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Transportation: a global supply chain

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9E

TRANSPORTATIONA GLOBAL SUPPLY CHAIN PERSPECTIVE

NOVACK/GIBSON/SUZUKI/COYLE
NOVACK/GIBSON/SUZUKI/COYLE

Australia • Brazil • Mexico • Singapore • United Kingdom • United States

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Transportation: A Global Supply © 2019, 2016 Cengage Learning, Inc.
Chain Perspective, Ninth Edition
Robert A. Novack, Brian J. Gibson, Unless otherwise noted, all content is © Cengage
Yoshinori Suzuki and John J. Coyle ALL RIGHTS RESERVED. No part of this work covered by the copyright
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Printed in the United States of America


Print Number: 01   Print Year: 2018

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A very special note of thanks and appreciation is due to our families. Bob Novack would like
to thank his wife Judith and their children Tom and his wife Meghan, Elizabeth and her
husband Paul, and Alex. Brian Gibson would like to recognize his wife Marcia
and son Andy. Yoshi Suzuki would like to thank his wife Kazuko and their
children Takeshi and Mia. John Coyle would like to thank his wife Barbara,
their children John and Susan, and their grandchildren Lauren, Matthew,
Elizabeth Kate, Emily, Ben, Cathryn, and Zachary. Special mention
should be made in reference to Dr. Edward J. Bardi to express
our deep appreciation of his many contributions not only
to the continuing development of this text but also
to the supply chain management text.

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Brief Contents
Preface xv
About the Authors xviii

Part I
Chapter 1  lobal Supply Chains: The Role and Importance of
G
Transportation 3
Chapter 2 Transportation and the Economy 32
Chapter 3 Transportation Technology and Systems 55
Chapter 4 Costing and Pricing for Transportation 83
Suggested Readings for Part I 151

Part II
Chapter 5 Motor Carriers 154
Chapter 6 Railroads 199
Chapter 7 Airlines 229
Chapter 8 Water Carriers and Pipelines 253
Suggested Readings for Part II 284

Part III
Chapter 9 Third Party Logistics 287
Chapter 10 Transportation Risk Management 331
Chapter 11 Global Transportation Management 357
Chapter 12 Governmental Roles in Transportation 397
Chapter 13 Issues and Challenges for Global Supply Chains 433
Suggested Readings for Part III 459

Glossary 461
Name Index 473
Subject Index 476

Appendix A Selected Transportation Publications A-1 (available on


book companion website cengagebrain.com)
Appendix B Transportation-Related Associations B-1 (available on
book companion website cengagebrain.com)

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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
Contents
Preface xv
About the Authors xviii

Part I
Chapter 1  lobal Supply Chains: The Role and Importance of
G
Transportation 3
TRANSPORTATION PROFILE: Critical Role of Transportation in Global
Economy 4
Introduction 5
Global Supply Chain Flows 5
The Economic Basis and Logic of Improved Global Trade 10
Absolute and Comparative Advantage 11
Contributing Factors for Global Flows and Trade 12
Population Size and Distribution 12
Urbanization 16
Land and Resources 16
Technology and Information 17
Globalization 18
Supply Chain Concept 19
Development of the Concept 19
GLOBAL PROFILE: EU: Be a Player, Not a Follower 19
ON THE LINE: Port Tracker Calls for Strong Annual Growth in First Half
of 2017 24
Summary 26
Study Questions 27
Case 1-1: Clearfield Cheese Company Case: A Sequel 28
Case 1-2: TEA Logistics Services, Inc. 30
Notes 31
Chapter 2 Transportation and the Economy 32
Introduction 33
Up and Down with the Big Muddy 33
Historical Significance 34
Economics of Transportation 35
Demand for Transportation 35
Passenger Demand 36
Transport Measurement Units 37
ON THE LINE: Cass Freight Index Paints Optimistic Future 37

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v
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vi CONTENTS

Demand Elasticity 39
Freight Transportation Demand 40
Service Components of Freight Demand 42
TRANSPORTATION PROFILE: Uber Freight Makes Official Entrance into Trucking
Market 44
Value of Goods 45
Gross Domestic Product (GDP) 48
Environmental Significance 49
The Environment 49
Safety 50
Social Significance 50
Political Significance 51
Summary 51
Study Questions 52
Notes 52
Case 2-1: Highways Galore 53
Case 2-2: Transportation and Economic Activity 54

Chapter 3 Transportation Technology and Systems 55


TRANSPORTATION PROFILE: Cold Chain Pharma Logistics Is Heating Up 56
Introduction 57
Information Requirements 58
Quality Standards 58
Multidirectional Flow 59
ON THE LINE: Maersk Makes Bold Bid at Differentiation by Teaming
with CRM Giant 60
Decision Support 61
Transportation Software 61
Transportation Management Systems 62
Additional Applications 66
Transportation Software Selection and Implementation 66
Needs Assessment 66
Software Selection 67
Implementation Issues 68
Transportation Equipment Technology 69
Sustainability Initiatives 70
TRANSPORTATION TECHNOLOGY: The Electric Truck Race 71
Safety Efforts 72
Cargo Security Innovations 72
Emerging Technologies 73
Autonomous Transportation 74
Blockchain for Freight 75
GLOBAL PERSPECTIVES: Shipping Without Sailors 75
Next Generation TMS 76
Summary 77
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CONTENTS vii

