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Unformatted text preview: Competition and regulation. Competition among railroads led some into bankruptcy, sunk others heavily in debt, and ignited bitter rate wars. To limit competition, lines operating in the same region sometimes worked out an agreement to share the territory or divide the profit equally at the end of the year. This was known as pooling, a process that kept rates artificially high. Lacking such cooperation, the companies used various means to draw customers away from their competitors, such as paying kickbacks or rebates to large customers for using their lines and making up any losses by charging small shippers more. Because of such practices, rates were often lower for a long haul than for a short haul. For example, shipping goods from Chicago to New York, where several companies had routes, was cheaper than sending the same shipment from Buffalo to Pittsburgh, where only one...
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This note was uploaded on 11/19/2011 for the course HIST 1310 taught by Professor Marshall during the Fall '08 term at Texas State.
- Fall '08