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Economies of Scale in Western River Steamboating: A Comment

Published online by Cambridge University Press:  11 May 2010

Jeremy Atack
Jeremy Atack
Affiliation:
University of Illinois—Urbana-Champaign
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Abstract

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Type
Notes and Discussion
Information
The Journal of Economic History , Volume 38 , Issue 2 , June 1978 , pp. 457 - 466
Copyright
Copyright © The Economic History Association 1978

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References

1 Haites, Erik F. and Mak, James, “Economies of Scale in Western River Steamboating,” Journal of Economic History, 36 (Sept. 1976), 689–703CrossRefGoogle Scholar.

2 See Haites, Erik F. and Mak, James, “Steamboating on the Mississippi 1810–1860: A Purely Competitive Industry,” Business History Review, 45 (Spring 1971), 52–78CrossRefGoogle Scholar; Haites, Erik F. and Mak, James, “Ohio and Mississippi River Transportation, 1810–1860,” Explorations in Economic History, 8 (Winter 1970–71), 153–80CrossRefGoogle Scholar; Haites, Erik F. and Mak, James, “The Decline of Steamboating on the Antebellum Western Rivers,” Explorations in Economic History, 11 (Fall 1973), 25–36CrossRefGoogle Scholar. Also see Mak, James and Walton, Gary M., “Steamboats and the Great Productivity Surge,” Journal of Economic History, 32 (Sept. 1972), 619–40CrossRefGoogle Scholar and Haites, Erik F., Mak, James and Walton, Gary M., Western River Transportation (Baltimore; Johns Hopkins University Press, 1975)Google Scholar.

3 See for example for waterways: Case, Leland S. and Lave, Lester B., “Cost Functions for Inland Waterways Transport in the United States,” Journal of Transport Economics and Policy, 4 (May 1970), 181–91Google Scholar; or for railroads: Borts, George H., “The Estimation of Rail Cost Functions,” Econometrica, 28 (Jan. 1960), 108–31CrossRefGoogle Scholar.

4 Hunter, Louis C., Steamboats on the Western River (Cambridge: Harvard University Press, 1949), p. 377Google Scholar.

5 Haites and Mak, “Economies of Scale,” p. 691. Adapted from Lave, Judith R. and Lave, Lester B., “Hospital Cost Functions,” American Economic Review, 60 (1970), 379–95Google Scholar.

6 These data were uncovered during the course of research in nineteenth-century U.S. manufacturing using the manuscript censuses conducted by Fred Bateman, James D. Foust and Thomas B. Weiss. The original sample contained only 45 steamboats but an additional observation has subsequently been located. The 46 steamboats operated on routes between Louisville and Cincinnati, Frankfort, the Green River, Henderson, the Kanawha River, Madison, New Orleans, St. Louis, the Tennessee River and the Wabash River.

7 The Haites and Mak results are confined to boats operating between Louisville and New Orleans (22 vessels), the Tennessee River (5 vessels), St. Louis (4 vessels), the Wabash River (3 vessels) and Cincinnati (2 vessels). See Haites and Mak, “Economies of Scale,” 691–92.

8 Ibid., Table 2, p. 696.

9 Ibid., p. 693.

10 The 95 percent confidence intervals implied by the t-statistics in Haites and Mak, “Economies of Scale,” Table 2 are: Tennessee River [.8240, 1.3448]; Wabash River [.8446, 1.3293]; Cincinnati [.6384, 1.1902].

11 The regressions were performed on an IBM 360/75 and a CDC Cyber 175 using version 6 of the well-known SPSS package. See Nie, Norman H., Hull, C. Hadlai et al. , Statistical Package for the Social Sciences (2d ed.; New York, 1975)Google Scholar.

12 The inability to replicate Haites and Mak's results is not a serious problem. It is fairly common in empirical work that results cannot be exactly duplicated despite ostensibly the same data sets and methods.

