The same principle is being applied as rapidly as possible in the and freight terminals, consolidation of freight terminals. The saving of switching costs that will result and the greater rapidity with which cars can be loaded and unloaded are obvious. shortening routes. Recognizing the fact that a straight line is the shortest distance and the between two points, extensive studies have been made with the pur- of freight pose of developing well-graded routes for the transportation of freight that will be shorter than those previously in use. Great progress has been made in this direction, especially in the West, and many new through lines are being developed. One of them from Los Angeles to Dallas and Fort Worth is over 500 miles shorter than the routing via the Southern Pacific lines formerly much used. . . . ... 168. The Transportation Act of 19201 Federal administration of the nation's railroads proved to be shortlived, the roads being returned to private control in the spring of 1920. However, government administration had emphasized the desirability of certain changes in the legislation regulating railroads. Accordingly, the Transportation Act of 1920 was passed. This law was designed to safeguard the roads during the readjustment period after the war, and to take advantage of some of the lessons of government administration. Some of the significant provisions of the Transportation Act of 1920 follow: The rail roads returned to private control. The Transportation Act of 1920. furnish safe and ade SEC. 401 (11) It shall be the duty of every carrier by rail- Duty to road subject to this Act to furnish safe and adequate car service, and to establish, observe, and enforce just and reasonable rules, quate car regulations, and practices with respect to car service. (12) It shall also be the duty of every carrier by railroad to make just and reasonable distribution of cars for transportation of coal among the coal mines served by it, whether located upon its line or lines or customarily dependent upon it for car supply. (15) [In case of shortage of equipment, congestion or other emergency, the Interstate Commerce Commission may] (a) suspend the operation of any or all rules . . . for such time as may be determined by the Commission; [and (b) may] make such just and reasonable 1 From the Statutes of the United States, Transportation Act of 1920, Sections 401, 405, and 407. service, and to supply coal mines with cars. Increased powers of the Inter state Commerce Com mission in emergencies. The Commission given power to control the extension and abandonment of lines. Interchange of facilities. ... directions with respect to car service, without regard to the ownership as between carriers of locomotives, cars and other vehicles, during such emergency as in its opinion will best promote the service in the interest of the public. . . . [In pursuance of this power, the Commission may] require such joint or common use of terminals . . . as in its opinion will best meet the emergency and serve the public interest. [The Commission may also, in such case,] give directions for preference or priority in transportation, embargoes, or movement of traffic under permits, at such time and for such periods as it may determine. . . ... (16) Whenever the Commission is of opinion that any carrier by railroad subject to this Act is for any reason unable to transport the traffic offered it so as properly to serve the public, [the Commission may] make such just and reasonable directions with respect to the handling, routing, and movement of the traffic of such carrier . . . as in the opinion of the Commission will best promote the service in the interest of the public. . . . (18) [Hereafter no railroad] shall undertake the extension of its line of railroad, or the construction of a new line of railroad, or shall acquire or operate any line of railroad, or extension thereof, . . '. unless and until there shall first have been obtained from the Commission a certificate that the present or future public convenience and necessity require or will require the construction, or operation. . . of such additional or extended line of [railroad. And] no carrier by railroad . . . shall abandon all or any portion of a line of railroad, or the operation thereof, unless and until there shall first have been obtained from the Commission a certificate that the present or future public convenience and necessity permit of such abandonment. . . . SEC. 405 ... (3) All carriers . . . shall, according to their respective powers, afford all reasonable, proper, and equal facilities for the interchange of traffic between their respective lines, and for the receiving, forwarding, and delivering of passengers or property to and from their several lines and those connecting therewith. . . . (4) If the Commission finds it to be in the public interest and to of terminals. be practicable, without substantially impairing the ability of a carrier owning or entitled to the enjoyment of terminal facilities to handle Common use its own business, it shall have power to require the use of any such terminal facilities. . . by another carrier or other carriers. SEC. 407 ... mission empowered to plan the (4) The Commission shall as soon as practicable The Comprepare and adopt a plan for the consolidation of the railway properties of the continental United States into a limited number of systems. In the division of such railways into such systems under such plan, competition shall be preserved as fully as possible, and nation's wherever practicable the existing routes and channels of trade and commerce shall be maintained. Questions on the foregoing Readings 1. Into what two classes may public utilities be divided? 2. In what way does the railroad corporation differ from the ordinary corporation? 3. What was Judge Russell's opinion in this regard? 4. What are the reciprocal obligations of the railroad and the state? 5. What two factors have stimulated the movement for the municipal ownership of local utilities? 6. What is the extent of municipal ownership with respect to water works? 7. Why has the movement been relatively slow in the manufacture of gas? 8. What is the extent of municipal ownership in the street railway business? 9. What did the Commission on Public Ownership and Operation conclude as to which industries should be operated by the public, and which should not be so operated? 10. What, according to the Commission, are the chief factors which will determine the future development of municipal ownership? 11. Name some complaints against the railroads with respect to rates. 12. What charges were brought against the railroads with respect to discriminations? 13. What is meant by saying that formerly the railroads avoided their responsibility as carriers? 14. What charge was brought against the railroads with respect to extravagance? 15. During what period of our history were the railroads placed under governmental control? 16. What, according to the Director-General of the Railroads, were the economies of governmental administration with respect to the elimination of unnecessary passenger trains? consolidation of the railroads. 17. What saving was effected in the use of ticket offices? 18. How were passenger and freight terminals utilized more advantageously under government administration? 19. Name an important saving with respect to the utilization of freight routes. 20. What important railroad legislation was enacted in 1920? 21. What did this act say with regard to the duty of common carriers to furnish car service? 22. How did the act increase the powers of the Interstate Commerce Commission in time of emergency? 23. Explain the extent to which the act gave the Commission control over the extension and abandonment of lines. 24. What did the act say regarding the use of terminals by carriers not owning those terminals? 25. What provision was made for the consolidation of the nation's railroads? CHAPTER XXIX THE TARIFF 169. The basis of international trade 1 question a phase of the problem of inter The tariff question is a phase of the larger problem of international The tariff trade. International trade is a wide-spread and persistent phenomenon, and, like domestic trade, is based upon the instinct of peoples to exchange products which they want relatively little for products which they want relatively much. In the following selection, Pro- trade. fessor Alvin S. Johnson discusses international trade as the fundamental basis of the tariff question: national tween different parts of the same country compared with trade between nations. From early modern times, when men first began to think sys- Trade betematically upon economic subjects, a great deal of attention has been bestowed upon the exchange of goods between persons living under different governments, or international trade. It was for a long time believed (and it is still widely believed) that such trade differs radically in its nature from trade that is carried on within the limits of a single country. While the latter, it is generally admitted, is an unmixed good, and ought to be encouraged, or at any rate granted the most perfect freedom by government, the former, many believe, is often a doubtful blessing and ought to be closely scrutinized and regulated, and, under many circumstances, discouraged or even prohibited. . . . All permanent trade is based upon differences in character of Permanent productive powers. ... trade based on differ ences in productive powers. One region may have excellent mineral deposits but lack fertile land for the growing of food; another region may be quite devoid of minerals, but abundantly supplied with rich lands. In one region the character of the population may be such as to fit it for kinds of Illustrations. 1 From Alvin S. Johnson, Introduction to Economics. D. C. Heath & Co., 1909; pp. 324-328. |