THE PROBLEMS OF TRANSPORTATION 99 



Prices for these goods are fixed all over the country at this figure 

 plus the arbitrary approximate cost of transportation. One object 

 is that all traffic may be kept moving outward from the producing- 

 center. For obviously any shipment inward from any other dis- 

 tributing-center is penalized not only by lower and lower prices as 

 Pittsburg is approached, but also by the increasing freight rates in 

 proportion to the distance shipped backward. Still another device 

 for correcting undue competition at ruinous distances is the adoption 

 of a scale of crossed freights between several distributing-points. 

 Thus Cleveland and Cincinnati, competing for business throughout 

 Ohio, may agree, through a Wholesale Grocers and Hardware Asso- 

 ciation, to quote prices in the intermediate territory at a fixed price, 

 freight paid; or they might agree each to figure freights as based 

 upon a third point equally distant. 



In any case the result is to give contiguity its due weight in fixing 

 the outline of trade areas tributary to each. 



Agreements between carriers often seek to obviate unnecessary 

 waste in transportation. The division of territory between the east- 

 ern and western lines in Southern States is a case in point. Thirty 

 years ago competition for trade throughout the South was very 

 keen between great cities in the East and in the Middle West. Direct 

 lines to the Northwest from Atlanta and Nashville opened up a new 

 avenue of communication with ambitious cities like Chicago, St. 

 Louis, and Cincinnati. The state of Georgia completed the Western 

 and Atlantic Railroad in 1851 for the express purpose of developing 

 this trade as Western manufactures developed. A keen rivalry 

 between routes respectively east and west of the Allegheny Moun- 

 tains into the South developed. A profitable trade on food-products 

 by a natural direct route from the Ohio west of the mountains was, 

 however, jeopardized by ruinous rates made by warring trunk lines 

 to the Northern seaboard. Corn, oats, wheat, and pork came down 

 the coast and into the South through the back door, so to speak, by 

 way of Savannah and the seaports. On the other hand, the Eastern 

 lines into the South could not earn dividends because of the retalia- 

 tory rates on manufactures made by the Western lines on goods 

 from New York and New England. Finally, in 1878, a reasonable 

 remedy was found in a division of the field and an agreement to 

 stop all absurdly circuitous long hauls in each other's natural terri- 

 tory. A line was drawn through the Northern States from Buffalo 

 to Pittsburg and Wheeling; through the South from Chattanooga 

 by Montgomery, Alabama, to Pensacola. Eastern lines were to 

 accept goods only from their side of this line to points in the South 

 also on the same side of the boundary. Western competitors were 

 to do the same. The result was the recognition of the rights of each 

 to its territory on the ground of contiguity. 