13 Haites and Mak, “Economies of Scale,” p. 692, footnote 14.

14 Ibid.

15 Haites and Mak, “Economies of Scale,” p. 693.

16 See Hunter, “Steamboats,” pp. 258–59. Most references to the speed of steamboats on the western rivers are connected with record-breaking trips such as that completed by a sample steamboat, the Aleck Scott, on May 4, 1849 which covered the 1,400 miles from New Orleans to Louisville against the stream in 5 days, 3 hours, 40 minutes—an average speed of 11.32 mph carrying a freight of 35 tons with 277 passengers (Niles Register, May 1849). However, Hunter suggests that the typical trips were covered at a speed of 5–10 mph. See Hunter, “Steamboats,” pp. 23–25, 490. Also, see Mak and Walton, “The Great Productivity Surge.”

17 Hunter, “Steamboats,” Appendix Table 9, p. 652. The estimate of 1.75 tons per gross ton is the midpoint of the range; it is also exactly the contemporary estimate reported by Hunter (see footnote 18 above) for one of the sample steamboats, the Uncle Sam, and is the estimate used by Mak and Walton in “The Great Productivity Surge.”

18 On the Louisville-Cincinnati and the other short haul trunk routes the number of trips was constrained to one a day, that being the frequency of the service. See Hunter, “Steamboats,” p. 507.

19 Mak and Walton, “Great Productivity Surge,” Table 1, p. 627.

20 See for example: U.S. Congress, Senate, Report of the Committee on Roads and Canals on the Bill to Authorize the Purchase of Stock in the Louisville and Portland Canal Co., 26th Cong., 1st sess., 1840, Serial Set 359, Senate Doc. 284; U.S. Congress, Senate, Memorials Asking Congress to Make an Appropriation to Improve the Navigation of the Mississippi River and its Principal Tributaries, 27th Cong., 3d sess., 1843, Serial Set 415, Senate Doc. 137; U.S. Congress House, Memorial of the Citizens of the City of Cincinnati Relative to the Improvement of the Navigation of the Ohio and Mississippi Rivers, 27th Cong., 3d sess., 1843, Serial Set 421, House Doc. 126; U.S. Congress, Senate, Memorial of a Number of Citizens of Cincinnati, Ohio Praying the Removal of Obstructions in the Navigation of the Ohio and Mississippi Rivers, 28th Cong., 1st sess., 1844, Serial Set 434, Senate Doc. 179; U.S. Congress, Senate, Memorial of a Number of Citizens of the City of St. Louis, Missouri Praying an Appropriation for the Removal of Obstructions in the Western Rivers and for the Improvement of the Harbor of that City, 28th Cong., 1st sess., 1844, Serial Set 434, Senate Doc. 185; U.S. Congress, House, Documents Giving Information Relative to the Louisville and Portland Canal, 28th Cong., 1st sess., 1844, Serial Set 442, House Doc. 154; U.S. Congress, Senate, Report of the Special Committee to Whom was Referred the Memorial of the Memphis Convention, 29th Cong., 1st sess., 1846, Serial Set 477, Senate Doc. 410; U.S. Congress, House, Report on the Bill “to Remove Obstructions to the Navigation of the Falls of the Ohio,” 29th Cong., 1st sess., 1846, Serial Set 490, House Report 661; U.S. Congress, House, Report on the Improvement of the Navigation of the Ohio River at the Falls, 32d Cong., 1st sess., 1852, Serial Set 656, House Report 166.

21 U.S. Congress, House, Committee on Roads and Canals, Report on the Bill “to Remove Obstructions to the Navigation of the Falls of the Ohio,” 29th Cong., 1st sess., 1846, Serial Set 490, House Report 661, p. 1.

22 U.S. Congress, Senate, Memorial of a Number of Citizens of Cincinnati, Ohio Praying the Removal of Obstructions in the Navigation of the Ohio and Mississippi Rivers, 28th Cong., 1st sess., 1844, Serial Set 434, Senate Doc. 179, p. 23.

23 Stigler, George J., “The Economies of Scale,” Journal of Law and Economics, 1 (Oct. 1958), 54–71CrossRefGoogle Scholar. Also Weiss, Leonard, “The Survival Technique and the Extent of Suboptimal Capacity,” Journal of Political Economy, 72 (June 1964), 246–61CrossRefGoogle Scholar and Shepherd, William A., “What does the Survivor Technique Show about Economies of Scale,” Southern Economic Journal, 34 (July 1967), 113–22CrossRefGoogle Scholar.