Study Questions 78
Notes 78
Case 3-1: myIoT Inc. 81
Case 3-2: Vital-E Nutrition 82
Chapter 4 Costing and Pricing for Transportation 83
TRANSPORTATION PROFILE: Disintermediation to Hit Freight Brokerage 84
Introduction 85
Market Considerations 86
Market Structure Models 86
Theory of Contestable Markets 87
Relevant Market Areas 88
Cost-of-Service Pricing 89
Value-of-Service Pricing 93
Rate Making in Practice 99
General Rates 99
Rate Systems Under Deregulation 105
Special Rates 106
Character-of-Shipment Rates 107
ON THE LINE: Werner CEO: Truckload Rates Getting Back to “Equilibrium”
After Slump 108
Area, Location, or Route Rates 109
Time/Service Rate Structures 110
Other Rate Structures 111
TRANSPORTATION TECHNOLOGY: Freight Payment Versus Freight
Settlement 113
Pricing in Transportation Management 114
Factors Affecting Pricing Decisions 114
Major Pricing Decisions 115
Establishing the Pricing Objective 116
Estimating Demand 117
Estimating Costs 118
Price Levels and Price Adjustments 119
Most Common Mistakes in Pricing 121
Summary 122
Study Questions 122
Notes 122
Case 4-1: Mid-West Trucking 124
Case 4-2: Hardee Transportation 125
Appendix 4A: Cost Concepts 127
Accounting Cost 127
Economic Cost 127
Social Cost 128
Analysis of Cost Structures 128
Rail Cost Structure 133
Motor Carrier Cost Structure 133
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viii CONTENTS

Other Carriers’ Cost Structures 134


Notes 134
Appendix 4B: LTL and TL Costing Models 136
Operational Activities 136
Cost/Service Elements 136
TL Costing 136
Equipment Cost Data 137
LTL Costing 140
Equipment Cost Data 140
Conclusion 145
Appendix 4C: Yield Management Pricing 146
Seat Allocation 146
Overbooking 148
Suggested Readings for Part I 151

Part II
Chapter 5 Motor Carriers 154
TRANSPORTATION PROFILE: Increasing Complexity in Parcel 155
Introduction 156
Industry Overview 156
Significance 156
Types of Carriers 156
Number of Carriers 159
Market Structure 161
Competition 161
Operating and Service Characteristics 162
General Service Characteristics 162
Equipment 163
Types of Vehicles 164
Terminals 165
Terminal Management Decisions 169
Fuel Management 170
Cost Structure 178
Fixed Versus Variable Cost Components 178
ON THE LINE: The Never-Ending Truck Driver Shortage 179
Economies of Scale 181
Private Trucking 184
What Is Private Trucking? 184
Current Issues 186
Safety 186
Technology 187
Driver Turnover 188
Green and Sustainable Operations 189
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CONTENTS ix

TRANSPORTATION TECHNOLOGY: Truckers Prepare for Era of Driverless


Trucks—Coming Sooner Rather than Later 190
Financial Stability 191
Summary 191
Study Questions 193
Notes 193
Case 5-1: Hardee Transportation 196
Case 5-2: Cyclone Transportation 197
Chapter 6 Railroads 199
TRANSPORTATION PROFILE: Capturing Inventory In-Transit on Rail 200
Introduction 201
Industry Overview 202
Number of Carriers 202
Competition 203
GLOBAL PERSPECTIVES: Florida East Coast Railway to Be Acquired
by Grupo Mexico 205
Operating and Service Characteristics 206
General Service Characteristics 206
Constraints 208
Strengths 208
Equipment 209
Service Innovations 210
ON THE LINE: Schneider and CSX Ink New Rail Service Contract 213
Cost Structure 214
Fixed Costs 214
Semivariable Costs 215
Variable Costs 215
Economies of Scale 216
Financial Plight 217
Legislation Reform 218
Improved Service to Customers 219
Current Issues 219
Alcohol and Drug Abuse 219
Energy 220
Technology 221
TRANSPORTATION TECHNOLOGY: GAO Report Calls on Congress to Extend
Positive Train Control Deadline 221
Future Role of Smaller Railroads 222
Customer Service 223
Drayage for Intermodal Service 223
Summary 224
Study Questions 224
Notes 225
Case 6-1: CBN Railway Company 227
Case 6-2: Rail Versus Pipeline Investment 228
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x CONTENTS

Chapter 7 Airlines 229


TRANSPORTATION PROFILE: Air: Ending on a High Note 230
Introduction 230
Industry Overview and Significance 231
Types of Carriers 231
Private Carriers 231
For-Hire Carriers 231
Market Structure 232
Number of Carriers 232
Competition 233
Intermodal 233
Intramodal 234
Service Competition 234
Cargo Competition 234
Operating and Service Characteristics 235
General 235
GLOBAL PERSPECTIVES: Air Cargo Link to Trade Growth 235
Speed of Service 236
Length of Haul and Capacity 236
Accessibility and Dependability 238
Equipment 238
Types of Vehicles 238
Terminals 239
ON THE LINE: USPS and FedEx Express Re-up on Air Transportation
Partnership 239
Cost Structure 240
Fixed- Versus Variable-Cost Components 240
Fuel 241
Labor 242
Equipment 242
Economies of Scale/Economies of Density 243
Rates 245
Pricing 245
Operating Efficiency 245
Current Issues 246
Safety 246
Security 247
Technology 248
Summary 248
Study Questions 249
Notes 250
Case 7-1: NextGen Technology 251
Case 7-2: Airline Consolidations 252

