Railway Rates Research Articles

Building comparison spaces: Harold Hotelling and mathematics for economics

ABSTRACT Harold Hotelling’s (1895–1973) articles in mathematical economics from the 1930s are classics. Some are keystones of entire sub-disciplines of economic theory such as location economics [Hotelling (1929). Stability in competition. The Economic Journal, 39(153), 41–57] and natural resource economics [Hotelling (1931). Review of Review of mathematical introduction to economics, by Griffith C. Evans. The American Mathematical Monthly, 38(2), 101–103. https://doi.org/10.2307/2301858]; others are associated with significant theoretical results [Hotelling (1932). Edgeworth’s Taxation Paradox and the Nature of Demand and Supply functions. Journal of Political Economy, 40(5), 577–616; (1938). The general welfare in relation to Problems of Taxation and of Railway and Utility rates. Econometrica, 6(3), 242–269]. Yet, Hotelling’s place in the rising of mathematical economics is mostly a black hole in the history of economic thought. The present paper aims to provide a better understanding of Hotelling’s part in the history of mathematical economics. Using published as well as archival materials, it traces Hotelling’s itinerary in mathematical economics, observes Hotelling using mathematics and scrutinizes Hotelling’s methodological writings to capture the meaning of his models and concepts, in particular his concept of utility as a monetary surplus.

The level of railway rates as a factor of sustainable development of territories

This article attempts to assess the impact of the level of railway rates on the sustainable development of territories (on the example of Russia, freight and passenger rates, 2000-2018) using econometric modeling with an autoregressive model. As follows from the results obtained, in general, the statistically significant effect of the level of railway rates on the sustainable development of territories can be identified only for some indicators that assess certain aspects of sustainable development. Evaluation of the influence of the level of railway rates on integral indicators of sustainable development (on the example of the human development index) leads either to the identification of autocorrelation of the model residuals or does not give an unambiguous answer about the presence/absence of autocorrelation, which casts doubt on the conclusions on assessing the quality of the model and its coefficients.

An exploration into the relationship between management and market forces

PurposeAre business outcomes due primarily to entrepreneurial and managerial ability or are they mainly the result of business content? The purpose of this study is to explore this question by comparing the railroads of Victoria and Queensland (Australia) and the South-West and Northern Plains of America between 1881 and 1900. Given the commonalities of the four railway systems in terms of their economic orientation towards rural custom, and their marked difference in terms of ownership, one would expect similarities in their financial circumstances if outcomes were primarily determined by fluctuations in global commodity markets. Conversely, marked differences would be expected if outcomes primarily resulted from managerial initiative.Design/methodology/approachConceptually, this study is informed by the idea that social and economic outcomes are shaped by long historical movements, with meaningful structural change occurring rarely but to great effect. In exploring this concept through a comparison of the railways of Australia and the American West, the study draws on two forms of archival evidence. One source of evidence relates to railroad management, operations and finances. Figures cited come primarily from Australian railway commissioners’ reports and Poor’s Manual of the Railroads of the USA. The other source of evidence relates to agricultural statistics. These are drawn from official reports.FindingsThis study argues that effective strategic decision-making can only occur if we understand the structural changes that alter our world. In the late nineteenth century, the Australian and American railroads servicing newly settled rural regions were financial failures because management failed to appreciate the structural changes that the revolution in steam-powered transport had initiated; a revolution which resulted in commodity prices – and hence, the railway rates for farm produce – being determined by global demand and supply balances rather than by local factors. As a result, they continued a policy of expansion that was no longer financially justified.Originality/valueThis study seeks to contribute to a fundamental debate in historical studies and management about the drivers of social and economic change. Increasingly, there is acceptance of the view that historical circumstances are inherently unstable and what counts is the particular change cascading through a myriad of “events”. This study points in a contrary direction, suggesting that business outcomes are primarily determined by deep structural shifts that can be understood and steered but seldom opposed.

