THE ORANGE ROUTING CASE
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THE ORANGE ROUTING CASE: A STUDY IN COMPETITION BY WILLIAM A. BOWEN I
THE orange growers of Southern Cali fornia occupy a station singularly well placed. All. winter long, while Eastern farms are snow-bound and desolate, their gold and yellow fruit is hanging from leafy boughs, humming-birds are flitting among palms, and the air is sweet with blossoms. Cottagers, thus embowered, taking their ease in their happy valley beneath snow capped mountains, may well be thought almost unduly favored of fortune. Cer. tainly their task seems easy; they need but irrigate their groves a few times yearly, and now and then cultivate, fertilize, prune, and spray; the rest is leisure and the collection of income. Unfortunately, however, Californians cannot eat twenty-five thousand carloads of oranges in the year; and at Cali fornia's door lies the Great American Desert. Those who will buy and eat their fruit dwell a thousand, two thousand, three thousand miles away. To bring the fruit to these with profit and dispatch constitutes the crux upon which hangs the prosperity of this favored people. Two railroads hold in their hands this power of life and death: the Atchison, Topeka, and Santa Fe system, and the Southern Pacific system. The former does not carry east of Chicago, nor the latter east of Ogden, Utah, and El Paso, Texas. Beyond those points fruit must be carried by other lines. The difficulty is obvious at once. If shippers should be left to deal with initial and connecting carrier sepa rately, how would the rate be apportioned; would it not necessarily be ruinously high; how would shippers ever be able to collect claims for damages; how would initial car riers ever be able to compel prompt return of their empty cars; how would shippers ever be able to make prompt and convenient
arrangements with distant railroads? On the other hand, if the initial carriers should arrange with all the Eastern lines for a through tariff, payable by the shipper to the initial carrier, to which alone he should consign his fruit, and to which alone he should look for delivery and for damages, who would select the connecting carrier; would the shipper surrender his control of his shipment to the Western railroad; would the Eastern roads decline to be subject to the dictation of Western roads and insist upon their right to compete among the shippers for the business; and in such a case, would not empty cars be returned slowly, to the detriment of shippers and initial carriers alike? The situation was difficult in the extreme. The first plan was obviously impracticable. In adopting the second, a compromise was effected, and, up to January i, 1900, ob served. Shippers obtained a through rate, and looked to the initial carrier for through transportation; but they were allowed to select their connecting carrier, and not only to designate their preference in that regard, but even to change the destination of their freight while in transit, diverting it to such markets as should in the meantime appear to offer the best advantages. This practice came to be universally observed. It began to seem that the entire orange in dustry depended upon it: the fruit being routed by the shippers themselves, they in consequence knew at any moment where their cars were, they had a desirable per sonal relation with the connecting lines themselves, and they could at any time avail themselves of the most favorable mar ket offering. On January i, 1900, this system was de molished at one blow. Thenceforth, said
