ber of firms selling feed ingredients in New Hampshire.* Twenty-four 

 separate states and several provinces of Canada are represented in Table 6. 

 The number and location of these firms reflects primarily the supply sources 

 for New Hampshire mills. 



Milling-in-Transit Privileges. f 



One of the principal reasons why feed mills serving New Hampshire 

 can be located at various points of retail distribution in the State lies in 

 the so-called milling-in-transit privileges permitted by the railroad tariff 

 rules. 



Freight rates are commonly higher per ton-mile for short distances 

 than for long distances. This follows from the fact that rates must absorb 

 two terminal charges irrespective of the length of haul. Thus, the sum of 

 two local rates (Origin point A to Intermediate point B; Intermediate point 

 B to Destination C) exceeds a through rate (Origin point A direct to Des- 

 tination C, even through Intermediate point B). If this were the situation 

 with respect to all feed ingredients, mills would tend to locate either at 

 the source of most feed ingredients or at the point of sale of mixed feeds, 

 depending upon the comparison between rates on ingredients and mixed 

 feeds and upon other cost factors. 



Milling-in-transit privileges, however, have tended to equalize the rate 

 burden and permit the matter of mill location to be largely decided by other 

 considerations. Shipments of grain, grain products and by-products, and 

 certain related itemst carry milling-in-transit privileges, i.e., the "stopping- 

 off" of shipments of feed materials in transit at an intermediate point for 

 the purpose of processing, mixing, and reshipping to a subsequent desti- 

 nation at no increase above the through rate (other than certain incidental 

 charges for switching and transit privileges). This privilege rests upon the 

 fiction that incoming transporation to the (intermediate) transit point and 

 the outgoing transporation from the transit point, which in fact are separate 

 and distinct shipments, constitute a single continuous shipment of the identi- 

 cal article from origin to final destination. 



Rules governing transit privileges differ in the various railroad freight 

 classification territories. The single compelling factor for the difference is 

 the geographical location of the classification territory itself. New England, 

 insofar as railroad territorial classification is concerned, is geographically 

 located at the end of the line. One interesting feature of this revolves around 

 the "Boston grouping". This means that the transportation charge from 

 origin to any destination in New England is the same with the exception of 

 arbitrary points on the Maine Central and Bangor and Aroostook Railroads, 

 regardless of whether the shipment is "stopped off" at an intermediate point 

 in New England for milling-in-transit purposes or diversion, or proceeds 

 directly from origin to destination. Thus, with respect to rates on transit 

 items alone, there is practically no locational advantage to be had within 

 New England. 



* Davis, H. A. and V. F. Staab, op. cit., and Registered Ingredient List, New 

 Hampshire Department of Agriculture, October 1, 1952. 



t This section is based largely upon a paper by J. E. Bressette, General Traffic 

 Manager, Ghas. M. Cox Co., dated January 2, 1951, Explanation of Milling-in-Transit 

 Privileges as Applied in New England Territory, and correspondence with Mr. Bres- 

 sette in December, 1953, and January, 1954. 



t Including brewers' and distillers' grains, soybeans, cottonseed, linseed, meals. 



u 