Regional Logistics of Procurement of the Ferrous Scrap by the Iron-and-Steel Companies of the Russian Federation

The article discusses the relevant problem of iron-and-steel companies saving on purchasing the scrap metal. The analysis of the current state of the ferrous scrap market in the Russian Federation, trends of its development, led the authors to an opportunity to reduce the cost for purchasing scrap trough the optimal distribution of the regions between Russian iron-and-steel companies where they purchase ferrous scrap. The optimization of the regional structure of the scrap procurement taking into account the regional volumes of its generation and consumption results from using the linear programming methods applying three variants of the problem statement: minimizing the total cost of the scrap delivery to the factory, minimizing the total cost of the scrap at the “export parity†price with delivery, minimizing the total cost of the scrap at the actual prices with delivery. The authors have developed software for performing the calculations. The source are the database of the JSC Russian Railways, which provides information about the transportation of the ferrous scrap between stations of the Russian Federation by railroad; railway rates guide between railway stations of the Russian Federation; statistical data on the prices for scrap metal of the type 3A in “export windows†; actual purchasing prices for the scrap of the 3A type for the range of separate companies of the Russian Federation for several years. As a result, the authors have obtained the optimal regional structure of scrap purchasing for customers in the Russian Federation. We have formulated the recommendations for individual companies regarding the optimal routes of the procurement with scrap. The study has confirmed the possibility to decrease expanses for purchasing the scrap metal for all iron-and-steel factories of the Russian Federation through the optimization of the regional structure of procurement. It is also has allowed to estimate the possibility to cut expenses by using the optimal strategies allowing to choose the region of procurement.

MODEL OF FEES CALCULATION FOR ACCESS TO TRACK INFRASTRUCTURE FACILITIES

Purpose. The purpose of the article is to develop a one- and two-element model of the fees calculation for the use of track infrastructure of Ukrainian railway transport. Methodology. On the basis of this one can consider that when planning the planned preventive track repair works and the amount of depreciation charges the guiding criterion is not the amount of progress it is the operating life of the track infrastructure facilities. The cost of PPTRW is determined on the basis of the following: the classification track repairs; typical technological processes for track repairs; technology based time standards for PPTRW; costs for the work of people, performing the PPTRW, their hourly wage rates according to the Order 98-Ts; the operating cost of machinery; regulated list; norms of expenditures and costs of materials and products (they have the largest share of the costs for repairs); railway rates; average distances for transportation of materials used during repair; standards of general production expenses and the administrative costs. Findings. The models offered in article allow executing the objective account of expenses in travelling facilities for the purpose of calculation of the proved size of indemnification and necessary size of profit, the sufficient enterprises for effective activity of a travelling infrastructure. Originality. The methodological bases of determination the fees (payments) for the use of track infrastructure on one- and two-element base taking into account the experience of railways in the EC countries and the current transport legislation were grounded. Practical value. The article proposes the one- and two-element models of calculating the fees (payments) for the TIF use, accounting the applicable requirements of European transport legislation, which provides the expense compensation and income formation, sufficient for economic incentives of the efficient operation of the TIE of Ukrainian railway transport.

Analysis of Explanatory Variables of Rail Ridership: The Situation of Rio de Janeiro

This paper aims to establish, from the variables incorporated in the bibliography, the ones potentially indicated to explain and rate the rail ridership, considering the characteristics and specificities of the suburban trains and stations of Rio de Janeiro Metropolitan Area (RJMA) as well as its environment. It will be considered the data of railway branch lines of RJMA and their links, along with the econometric models that will be determined, taking into account the explanatory variables of boarding and landing rates of train stations. Contrary to what is observed in international literature, the HDI (Human Development Index), average income and population variables present low interrelation with the following dependent variables: boarding rate, landing rate and total amount of journeys. The HDI calls our attention because it presents a negative interrelation, which strengths the idea that in Brazil the train offer does not contribute to a human development. The low correlation with the average income and population may explain the low quality of the service and the unattractive image of the train. The variables that present greater explanatory capacity of railway rates were the number of jobs in the area of influence and the numbers of extensions of the train itself. This suggests that in Rio the train plays the role of the transport that will take the employees to their workplaces, highlighting the importance of connectivity to obtain passengers.

Of Rebates and Drawbacks: The Standard Oil (N.J.) Company and the Railroads

Standard Oil formed the South Improvement Company in the fall of 1871, supposedly to negotiate “secret” discounts on published railroad tariffs and place independent refiners at a transportation cost disadvantage. We argue that discriminatory railway rates were common both before and after Standard Oil’s founding in 1870, played little or no part in its rise to prominence and were not necessarily even illegal. Rebates and drawbacks were in fact ways of sharing the efficiency gains that flowed from the dependable high-volume rail traffic Rockefeller was able to guarantee as well as from other investments that he undertook that lowered the railroads’ costs.

