you and I pay and may be geting secret rebates from Verison and Sprint. Hence the Idea of "Common Carrier" which means everyone gets the same service.-----That being said I remember the Big  Black Phone in my house in the 1980s even though the tech for vidio and data phones and cell phones had existed since the 1960s--I am afraid that the FCC will throttle down the internet and we will be stuck in a timewarp for the next 30 years and at worst they will require a paid licence for a ISP.      

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Posted by Convicted One on Monday, March 2, 2015 1:40 PM

jeffhergert
I think the real reason for some of the railroads building to CB/Omaha was to tap the bridge traffic to and from the UP

 

I've read that was the main reason Gould built the Wabash line from Bement to Chicago to compete with Burlington for UP bridge traffic from Omaha to points east.

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Posted by trackrat888 on Monday, March 2, 2015 2:11 PM

Just between New York City and Buffalo we had the New York Central,Erie,Laccawanna,Pennsy(on a round about way),B&O(Also on a round about way) and the Lehigh Valley, Plus 2 Interurban Lines and the Erie Canal

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Posted by Ulrich on Monday, March 2, 2015 3:07 PM

Some time ago I read "The Octopus" by Frank Norris. It's an American classic set in 1880's California. The premise of the book was a railroad (the Southern Pacific but not named as such in the book) that was using its monopoly to drive the farmers in central CA out of business. The book was fictional but based on actual events. I'm not sure if these events had anything to do with subsequent economic regulation or the formation of the ICC.

 

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Posted by Anonymous on Monday, March 2, 2015 3:55 PM
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Posted by tree68 on Monday, March 2, 2015 4:00 PM

trackrat888
Just between New York City and Buffalo we had the New York Central,Erie,Lackawanna,Pennsy(on a round about way),B&O(Also on a round about way) and the Lehigh Valley, Plus 2 Interurban Lines and the Erie Canal

Can't forget the West Shore...

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Posted by Paul_D_North_Jr on Monday, March 2, 2015 4:05 PM

jeffhergert

(Quote from Paul North) As one example of the weakness of the cartel as a result of the above: At one time there were 7 railroads from Chicago to Omaha - I believe it was Hilton who pointed that out.  Most were built as business nuisances, to force another railroad to buy them out at a premium price, lest the competition undermine said other railroad's pricing power.

-----

As late as 1980 there were 7 railroads operating between Chicago and Council Bluffs/Omaha: CNW, BN, RI, MILW, ICG, NW and MP.  If one counts when the MP started acquiring control of the C&EI in the 1960s, for a short time there would've been 8.  The 8th being the CGW which went into the CNW in 1968.

I think the real reason for some of the railroads building to CB/Omaha was to tap the bridge traffic to and from the UP.  For a while before it was outlawed, the various railroads agreed to pool that traffic.  To this day, there is still a yard in the UP's original CB complex called the "pool yard."  They still refer to a couple of tracks by the railroad (Q and Rock) that the specific tracks were used for.

Today there are 4: UP, BNSF, CN, and IAIS.

Jeff

Thanks, Jeff - that's exactly what I had in mind.  I'd left the 'pool' part out, too, but your description reads better and brings it more to life than even Hilton's.  Bow

- Paul North. 

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Posted by narig01 on Tuesday, March 3, 2015 12:12 AM
The FCC sets standards for communications. One of the problems with sending a signal in the electro magnetic range is the problems of interference with other nearby users. The FCC sets the standards so that different users do nit interfere with each other. As an example if one has a "noisy" hair dryer it is possible to interfere with wire telephone lines and under certain conditions cell phones computer data signals internet data lines aircraft radios and transponders and all manor of things. Setting standards is an important part of what the FCC does. And it has become a goodly sized bureaucracy. Dealing with telecommunications issues is the FCC 's reason for existence. Sometimes the issues can be something only government can deal with. Unless you want ti to back to the 1870's and 1880's when railroads dealt with the issues by use of guns bullets and dynamite. For good or bad some regulation is needed. The alternative is anarchy. Try also to remember the CAB's predecessor also promoted air travel amongst other things. Now the blue sky is close to the wild west and caveat emptor. Rgds IGN
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Posted by greyhounds on Tuesday, March 3, 2015 12:36 AM

schlimm

 

 
greyhounds
The railroads did, and do, practice Ramsey pricing.  So?  That's the way organizations with a declining average cost struture, such as railroads, have to price in order to remain financially viable.  A lot of laymen and legislators didn't understand such pricing.  