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CONTENTS xi

Chapter 8 Water Carriers and Pipelines 253


TRANSPORTATION PROFILE: Inland Waterways Realize Volume Increase 254
Introduction 254
Brief History of Water Transportation 254
Water Transport Industry Overview 255
Significance of Water Transport 255
Types of Carriers 257
TRANSPORTATION TECHNOLOGY: Federal Maritime Commission Hosts
Blockchain Discussion 258
Number and Categories of Carriers 259
Competition 259
Operating and Service Characteristics 260
Equipment 262
Cost Structure 266
Current Issues 267
Brief History of Pipelines 268
Pipeline Industry Overview 269
Significance of Pipelines 269
Types of Carriers 270
Ownership 270
Number of Carriers 271
Operating and Service Characteristics 272
Relative Advantages 272
Relative Disadvantages 273
Competition 273
Equipment 274
Commodity Movement 275
Cost Structure 276
ON THE LINE: OPEC’s Production Cuts Are Greatly Overrated 277
Summary 278
Study Questions 279
Case 8-1: Great Lakes Carriers: A Sequel 281
Case 8-2: The Keystone Pipeline 283
Suggested Readings for Part II 284

Part III
Chapter 9 Third Party Logistics 287
TRANSPORTATION PROFILE: Key Criteria for Evaluating Potential 3PL Providers 288
Introduction 288
Industry Overview 289
Types of 3PL Providers 290
ON THE LINE: Uber Freight Makes Official Entrance into Trucking Market 294
3PL Services and Integration 295
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xii CONTENTS

GLOBAL PERSPECTIVES: Global 3PL Management: Factors to Keep at


Top of Mind 299
3PL User Overview 300
Reasons for Outsourcing 300
Primary Activities Outsourced 302
Results Achieved 303
Establishing and Managing 3PL Relationships 303
Strategic Needs of 3PL Users 307
TRANSPORTATION TECHNOLOGY: The Payoffs of 3PL Investment in IT
Capabilities 309
3PL Versus Private Carrier 311
Operating Cost 311
Summary 317
Study Questions 318
Notes 319
Case 9-1: Closet Concepts Ltd. 321
Case 9-2: C.H. Robinson Worldwide, Inc. 323
Appendix 9A: Third Party Logistics and TL Auction 326
TL Auction: The Traditional Procedure 326
Limitation with Traditional Procedure 327
A New Recent Approach 328
Future Direction 329
Chapter 10 Transportation Risk Management 331
TRANSPORTATION PROFILE: The New Transportation Risk 332
Introduction 332
Risk Concepts 333
Transportation Risks 334
Product Loss 335
Product Damage 335
Product Contamination 336
Delivery Delay 336
Supply Chain Interruption 337
Security Breach 337
Transportation Risk Management Process 338
Step 1—Risk Identification 339
GLOBAL PERSPECTIVES: Transportation Risk—Who or What Is to Blame? 340
Step 2—Risk Assessment 341
Step 3—Risk Management Strategy Development 342
ON THE LINE: Hedging Those Transportation Bets 344
TRANSPORTATION TECHNOLOGY: Those Things Can Reduce Your Risk 347
Step 4—Risk Review and Monitoring 349
Summary 349
Study Questions 350
Notes 351
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CONTENTS xiii

Case 10-1: Young Again Pharmaceuticals 353


Case 10-2: RIoT Athletic 355
Chapter 11 Global Transportation Management 357
TRANSPORTATION PROFILE: F4—Fast Flowing Fast-Fashion 358
Introduction 358
Transaction Processes 359
Terms of Trade 359
Cargo Insurance 362
ON THE LINE: Cargo Theft—A Global Epidemic 364
Terms of Payment 365
Distribution Processes 366
Mode Selection 366
International Air 371
Intermodal Transportation 373
GLOBAL PERSPECTIVES: Are Bigger Ships Better? 377
Carrier Selection 377
Route Selection 378
Delivery Execution 379
Communication Processes 382
TRANSPORTATION TECHNOLOGY: Paperless Global Transportation—Slow but
Steady Progress 387
Summary 391
Study Questions 392
Notes 392
Case 11-1: 3D Printers for the Masses 395
Case 11-2: As the Blade Turns 396
Chapter 12 Governmental Roles in Transportation 397
TRANSPORTATION PROFILE: Late Push to Extend ELD Implementation Date
Nixed by House Vote 398
Introduction 399
Transportation Policy 400
Why Do We Need a Transportation Policy? 401
Who Establishes Policy? 402
ON THE LINE: The Fight Over Five Feet 405
Transportation Regulation 406
Basis of Regulation 407
Responsibility for Regulation 407
Focus of Regulation 410
GLOBAL PERSPECTIVES: State of Ocean Cargo: Carriers Cope with Regulatory
Restrictions 413
A Concise Chronology of Transportation Regulation 418
Transportation Planning, Promotion, and Programs 419
Transportation Planning and the Public Sector 420
TRANSPORTATION TECHNOLOGY: A Unique and Clean Approach to Shore Power 420
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xiv CONTENTS

An Approach to Public Project Planning Analysis 421


Modal Promotion Activities 423
Paying for Transportation Programs 427
Summary 428
Study Questions 429
Notes 430
Case 12-1: Who Pays the Price? 431
Case 12-2: Federal Highway Infrastructure Funding 432
Chapter 13 Issues and Challenges for Global Supply Chains 433
TRANSPORTATION PROFILE: It’s “Beyond Time” to Modernize U.S. Infrastructure,
U.S. Chamber of Commerce Urges 434
Introduction 435
Transportation Infrastructure 436
Highway Traffic and Infrastructure 437
Railroad Traffic and Infrastructure 438
Waterway Traffic and Infrastructure 439
Talent Management 441
Sustainability: Going Green with Transportation 444
ON THE LINE: Wal-mart’s “Project Gigaton” Focuses on Major Supply Chain
Greenhouse Gas Emissions Reduction Effort 448
Fuel Cost and Consumption 448
Motor Carriers 449
Air Carriers 450
Water Carriers 450
Rail Carriers 451
Pipeline Carriers 451
Carriers’ Responses 451
Summary 453
Study Questions 454
Notes 454
Case 13-1: Sustainability and Night Delivery 456
Case 13-2: Bald Eagle Valley Trucking 458
Suggested Readings for Part III 459