Conservatives and the Politics of Land: Lord Winchilsea's National Agricultural Union, 1893–1901*

The ‘land question’ played a major part in late Victorian British politics. This article focuses on Conservative engagement with land politics, paying particular attention to a pressure group that has yet to receive serious attention from scholars: the earl of Winchilsea's National Agricultural Union (NAU). Established in 1893, the NAU had a significant impact on English agrarian politics in the 1890s. Its membership open to landlords, farmers and labourers, the NAU sought to mobilise mass support behind a legislative programme, which included tax relief for agricultural land, the reduction of railway rates and old age pensions. Within two years the Union claimed over 50,000 members. At the 1895 general election, 364 candidates backed all or parts of its programme. Winchilsea tried to organise his parliamentary supporters into an ‘Agricultural Party’ to promote NAU proposals at Westminster, but this effort failed. Moreover, outside parliament, success was limited. Notwithstanding NAU claims, membership probably never exceeded about 30,000, the spread of branches was uneven, and supporters proved reluctant to contribute time or money. After 1896, the NAU declined, not long surviving Winchilsea's death in September 1898. The Union's failure sheds light on contemporary Conservatism. Winchilsea's message of cross-class unity in defence of crisis-hit agriculture sprang from an out-of-date social vision, which cast the landed elite as exemplars of chivalrous noblesse oblige. By the 1890s, this had little resonance with the Conservative party, which in terms of land politics was moving towards reform, and specifically measures for the creation of peasant proprietors.

The Political Economy of Primary Railway Construction in the Rhodesias, 1890–1911

The main trunk lines of the Rhodesian railway system were built under the aegis of Cecil Rhodes' British South Africa Company (BSA Co.) between 1890 and 1911. This article begins with an analysis of the motivations behind railway construction during this period. It argues that interpretations which set up a dichotomy between ‘Rhodes-as-imperialist’ and ‘Rhodes-as-capitalist’ are misconceived. Nevertheless, it shows how the motivations behind railway development took on a more narrowly economic and financial character after the fiasco of the Jameson Raid in 1896 put paid to Rhodes' sub-imperial ambitions.There follows an analysis of the economic and financial foundations of the BSA Co.'s regional railway monopoly. The article charts how railway construction was sustained through the manipulation of the interlocking interests of the BSA Co. and the Witwatersrand; through the creation of a ‘group structure’ of railway companies; and through the triangular relationship which developed between the BSA Co., Paulings, the monopoly contractor, and d'Erlangers, the chief broker and underwriter of railway loan (debenture) capital.Finally, two fundamental allegations made by critics of the railway policy of the BSA Co. are assessed: firstly, that debenture finance was a means of distributing disguised dividends to itself and its friends; secondly, that these disguised dividends were paid for by the settlers through exorbitant railway rates. The nature of debt within the railway monopoly, the functions of debenture finance and the imperatives which shaped rating policy are discussed. The allegations are revealed to be ill-founded. It is argued that the tensions between the settlers and the BSA Co., their interdependence notwithstanding, were rooted in conflicting perceptions of what the priorities and parameters of economic development should be.

The Freight Rates Crisis of 1907

The importance of commercial rivalry between the southern African ports for the Transvaal trade in bringing about South African unification in 1909 is well known. Most of this rivalry made itself evident in the attempts that were made to capture a larger share of the transit trade by means of reducing railway rates. A neglected aspect of this contest is the importance which sea freights could assume in securing trade for one or other of the sea ports and it is this topic which is explored from the point of view of the colony of Natal in this study.

The British Railway Rates Problem 1894–1913

The British Railway Rates Problem 1894–1913

The Relative Level of Crow's Nest Grain Rates in 1899 and in 1965

During the nineteenth century and the early part of the twentieth, the value-of-service basis for railway rates ruled unchallenged. Over the last forty years, and especially the last twenty, that system has been undermined from so many directions that it is rapidly becoming untenable. Willy-nilly, railways are being forced over to a cost-of-service basis by the competition of other carriers and by the relocation of industry. So long as they are expected to be self-supporting (and the logical problems of operating nation-wide utilities on any other basis are daunting), any traffic or service that does not pay its full costs must inevitably come under review. The cross-subsidization between different types of traffic which once took place as a matter of course is no longer possible, and railways are compelled to know their own costs and to sell their services in competition at rates based, to an ever-increasing extent, on cost. In the last fifteen years, for example, competition has converted the old class rate structure, which was the heart of value-of-service rates, into a mere shrunken survival, historically interesting, but no longer worthy of serious consideration.There are other surviving specimens of value-of-service rates, but the Crow's Nest schedule for grain rates is the only one covering a major traffic. For historic reasons, the rates, in terms of current money, are now at or below those first established at September 1899, despite the change in prices and wages in the intervening period. There are, therefore, compelling reasons to examine them now.

