OCR Text |
Show seek movement by water at the lowest possible transportation cost, that inland waterways are peculiarly valuable assets to agriculture and in- dustry. The contention of the railroads that the benefits of transporting these commodities on the inland waterways are absorbed by a few shippers and not passed along to the public is similarly contra- dicted by facts. It is, for instance, conceded that the economies of moving bulk commodities on the Great Lakes and the oceans, either in the vessels of large private carriers or common carriers, are reflected in lower prices to the public generally. Steel prices are admittedly lower because of the cheap water movement of ore on the Great Lakes and of coal on the Monongahela and Ohio Rivers to the steel mills. The price of Appalachian coal in the Northwest reflects the low cost of moving the coal on the Lakes. The farmers in Minnesota and the Dakotas get higher prices for their grain, which moves at low water rates from Duluth and Chicago to Buffalo and New York. The same conditions apply to water transportation of bulk commodities on the rivers. It is no more possible for shippers on the rivers to retain the benefits of low water rates for them- selves than it is for lake or ocean shippers to retain the benefits of low water rates. Under the old basing-point system, delivered prices on steel were generally quoted on the basis of rail rates, even when the shipments moved by water, so that the producers would retain the profits resulting from the savings below the rail transportation costs. Now the universal practice is to give the buyer of the steel the benefit of the lower water rates when he ships by river. When grain began to move by barge from river elevators on the upper Missis- sippi and Illinois Rivers to Chicago and other markets, the elevators purchasing the grain tried at first to keep the profits resulting from the lower river rates. Competition soon forced them to give the benefit of the lower rates to the farmers in higher prices bid for the grain, amounting to 3 to 5 cents per bushel above the prices paid on all- rail shipment. Prices of petroleum are often cited as evidence that the consumer gets no benefit of lower rates from water transportation. Although the great preponderance of petroleum movement is by water or pipeline, prices of finished products to consumers are traditionally based on rail rate relationships from refineries to consuming points. It is made to appear that the consumer receives no benefit from the low transportation cost by pipeline or water, but the oil industry insists that over-all savings from transportation are reflected in over-all prices. If this were not true, those who advance this argument point out, their profits would be ex- cessive and would be reflected in correspond- ingly abnormal tax recovery. Specific cases are cited, such as at Spokane, Wash., where the use of waterways was followed by price cuts. Fur- ther supporting the refineries' contention is the fact that, when the water movements of petro- leum from Texas ports to the North Atlantic Sea- board were stopped by hostile submarines, the Government paid the companies, as a subsidy, the difference between the normal lower water costs and the higher charges of shipment by railroad, through a transportation pool arrangement. Objection is sometimes made that river chan- nels can be directly used only by a limited num- ber of industries located on the river banks, whereas rail lines reach everywhere. This ob- jection applies to all water transportation, on the Great Lakes and oceans as well as the rivers. It has not reduced the value of Great Lakes and ocean transportation. Most water commerce re- quires additional transportation by land carriers. One of the main problems to be solved in securing the optimum public benefits from water trans- portation is to coordinate it with land transporta- tion, so that it will be useful to shippers and re- ceivers of freight away from the water, as well as to those on the waterways. Importance in National Emergencies Discussion of inland and intracoastal water- ways would not be complete without some ref- erence to their value in time of military emer- gency. It is in such emergencies that time, ma- terials, and manpower become the economic 209 |