Glossary 461
Name Index 473
Subject Index 476

Appendix A Selected Transportation Publications A-1 (available on


book companion website cengagebrain.com)
Appendix B Transportation-Related Associations B-1 (available on
book companion website cengagebrain.com)
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
Preface

Transportation is the c­ ritical link in successful supply chains. It is a key facilitator of global
economic development, quality of life improvement, and enterprise success. Effective trans-
portation processes ensure the rapid flow of essential goods across complex global supply This textbook is recommended
chains. Efficient transportation operations keep delivery costs in check to ensure that prod- by APICS® as a valuable study
ucts are affordable in multiple markets. resource for the Certified in
Logistics, Transportation,
Transportation professionals are tasked with balancing these effectiveness and effi- and Distribution professional
ciency goals. They must also manage complex transportation networks and minimize certification program. For
disruptions of cross-border product flows to meet the ever-increasing service demands of details go to http://www.apics
.org/credentials-education/
the 21st century customer. While these are not easy tasks, high-quality work by dedicated credentials/cltd.
transportation professionals is essential for global trade to thrive.
In this book, Transportation: A Global Supply Chain Perspective, Ninth Edition, we
continue to focus on the widespread impact of commercial transportation on worldwide
commerce. We believe that the contents of this book will help future transportation pro-
fessionals prepare for successful careers in this dynamic field. Our text follows the format
of the previous edition with three sections and thirteen chapters. Substantive additions
and revisions have been made to enhance the content and organization. In particular, the
critical role of technology in global transportation receives special attention in this edition.
Part I provides the foundation for the overall text. Chapter 1 explores the nature, impor-
tance, and critical issues in the global economy, which are important to understand for the
current and future transportation systems. Chapter 2 provides the economic foundation
and rationale for the role of transportation as well as its political and social importance.
Chapter 3 highlights the expanding role of technology in transportation, addressing both
software and equipment innovations that drive greater service and lower costs. Chapter 4
offers a discussion of transportation costing and pricing in a market-based economy.
Part II provides an overview of the major transportation alternatives available to
individual and organizational users. Chapters 5 through 8 discuss and examine the key
features and issues of the five basic modes of transportation, namely, motor (5), rail (6),
airline (7), water and pipeline (8). Each of the basic modes offers inherent advantages for
shippers of particular commodities or locations that need to be appreciated and under-
stood to gain the economic benefits they offer. The dynamic market environment that
exists in many economies demands continuous improvement of modal capabilities if they
are to remain relevant.
The chapters in Part III cover a variety of important issues related to the successful
management of transportation flows. Each of the five chapters in this section have been
updated and revised to further improve their value to the readers. Chapter 9 supplements
the information provided in Part II with a detailed discussion of logistics service provid-
ers that support the transportation industry. These organizations improve the efficiency,
effectiveness, and execution of global supply chain flows. Chapter 10 discusses the topic of
risk management, a key concern for many organizations because of the increasing threat
of supply chain disruptions in the global economy. Strategies, methods, and outcomes
for risk management are explored as well as overall security enhancement. Chapter 11
provides an in-depth discussion of the planning and execution of global transportation
with emphasis on trade facilitation, product flows, and information sharing. Chapter 12

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xv
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
xvi PREFACE

covers the all-important role of government policy, regulation, and promotion in fos-
tering a strong transportation network. Finally, Chapter 13 explores some of the major
challenges for transportation in the 21st century, namely, infrastructure funding needs,
talent management gaps, environmental sustainability, and fuel management. Each issue
threatens to disrupt transportation flows, reduce competitiveness, and increase costs if
not managed proactively.
Overall, we are convinced that transportation is a critical engine for business growth
and societal advancement, but is often taken for granted until a crisis arises. As stated pre-
viously, it may be the most important industry for all economies regardless of their stage
of development. Such recognition needs to be accorded to transportation in the future.

Features
1. Learning objectives in the beginning of each chapter provide students with an over-
all perspective of chapter material and serve to establish a baseline for a working
knowledge of the topics that follow.
2. Transportation Profile boxes are the opening vignettes at the beginning of each
chapter that introduce students to the chapter’s topics through familiar, real-world
examples.
3. On the Line features are applied, concrete examples that provide students with
hands-on managerial experience of the chapter topics.
4. Transportation Technology boxes help students relate technological developments
to transportation management concepts.
5. Global Perspectives boxes highlight the activities and importance of transportation
outside of the United States.
6. End-of-chapter Summaries and Study Questions reinforce material presented in
each chapter.
7. Short cases at the end of each chapter build on what students have learned.
­Questions that follow the cases sharpen critical thinking skills.

Ancillaries
1. The Instructor’s Manual includes chapter outlines, answers to end-of-chapter study
questions, commentary on end-of-chapter short cases, and teaching tips.
2. A convenient Test Bank offers a variety of multiple-choice, short-answer, and essay
questions for each chapter.
3. PowerPoint slides cover the main chapter topics and contain figures from the main
text.
4. The book companion site (www.cengagebrain.com) provides additional resources
for students and instructors. Appendix A, Selected Transportation Publications,
and Appendix B, Transportation-Related Associations, can be found on the com-
panion site. The Instructor’s Manual and PowerPoint files are downloadable from
the site for instructors.