Clarification of Transportation - Policy Goals

The basic principle of transportation policy should be adequate, efficient transportation at reasonable, non-discriminatory cost to users. Early railway growth in the age of great territorial expansion led to a chaos of rates and services, discriminatory treatment of users, and unfair wage and labor practices by the railroads. The original objective in the regulation of railway rates and services was to prevent monopoly and to assure fair competition among the railways themselves and among the communities and industries affected. This has been implemented, but with the constant effort to fix rates which yield "cost plus fair return" to the railways while still maintaining their public-utility function. The uneven railway rate structure thus produced has coupled with vast technological change and diversification in the transportation field to encourage an array of alternative means of transportation to flourish and compete with the railways for business. Certain governmental attitudes underlying regulation have placed railways at a disadvantage in the competition. Furthermore, railway corporations themselves have followed policies of curtailment of services and merger with competing lines. The time has come for a new look, with national scope, at transport conditions with a view to returning to the original objective of regulation to provide adequate service at fair rates and with maximum preservation of competition.

The Railway Rates Tribunal

The Railway Rates Tribunal

Cars to Come

T HE LONG-RUN SOLUTION to the railway's problem of adequate earnings, and, hence, of the industry's continuing future as a private enterprise, depends upon retailoring railway services and rates, item by item, to meet the realities of present-day competition. Total railway tonnage a generation ago presented no difficulty. The large rate-making task then resided in securing and maintaining favorable market and commodity relationships and, at the same time, obtaining adequate overall revenue. At the present time, rate-making has lost all of its former power to maintain market and commodity relationships. With unregulated highway-haulers easily available to every shipper or receiver of freight, and with toll-free, regulation free barge services also available to anyone within reach of a waterway, railway rate-makers (either on the railways or as members of regulatory commissions) simply cannot enforce what they believe ought to be in the way of rates. The rate-maker's task today has become vastly more complex than it was. He is required to know what the total available tonnage is of each commodity and this does not embrace mere railway tonnage but all of it. He needs to know exactly what his competition offers and what shippers will specifically accept with regard to time and money content for various movements.

Public Opinion and the Railway Rates Question in 1886

Public Opinion and the Railway Rates Question in 1886 Get access P. M. WILLIAMS P. M. WILLIAMS Search for other works by this author on: Oxford Academic Google Scholar The English Historical Review, Volume LXVII, Issue CCLXII, January 1952, Pages 37–73, https://doi.org/10.1093/ehr/LXVII.CCLXII.37 Published: 01 January 1952

Some Notes on the Economics of Transportation

Since well before the turn of this century economists have been attempting to explain the phenomena associated with pricing in the transportation industry. Of recent years this subject has received both descriptive and prescriptive treatment at the hands of welfare economists. In the course of this paper it will be argued that the current descriptive theory is based upon a fundamental misconception of the nature of transportation output and that, in consequence, the policy prescriptions, even when they are right, are usually right for the wrong reasons.As a starting point it will be useful to recall a controversy which began with a journal article, written some sixty years ago, in which Professor Taussig was endeavouring to show that railway rates could be fitted within the framework of general price theory. He argued that the wide differentials which were apparent in the railways' charges for their services could be explained by the preponderant influence of joint costs. If this were true, the rates charged for output A would be the consequence of passive adjustments in price to changes in the output of B in response to changes in demand for the latter product. Actually Taussig argued that the commodities transported (e.g., coal and copper) were sold to different consumers and should be treated as different products. Many years later the criticisms of Professor Pigou precipitated a lengthy debate over the validity of the joint cost doctrine, Pigou contending that railway output was homogeneous and measurable in units of ton-miles.

Practice and theory of railway rates

Practice and theory of railway rates

The Railway Rates Question and the Fall of the Third Gladstone Ministry

The Railway Rates Question and the Fall of the Third Gladstone Ministry Get access W. H. G. ARMYTAGE W. H. G. ARMYTAGE Search for other works by this author on: Oxford Academic Google Scholar The English Historical Review, Volume LXV, Issue CCLIV, January 1950, Pages 18–51, https://doi.org/10.1093/ehr/LXV.CCLIV.18 Published: 01 January 1950

Farm Distribution in Nova Scotia

half of the total area is capable of agricultural utilization but such development can take place only under pressure of greatly increased market demands. Much has been written of the handicaps imposed upon Nova Scotian agriculture by tariffs, railway freight rates, and other economic factors, and while undoubtedly they have had a depressing effect which bears equally upon the whole province, in the main, the degree of agricultural development of the various parts of the province is dependent upon physiographic factors. This is clearly shown in the accompanying series of isarithmic charts based on