Anthony Thompson <thompson@...>
Al Westerfield wrote:
The worst problem in my opinion was that the per diem that the railroads had pay to haul long distance shipments in the leased cars was so great that the lessees' lease cost was more than covered by the per diem. In essence they were leasing the cars for free. Only a fool wouldn't take advantage of such a situation. As a result there were twice as many reefers as needed in 1930 and the ones sitting idle belonged to the railroads. This is also covered in the 1934 ICC decision.Correct, Al, except they were NOT per diem payments, they were mileage payments. Some lease contracts provided for subtracting the mileage payments on a car (for that month) from the lease charge--permitting a literal profit just by moving cars more extensively. It appears from the ICC testimony that only a few shippers were aggressively taking advantage of this, but by removing the legality of such contracts, the ICC intended to avoid the rest of the shippers (in Al's words) deciding not to be fools.
Tony Thompson Editor, Signature Press, Berkeley, CA
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