modern warehouse buildings with their man-saving mechanical equipment are far from "sheds" in character. They are, however, "transit" in every sense of that word,-for the reason that nothing they hold in store is intended to remain more than a brief period, and every facility is provided for rapid movement into and out of the vessel's hold. At the further end of the voyage the in-bound cargo is unloaded into the dock warehouse, which again becomes a well-filled reservoir of imported merchandise. Thence it is gradually distributed, through all the agencies of transportation. The problems and the delays of distributing an in-bound cargo are similar to those of assembling an out-bound cargo.

Railroad Warehousing. Similarly, although to a lesser degree, the coming of railroad transportation made necessary a new type of warehouse. To assemble the merchandise required for a full carload, and to distribute the same quantity at destination, place upon the shipper and the consignee a need similar to that of the vessel dock. Hence we have, at every way station, the railroad depot, which is nothing but a modified type of warehouse.

Railroad development was gradual. For the first forty or fifty years railroad cars themselves were largely used for warehousing and storing of the goods, either before shipment or after arrival at destination. The freight car is a warehouse on wheels. As the railroad penetrated into the interior, the railroad car in community after community became the first commercial place of storage, a service into which cars are even today impressed in "new towns.” Each season, too, from August to October, the Granger States of the West still fight for freight cars, having inadequate local farm granaries or town elevators. Railroad freight depots are also extensively utilized for the same purpose. When, however, the railroads began to reach their capacity as transporters of goods, a separation of the transporting from the warehousing and storing functions became apparent. Storage charges, car service and demurrage charges, and charges for handling were assessed with the direct intent of discouraging the free use of railroad facilities for mere storage.

Railroad storage, whether in cars or freight depots, became a fruitful source of discrimination and favoritism. As such it early

came under the ban of the Interstate Commerce Commission. The orders and investigations of this body, added to the protests of shippers, led to Congressional legislation giving further powers to the Commission. The result has been a further divorcement of transportation and warehousing. This separation, in turn, has helped to get before merchants and manufacturers a realization of the distinction between the two functions. It has, more than that, made possible the construction of warehouses for general merchandise of miscellaneous sorts.

So attractive, indeed, has this field of business become, that the railroads have themselves chosen to re-enter the warehousing business. In terminal cities the railroads, either directly or through subsidiary concerns, have erected modern merchandise warehouses which offer complete facilities to all customers. The relations between warehouse and railroad are so intimate that each aids the other. In-bound freight, not immediately removed from the cars, goes into storage at the railroad's warehouse, under the storage clause of the Uniform Bill-of-Lading. In-bound freight, for which the owner is unable to give immediate disposition, or which is to be held for later disposition, is solicited for the railroad's warehouse. Certain items of unloading and handling, included in the freight rate, can be made to cover unloading at the warehouse platform as readily as at the railroad freight depot platform. It is thus possible, in many instances, for the shipper to get his in-bound shipment placed in warehouse storage without charge to himself.

By a reversal of the whole process, a similar advantage to the shipper accrues on out-bound merchandise. The result of the close association of warehouse and railroad ownership and operation is that each brings traffic to the other, in much the same manner that, in the last generation, a branch line "fed" the main line and the main line "supported" the branch. The present importance of this situation is indicated by current advertisements of a principal trunk line, which call attention to the absorption of loading or unloading expense by the carriers. It announces: "No cartage or delay is involved when consignees desire to put their goods in storage, and there is no cartage or delay necessary in making out-bound shipment via the & RR.... If re

shipped via this railroad no cartage will be necessary; if via other lines, cartage charges will be added." Another leading carrier, in current circulars, announces that "because warehouses are necessary adjuncts to transportation, the . . . system has established certain warehouses. . . . It proposes to perpetuate this department; to increase the number of warehouses; to enlarge those now in operation. . . . The Company is forging a chain of storage warehouses, eventually to link together each city of importance to and from which it transports the freight of its patrons.

Intimate Relations with Banking and Insurance

Although the primary relation of warehousing is with transportation, its interdependence is no less real and intimate with banking and with insurance. The warehousing industry has entwined itself into, and through, and about, every phase of modern business just as intimately as have transportation and banking and insurance. Warehousing has developed so gradually and so closely in association with transportation, banking and insurance that the popular mind fails to distinguish the warehousing industry in much the same way that the eye fails to distinguish the leaf of the bitter-sweet vine which has grown up and through the branches of a tree. Throughout the spring and the summer the vine and the tree are inseparably commingled as a mass of green leaves whose minor differences of shape and texture are of no consequence. When, however, autumn arrives, the vine and the tree exhibit, under the conditions of frosty nights, their inherent qualities. At once their differences are obvious, striking the eye of even the least observant passer-by.