 

For those who wish to learn more:  http://www.clt.astate.edu/crbrown/ramsey.htm

 

Thank you for the link.  There are many ways to explain things and this link is a good primer.

I'd like to add some things.  

The link's author says that this type of government price control was used for regulated industries.  He gives that "Value of Service/Commodity" system used by the Interstate Commerce Commission as an example.

I'll state that it is the cost structure of the organization, not its regulatory status, that determines the use of Ramsey pricing.  I think the author is conflating the "Natural Monopoly" type cost structure (which railroads have) with regulatory status.  He seems to assume that all firms with such cost structures will be declared natural monopolies and regulated as such.

The governments sure tried to do this with railroads.  The failure of such regulation was spectaculor.  Railroads may be natural monopolies in cost structure, but they can't be granted monopoly status by law or regulation.  They cannot be granted exemption from competiton based on a geographic service area.  They are always in some sort of competitive situation.  It is impossible to geographically isolate a railroad as can be done with such things as the distribution of electricity.

The author cites higher rates on high value goods shiped by rail as an example.  This was possible before the advent of motor freight competition.  A high freight rate had minimal effect on high value goods, such as watches.  It accounted for a very small amout of the final price per watch to the consumer.  The railroads could charge a high rate for moving the watches because the effects on the demand for transportation of watches was minimally effected by such a rate.  (That is:  the transportation of watches as relatively inelastic.  Watch shipments were not all that sensative to freight rates.)

Conversely, the railroads could not charge high rates for the movement of low value commodities, such as wheat.  Transportation costs represented a very significant portion of the delivered cost of wheat.  A freight charge that would have little, if any, effect on watches could preclude or cripple wheat shipments.  Wheat transportation was much more elastic (price sensative) that watch transportation.

The railroads had figured this out an adopted a Ramsey pricing system well before regulation.  It was benificial to the nation's economy.  It allowed both the watches and the wheat to move in commerce while also allowing the railroads to be financially successful and grow.

When regulation came about the regulators adopted the exiting rail pricing system.  What else could they do?  There was not, and is not, any other system that can work.  Unfortunately, but not surprisingly, the lawyers and (generally unqualified) bureacrats who did the regulation failed to grasp the reasoning behind the pricing structure.  It was all based to the various relative elasticities for the transportation of the various products/commodities.  The regulators enshrined the "Rate Structure" in terms of legal precedents, not in terms of economic reality.

They followed these legal precedents to the end.  They failed miserably to understand that the relative elasticities could, and did, change.  In particular, the advent of motor freight in the 1920's changed the elasticities but not the legal precidents.  Time after time, the regulators rulled that the railroads could not lower their rates on high valued products to levels that were competitive with motor freight.

This lead to more diversion of freight and revenue to trucking than would have otherwise been the case and eventually took a good part of railroading into insolvancy.  It also precluded the configuation of our national logistics system into its most efficient structure.  This hurt the economy and the people.

In addition to slavisly following the value of commodity system to disaster, the government simply denied the very existance of another form of valid rate differentiation.  Some locations have natural, undeniable, cost advantages when it comes to transportation.  An ocean port has more competitive options (resulting in lower charges) than an inland city.  The freight to/from the port was much more price sensitive (eleastic) than freight to an inland location.  When the railroads tried to price in accordance with this reality laymen and legistators went nuts.

The laymen and legislators sought to "Substitute mileposts for brains."  They basically outlawed this reality.  This too was enforced by the regulators to the end.

 

 

"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.
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Posted by greyhounds on Tuesday, March 3, 2015 12:58 AM

Ulrich

Some time ago I read "The Octopus" by Frank Norris. It's an American classic set in 1880's California. The premise of the book was a railroad (the Southern Pacific but not named as such in the book) that was using its monopoly to drive the farmers in central CA out of business. The book was fictional but based on actual events. I'm not sure if these events had anything to do with subsequent economic regulation or the formation of the ICC.

 

 

It's work of fiction that stands reality on its head.  Norris wrote a sensational novel with the railroad as the vilain.  It may have been good fiction but it was not good history.

Unfortunately, people continue to treat it as a history text instead of what it is.  It is sensationalized fiction.  

See "Sunset Limited: The Southern Pacific Railroad and the Development of the American West, 1850-1930" by Richard Orsi for a historian's account.  

Orsi's (a PhD historian retired from Cal State Hayward) history differs greatly from the fiction of Norris.