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PREFACE xvii

Acknowledgments
The authors are indebted to many individuals at our respective academic institutions as
well as other individuals with whom we have had contact in a variety of venues. Our uni-
versity students and our executive program students have provided an important sounding
board for the many concepts, techniques, metrics, and strategies presented in the book.
Our faculty and corporate colleagues have provided invaluable insights and appropri-
ate criticism of our ideas. Some individuals deserve special consideration: Ryan Wilson
(Penn State), Ms. Tracie Shannon (Penn State), and Kusumal Ruamsook (Penn State). The
authors would also like to thank the following fellow faculty members for their insightful
contributions to several chapters in this text: John C. Spychalski, Professor Emeritus of
Supply Chain Management (Penn State); and Joe Hanna, Associate Dean and Professor
of Supply Chain Management (Auburn). Finally, we would like to thank Michael Levans,
Group Editorial Director of Logistics Management magazine for his support in allowing
us to use material from his publication in this text.

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About the Authors
Robert A. Novack is currently an Associate Professor of Supply Chain Management and
Associate Director in the Center for Supply Chain Research at Penn State. Dr. Novack
worked in operations management and planning for the Yellow Freight Corporation and
in planning and operations for the Drackett Company. He received his bachelor’s and
MBA degrees from Penn State and a PhD from the University of Tennessee in ­Knoxville.
Dr. Novack has numerous articles published in the Journal of Business Logistics, the Trans-
portation Journal, and the International Journal of Physical Distribution and Logistics
Management. He is also the coauthor of three textbooks: Creating Logistics Value: Themes
for the Future, Supply Chain Management: A Logistics Perspective (8e), and Transportation.
He is on the editorial review board for the Journal of Business Logistics and is an area editor
for the Journal of Supply Chain Management. Dr. Novack is very active in the Council for
Supply Chain Management Professionals, having served as overall program chair for the
annual conference, as a track chair, and as a session speaker. In addition, he has served
on numerous committees with this organization. Dr. Novack holds the CTL designation
from the American Society of Transportation and Logistics. His current research interest
is on the development and use of metrics in managing supply chains. In 2009, he received
the Atherton Teaching Award from Penn State, the highest award given for teaching at
that university.
Brian J. Gibson is the Wilson Family Professor of Supply Chain Management and
Executive Director of the Center for Supply Chain Innovation at Auburn University. Pre-
viously, he served on the faculty of Georgia Southern University and as director of the
Southern Center for Logistics and Intermodal Transportation. Dr. Gibson also served as a
logistics manager for two major retailers. He is an accomplished faculty member who has
received multiple awards for outstanding teaching, research, and outreach. Dr. Gibson has
coauthored numerous articles in the Journal of Business Logistics, Supply Chain Manage-
ment Review, International Journal of Logistics Management, and other leading industry
publications. He is also the coauthor of three textbooks: Supply Chain Management: A
Logistics Perspective (10e), The Definitive Guide to Integrated Supply Chain Management,
and Transportation. He is actively engaged in executive education, seminar development,
and consulting with leading organizations. Dr. Gibson currently serves as Secretary and
Treasurer for the Council for Supply Chain Management Professionals, Education Advisor
for the National Shippers Strategic Transportation Council, and Supply Chain Steering
Committee Member for the Retail Industry Leaders Association. Dr. Gibson earned a
BSBA from Central Michigan University, an MBA from Wayne State University, and a
PhD in logistics and transportation from the University of Tennessee.
Yoshinori Suzuki is Dean’s Professor of Supply Chain Management and associate
chair of the Department of Supply Chain and Information Systems at the College of
Business, Iowa State University. He holds a BS degree in Business and Economics from
Sophia University (Tokyo Japan), an MBA degree in Marketing from New York University
Stern School of Business, and a PhD degree in Business Logistics from The ­Pennsylvania
State University Smeal College of Business. His research interest is in mathematical mod-
eling of logistics and transportation problems. During his 20-year academic career, he
has conducted numerous research projects with both private and public ­organizations,
which include Ruan Transportation Management Systems, GROWMARK Inc.,
C.H. Robinson, Renewable Energy Group (REG), Des Moines International Airport, and
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ABOUT THE AUTHORS xix

National Aeronautics and Space Administration (NASA). His recent research work has
appeared in journals such as Computers & Industrial Engineering, Transportation Research
(various parts), Journal of Transportation Engineering, Naval Research Logistics, Decision
Sciences, Decision Support Systems, Journal of Business Logistics, International Journal of
Production Economics, Transportation Journal, Journal of the Transportation Research
Forum, and International Journal of Physical Distribution and Logistics Management. He
has several years of industry experience. His work experience includes sales, logistics
management, and transportation management duties. Dr. Suzuki is currently serving as
the co-editor-­in-chief of Transportation Journal.
John J. Coyle is director of corporate relations for the Center for Supply Chain
Research (CSCR) and professor emeritus of Logistics and Supply Chain Management in
the Smeal College of Business at Penn State University. He holds a BS and an MS from
Penn State and earned his doctorate from Indiana University in Bloomington, Indiana,
where he was a U.S. Steel Fellow. He joined the Penn State faculty in 1961 and attained
the rank of full professor in 1967. In addition to his teaching responsibilities, he served in
a number of administrative positions, including chairman of the Department of Business
Logistics, faculty director and assistant dean for Undergraduate Programs, senior associate
dean, and executive director of the CSCR. He also played a major role in the development
of Smeal’s Executive Education Programs. At the university level, he served as chairman
of the Faculty Senate, Special Assistant for Strategic Planning to two university presidents
(Jordan and Thomas). He also served as Penn State’s faculty representative to the NCAA
for 30 years and to the Big Ten for 10 years.
Dr. Coyle was the editor of the Journal of Business Logistics from 1990 to 1996. He has
authored or coauthored 23 books or monographs and 38 articles in reputable professional
journals. He has received 14 awards at Penn State for teaching excellence and/or advising.
Former students and friends have endowed a scholarship fund and two Smeal Profes-
sorships in his honor. He received the Council of Logistics Management’s Distinguished
Service Award in 1991; Penn State’s Continuing/Distance Education Award for Academic
Excellence in 1994; the Eccles Medal for his contributions to the U.S. Department of
Defense and the Lion’s Paw Medal from Penn State for Distinguished Service, both in 2004.
Dr. Coyle currently serves on the board of three logistics and supply chain companies.