The warehousing industry has not, as a rule, been recognized as a separate or distinct element of business development. Of the four cardinal elements of commerce, it is the last to be detached from the others. So intricately, in fact, is the warehousing function bound up with the other three elements that only the past thirty or forty years has the autumn season, to continue our figure of comparison, come to warehousing. Only within years so recent as these has the warehousing industry been identified as a thing by itself. In 1903, the United States Department of Commerce, in conjunction with the American Warehousemen's Association, pub

lished its study of the "Warehousing Industry in the United States." 1

Separation of Warehousing from Transportation Function

As has been indicated by this sketch of warehouse development, the early commercial warehouses were operated by merchants as integral parts of their trade. Early dock warehouses were operated merely as covered or enclosed dock space, and, with the railroads, depot or freight-car storage was considered as an extension of the transportation of goods. It became either an imposition of the public on railroad facilities, or it was a convenient tool for favors or rebates to chosen shippers. The merchant, the vessel company, and the railroad, built warehouses for their respective demands. They considered such facilities in the light of a necessary department of their businesses.

By Ocean Carriers.-Steamship companies have found the operation of warehouses especially burdensome. Cargoes have become huge in volume. They have become even greater in variety. To provide a certain amount of dock or wharf storage for the short period necessary to assemble or distribute a cargo is an unavoidable obligation, but under business methods of the present time, goods for export often reach the port months before cargo space is available, or before the final portions of a single consignment are ready. Imported cargoes, too, frequently require a full twelve months for final distribution. To house this accumulation on dock or wharf has become impossible.

The risk, too, becomes an item of consideration. The contents of a dock or wharf present innumerable hazards of fire. There is the ever-present danger that articles, themselves harmless, may become highly inflammable when near each other or when accident breaks open the container of one or both. Such a hazard, when confined to fire, can be covered by insurance, but even thus the cost is heavy. More than fire, however, are the risks of deteriora

1 Writing of this study in 1920 Prof. C. S. Duncan characterizes the work as "the first and the last investigation of warehousing." He also says: "Special studies on cold storages, grain elevators, and cotton warehouses have been made, and with special purposes in view. The economic problems connected with warehousing, and particularly the commercial aspects of these problems, have never been thoroughly discussed."—(C. S. Duncan, Marketing: Its Problems and Methods, p. 160.)

tion and the risks of one article doing damage to another, either through accidental causes or by nature of the article.

Because, therefore, of the physical impossibility of caring for goods and because of the risks involved when the vessel company becomes a warehouseman, the water carriers allow a reasonable limit of "free time" for removal of shipments by consignee. At the expiration of this "free time," the goods are placed in public warehouses for storage, at the risk and for the account of the consignee. Provision for this disposition is included in the original shipping contract.

There is, in addition, the matter of customs duty on imported. goods. Before duty is assessed, the government makes inspection and appraisal of the merchandise. This usually involves opening of the container; sometimes leads to laboratory tests or analysis; often to long disputes and delayed decision. In every country of the world there has, on this account, developed a system of bonded warehouses for storing imports which are for any reason subject to deferred customs duty. Such goods are, by this means, quickly removed from the custody of the steamship company and placed in the care of the warehouseman "in bond," thus sharply demarking the transportation from the warehousing feature in the carrying of goods.

By Rail Carriers.-Somewhat similarly, too, the railroads have divorced the storing and warehousing of freight from the primary function of moving goods from place to place. With American railroads, the freight depot presents both in city and village the same problem that the wharf dock brings to the shipping company, so far as concerns the physical limitations of space; fire hazards inherent to the merchandise; etc. With the railroads, moreover, there early grew up another difficulty. Shippers deliberately allowed their goods to lie in the freight depot. From the railroads arose the complaint that this custom was an imposition upon them by shippers, who made of the depot a warehouse without the specific consent of the carrier, and that this involuntary warehousing function laid upon them responsibilities for the care of goods, and liability in case of theft, fire or accident, which were