"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.
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Posted by schlimm on Tuesday, March 3, 2015 8:15 AM

greyhounds

 

 
Ulrich

Some time ago I read "The Octopus" by Frank Norris. It's an American classic set in 1880's California. The premise of the book was a railroad (the Southern Pacific but not named as such in the book) that was using its monopoly to drive the farmers in central CA out of business. The book was fictional but based on actual events. I'm not sure if these events had anything to do with subsequent economic regulation or the formation of the ICC.

 

 

 

 

It's work of fiction that stands reality on its head.  Norris wrote a sensational novel with the railroad as the vilain.  It may have been good fiction but it was not good history.

Unfortunately, people continue to treat it as a history text instead of what it is.  It is sensationalized fiction.  

See "Sunset Limited: The Southern Pacific Railroad and the Development of the American West, 1850-1930" by Richard Orsi for a historian's account.  

Orsi's (a PhD historian retired from Cal State Hayward) history differs greatly from the fiction of Norris.

 

Yes, The Octopus is fiction, but Norris was able to interview many farmers who were impacted. The novel is based on the actual Muscle Slough tragedy.  It has more to do with real estate than railroad operations.  Although Norris was a so-called muckraker, to dismiss him is foolish.  Orsi is a revisionist, and makes a useful contribution.   But even in favorable reviews in journals, it is clear he was unable to show the octopus is just a nasty myth:


"It has been a long time coming. Beginning in 1975, Orsi, a professor of history at California State University, East Bay, and a longtime editor of California History, began a prolonged assault on what he calls the “Octopus Myth,” the anti-corporate Progressive Era paradigm that dominated both popular and scholarly interpretations of Southern Pacific history for most of the twentieth century. Following the influential leads of novelist Frank Norris and the early historian Matthew Josephson, the great majority of railroad commentators have invariably condemned the Southern Pacific as a grasping “Octopus” and vilified its owners, the so-called Big Four, as diabolical “Robber Barons.”

Although the much-maligned Big Four have always managed to attract their share of admirers and defenders, none have proven more dedicated or persuasive than Orsi. In a series of trenchant articles and a pair of chapters in his hugely successful California history textbook, The Elusive Eden (first edition, 1988), Orsi has persistently and tirelessly built up the pro-railroad case he now presents fully for the first time in Sunset Limited.

Significantly, however, while he consistently refers to the “Octopus Myth,” it remains clear to any careful reader that the Octopus was, in fact, no myth after all, despite Orsi’s obvious exasperation with that still popular perception. Only on occasion does Orsi directly challenge any of the numerous allegations that have been leveled against the Southern Pacific throughout its very controversial history. Indeed, most of the manifold sins and transgressions of the railroad are too well documented to be refuted. Accordingly, Orsi’s revisionism depends much more heavily on balancing the books rather than purging the debit side of the historical ledger.

Conceding or simply ignoring most of the points scored by previous critics, Orsi’s innovative approach is to leave old arguments behind and to explore new, and more positive, ground."

 

C&NW, CA&E, MILW, CGW and IC fan

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Posted by cx500 on Tuesday, March 3, 2015 10:49 AM

Just as an addendum to Greyhound's post discussing Ramsey pricing, another factor influencing higher freight rates for high valued items is that unfortunate item known as Freight Claims.  Whether by petty theft or complete destruction in a derailment, that hypothetical business of carloads of Swiss watches has the potential to cost the railroad a lot more than carloads of grain or coal.

I have no idea if there is any attempt to adjust freight rates for intermodal to accommodate differences; most likely it is just assumed that most of that traffic tends to the higher end of the value spectrum.

John

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Posted by greyhounds on Tuesday, March 3, 2015 11:29 PM

schlimm
Only on occasion does Orsi directly challenge any of the numerous allemgations that have been leveled against the Southern Pacific throughout its very controversial history. Indeed, most of the manifold sins and transgressions of the railroad are too well documented to be refuted. Accordingly, Orsi’s revisionism depends much more heavily on balancing the books rather than purging the debit side of the historical ledger.

I'd like to see a source for this writing.

I'd also like to see some specifics regarding the "manifold sins and transgressions of the railroad",  which the writer leaves unspecified.

I do not claim that the SP was run by a bunch of little angles.  But here they've been pronounced guilty with no specific charges.   There are two sides to a story and unless we know what is being charged it is impossible to understand what really happened.  What, specifically, did they do and when did they do it?

I've seen too many cases where a legitimate, honest, normal business practice has been vilified because people either don't like the result or don't understand what is being done and/or why it is being done.

In making charges such as these, there need to be some specifics.

"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.

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