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PA R T
I
The major driving forces of change for supply chains during the first two decades
of the 21st century have been globalization and technology. That is not to say
that there are not additional exogenous factors impacting supply chains and
necessitating changes in managerial tactics and/or strategies because there have
been. However, none have been of the magnitude of globalization and technol-
ogy. Interestingly, they were major forces in the last two decades of the 20th
century as was cited in previous editions of this text. The fact that they continue
to have such an impact is certainly worth noting, but one must also appreciate
the depth and scope of these two external forces not only on supply chains but
also upon consumer and organizational behavior.
Transportation is an important part of supply chain management that has
been described figuratively previously as the “glue” that holds the supply chain
together and is a key enabler for important customer-oriented strategies such
as overnight or same-day delivery. Transportation is often the final phase or pro-
cess to touch the customer and may have a lasting impact on the success of the
transaction. This is the micro dimension, but on a macro level transportation
can be viewed as the “life blood” of global supply chains, and it has been argued
that efficient and effective transportation is the most important business for a
country or region and the cornerstone of a modern economy.
Global transportation systems have been seriously challenged in the 21st
century by high fuel costs, changing capacity, and regulation. In addition, the
transportation infrastructure, namely seaports, airports, highways, and so on, is
not sufficient to accommodate the flow of global commerce in many countries
thus stymying the economic progress of the region. Many parts of the infrastruc-
ture require government or public funding because of the different users. The
public coffers are frequently financially strained because of the many alternative
demands for these somewhat limited resources. Transportation infrastructure
has to “compete” for an allocation of public funds, and the benefits, while real,
are more long run in terms of outcome and value. Consequently, such needed
resources might not be allocated in a timely manner. This is the dilemma of the
21st century. Transportation and the related logistics systems are a necessary
requirement for all economies, developed and underdeveloped, but the public
investment in social capital necessary to not only improve but also sustain the
infrastructure has not been forthcoming in many countries. Hopefully, one of
the outcomes of this text will be a better understanding and appreciation for the
criticality of efficient and effective transportation systems for economic devel-
opment and social welfare.
Part I will provide an overview and foundation for the role and importance
of improved transportation from a micro and macro perspective in global sup-
ply chains. The discussion will cover economic and managerial dimensions of
1
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
2 CHAPTER
PART I  

transportation in the global economy. Part I is designed to provide the frame-


work for the analysis and discussion in the following sections of the book.
Chapter 1 examines the nature, importance, and critical issues in the global
economy, which are important to understand for the current and future transpor-
tation systems, that will provide the needed service for the diverse requirements
of the various regions and countries. This chapter will also discuss the special
nature of transportation demand and how transportation adds value to prod-
ucts. There is also an overview of the concept of supply chain management and
the important role of transportation in supply chains of various organizations.
Chapter 2 examines the role of transportation from a macro and micro per-
spective. The chapter adds to the discussion in Chapter 1 but explores more
broadly the special significance of improved transportation systems. The analysis
includes not only the economic impact but also the political and social impact
of transportation. Current and historical perspectives are provided in the dis-
cussion to help the reader appreciate and better understand the contribution
of improved transportation in an economy. The discussion also examines the
impact of improved transportation upon land values and prices of products and
services.
Chapter 3 is new and provides an overview of the technology and s­ ystems
currently in use and planned for execution in the transportation sector. ­Special
attention is given to the technology used in the various modes, including
On-Board Recorders (OBRs) and driverless vehicles in the motor carrier indus-
try and Positive Train Control (PTC) in the railroad industry. The discussion also
emphasizes the impact the various technologies have had on transportation
efficiency.
Chapter 4 extends the discussion of costing and pricing introduced in Chap-
ters 1 and 2. Given the importance of transportation on a micro and macro level
to the cost and value of products and services, costing and pricing deserves a
more detailed examination. There are unique dimensions to transportation ser-
vices in general and between the basic modes that need to be understood by
managers and public officials. Chapter 4 provides an analysis of the differences
and unique dimensions of transportation services.

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CHAPTER

1
GLOBAL SUPPLY
CHAINS: THE ROLE
AND IMPORTANCE
OF TRANSPORTATION

Learning Objectives
After reading this chapter, you should be able to do the following:

❯❯ Appreciate why efficient transportation systems are so critical to


advance the growth and development of regions and countries,
and how they contribute to social and political systems as well as
national defense
❯❯ Discuss the importance of transportation to globalization and
how it contributes to the effective flow of commerce among close
and distant regions
❯❯ Understand how global supply chains can contribute to the
competitive position of countries and allow them to penetrate
global markets
❯❯ Appreciate the dynamic nature of the global economy, which
can impact and change the competitive position of a region or
country in a relatively short period of time
❯❯ Explain the underlying economic basis for international exchange
of goods and services for the overall benefit of two or more coun-
tries or regions and gain some perspective on the volume and
overall importance of the more advanced countries of the world
❯❯ Discuss the size and age distribution of the population and the
growth rate of the major countries of the world and understand
how the size of the population can impact a country positively or
negatively
❯❯ Understand the challenges and opportunities associated with the
worldwide growth in urbanization and why there has been such a
major shift from rural to urban areas

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3
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4 CHAPTER 1

❯❯ Appreciate the importance and impact of land and resources


to the economic advancement and development of the various
countries of the world and how they can be exploited to their
advantage
❯❯ Explain why technology has become such an important ingredient
for the economic progress of companies and countries in today’s
global economy and understand the need for and types of
technology
❯❯ Discuss the overall characteristics and importance of globalization
and supply chains in the highly competitive world economies of the
21st century

TRANSPORTATION PROFILE
Critical Role of Transportation in Global Economy
Transportation is one of the most important tools or methods that developing soci-
eties or countries use to advance economically, politically, and socially. It impacts
every phase and facet of our existence. Transportation is probably the most important
industry in any country or in the global economy. Without it, we could not operate a
grocery store or run a factory. The more complex or developed a country is, the more
indispensable an efficient and effective transportation system is for continued survival
and growth.
In advanced societies, transportation systems are so well developed that most citizens
do not think about or realize the many benefits that accrue from good transportation sys-
tems. They use transportation everyday directly or indirectly. It provides the thoroughfare
for commerce, the means of travel locally or for longer distances, and the assistance for
many other important aspects of their lives. People seldom stop to think how restricted
their lives would be without good transportation. However, if one travels to an underdevel-
oped country, it is obvious that the lack of good transportation is inhibiting their economic
prosperity and personal convenience. The current physical decay of the highway infrastruc-
ture in the United States and the lack of investment for improvement is a critical concern to
many private and public organizations because of its importance to continued economic
growth and global expansion.
The development of the global economy has increased the criticality of trans-
portation for economic, political, and national defense purposes. Globalization has
brought many benefits to countries throughout the world, but we are much more inter-
dependent and at risk when some calamity occurs in another part of the world that
can interrupt supply of raw materials or finished products and/or shut down a market
for domestic products. Efficient and effective transportation can help to mitigate the
impact, for example, of a natural disaster such as a hurricane, typhoon, or flood by pro-
viding products and services from alternate sources and access to other markets quickly
and efficiently.
The importance of transportation cannot be overemphasized. It is a necessary ingredi-
ent for the progress and well-being of all citizens. An appreciation and understanding of its
historical and economic role and significance, as well its political and social significance, is
a requisite for managers in any organization and other interested parties. An appreciation
of this tenet will be an important part of the discussion in this text.

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Global Supply Chains: The Role and Importance of Transportation 5

Introduction
In previous editions of this text, transportation was referred to as the “glue” that holds the
supply chain together and an enabler of the underlying tactics and strategies that have cat-
apulted supply chain management to the level of acceptance, which it now enjoys in many
organizations, both private and public. For example, transportation management systems
technology along with complimentary software is used by many organizations to improve
logistics and supply chain efficiency, effectiveness, and execution. Transportation has moved
from playing a reactive or supporting role to a role that is more proactive and enabling. In
other words, transportation has become much more strategic for organizations in determin-
ing their ability to compete in the growing and complex global marketplace.
The global marketplace is also changing on a continuing basis, that is, it has become
very dynamic, and is buffeted by economic, political, social, and natural forces, which can
impact a country or region negatively or positively in the short or long run. For example,
the high cost of fuel has impacted the rates charged by transportation service providers,
which in turn impacts the distance that it is economically feasible to transport goods.
The cost of labor can change over time to the disadvantage of some geographic areas and
benefit others. For example, the labor cost advantage that China enjoyed, along with low
rates for ocean carrier movement, had a positive impact on their ability to sell products
on a global basis. These advantages have diminished somewhat allowing other countries
to develop an improved competitive position because of market proximity, labor costs,
or other factors. These changes in turn impact global supply chains and their associated
flow of goods.
In this chapter, the initial focus will be upon developing an overview of the flow of global
commerce and trade overtime on a worldwide basis not only to understand the importance
and magnitude of global supply chain flows but also to gain some perspective on important
changes that have occurred. A variety of economic data will be used to illustrate the impact
of the overall changes that have occurred. The next section will examine the underlying
rationale and economics of global flows of goods and services. In other words, the “why” of
global flows will be discussed to understand the advantages of international trade to coun-
tries and consumers in contrast to the “what” of the first section of this chapter. The third
section will provide additional insights into the factors that can contribute to the economic
advancement and development of countries. The final section of the chapter will provide
an overview of the supply chain concept including its development, key characteristics, and
major activities.

Global Supply Chain Flows


Early in the 21st century, frequent reference was made to acronyms such as the BRIC
(Brazil, Russia, India, and China) or VISTA (Vietnam, Indonesia, South Africa, Turkey,
and Argentina) countries. The former were identified as the top emerging economies and
the latter as those developing at a fast pace. The development of the BRIC and VISTA
countries was seen an indication of opportunities for “sourcing” of materials, products, and
services and the identification of potential markets for the more developed economies such
as the United States, the European Union (EU), and Japan. Also, they were a sign of a more
economic balance in the world and continued growth. Consequently, one noted author 1
declared that the world was really flat because of the developing economies. Interestingly,
there have been some economic shifts already with respect to these countries, and the future
importance of some of the VISTA countries is not clear. For example, South Africa has

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6 CHAPTER 1

been added to the first group, BRICS, by some economic pundits. Nevertheless, all of this
supports the observation made earlier about the dynamic and competitive nature of world
markets. An important caveat is the potential for disruption caused by political instability,
associated acts of terrorism, and military actions, which can cause a major disruption in
global trade flows.
Figure 1-1 and Table 1-1 indicate export trade flows of merchandise from various coun-
try or region origins. In Figure 1-1, the size of the circle indicates the importance and vol-
ume of exports on a worldwide basis. It is interesting to note the large number of exporting
countries and the big differences in the volume. Table 1-1 shows the value of world exports
in U.S. dollars. China is clearly number one for exports of merchandise and the United States
is second, but what may be surprising is Germany being third. They are relatively close to
the United States in terms of the value of their exports. If we added up the value of exports
for all the EU countries, it would by far exceed the United States (about double). The EU
also compares favorably to the Asian block of countries in terms of exports.
Figure 1-2 and Table 1-2 show the import trade flows of merchandise into various
countries and regions. Figure 1-2 is interesting because it is a visual representation of the
magnitude of the value of imports and provides some perspective of the differences in the
world markets. In terms of regions, Exhibit 1-2 indicates that Asia is the largest importing
region and is followed by the EU. North America is third in terms of the value of imports.
Among individual countries, the United States is the largest importer, followed by China
and then Germany.
A comparison of relative shares of imports and exports provides some additional per-
spectives. China’s share of global exports in terms of value is 13.8 percent and their share of
imports is 10.1 percent making them a net exporter, whereas the United States by compari-
son is a net importer with 9.1 percent of merchandise exports and 13.8 percent of the global
imports. Germany is also a net exporter with exports representing 8.1 percent of the global

FIGURE 1-1 Export–Trade Flows of Merchandise

Economy Million US
Dollars
China 2,209,626.00
Germany United States 1,578,971.70
Germany 1,452,795.40
Japan 715,097.20
United States European Japan Netherlands 663,524.30
Union (28)
France 579,646.90
China
Korea, 559,632.00
Republic of
United 541,348.00
Kingdom
Hong Kong, 535,546.00
China
Russian 523,327.00
Federation
Italy 517,673.30
Belgium 468,817.80
Reporting country

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Global Supply Chains: The Role and Importance of Transportation 7

FIGURE 1-2 Import–Trade Flows of Merchandise

Economy Million US
Dollars
United States 2,329,059.80
Germany
China 1,949,992.00
United Germany 1,188,883.80
Kingdom Japan 833,166.10
United States European France 681,016.00
Union (28)
China United 655,318.60
Kingdom
Hong Kong, 622,276.40
China
Netherlands 589,768.10
Korea, 515,586.00
Republic of
Italy 477,391.50
Canada 474,270.00
India 466,042.10
Reporting country Belgium 450,706.00

total with imports of 6.3 percent of the total. There are economic implications associated
with these differences, but the merchandise flows do not provide a complete economic
picture because the value of services imported and exported are also important for the bal-
ance of payments of individual countries. However, the focus of this text is obviously upon
merchandise flows.
The importance of the so-called developed countries/economies is evident from the
information presented earlier, but additional insight can be gained by summarizing the
impact of the top countries in each category (see Tables 1-1 and 1-2). In 2015, the top 30
exporting countries accounted for 84 percent of the world’s exports, but the top three (China,
United States, and Germany) accounted for about 31 percent of the total exports. The top
30 importing countries accounted for 82.1 percent of the total imports, but the top three
(United States, China, and Germany) accounted for 30.1 percent of the total imports. The
data presented in Tables 1-1 and 1-2 substantiate the observation about the important role
of developed economies made earlier.
Additional insight can be gained by examining the growth in the volume of global trade
over the course of the last 47 years (see Table 1-3). The 30-year growth from 1970 to 1999
was steady. In recent years, especially the period from 2000 to the present, the growth has
been spectacular, except for a decline in export growth in 2001 and the global recession in
2009. The total volume of trade more than doubled, led by China, Japan, the United States,
and the EU. A number of factors came into play to explain the increased growth rate includ-
ing trade agreements among countries along with a reduction in tariffs, which promoted
global trade and its associated benefits. There was also greater acceptance of importing
finished products that were manufactured in foreign countries.
Traditionally, many countries imported raw materials that were scarce or not available
in the importing country, and they then produced finished products mostly for domes-
tic consumption. The raw materials were much lower in value than the finished products
that contributed to the imbalance of trade among developing and developed economies.
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Another random document with
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that far from wishing to force you to go on this trip with me, I only
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“Oh, go away,” cried Frances, blushing. “Don’t bother me! Can’t
you see I’m too busy to waste time now?”
And to illustrate the callousness of man to true love, it is
regrettable to state that Champney slipped out of the door at this
point, with an expression of great muscular tension about his mouth,
and no sooner was he in the hall than the brute reeled up against the
wall and, leaning there, laughed to a sinful degree.
Then he walked to the end of the hall, and entering a room, also
cluttered with trunks, he sat upon one of them and retold the scene
to the woman packing. “I never saw anything so delicious in its way,”
he laughed. “I really believe the medicine’s begun to work already.
But do you know, Frances promises to be a tremendous beauty. Just
now, when her cheeks and eyes were blazing so, she was simply
glorious to look at.” Which shows that Champney’s cool, disregarding
manner was not more than skin deep, and that unlimited
possibilities lay underneath. Perhaps, too, another potion was
beginning to work.
“I’m sorry she is so childish with you, Champney,” said Mrs. De
Witt.
“Don’t trouble yourself about that. I really don’t mind it; indeed, I
am afraid I rather enjoy it. It’s much rougher on her than on me, for
she really feels it, and it’s the person who loses his or her temper who
suffers the most.”
“I hope the dear child will try to be more amiable, for naturally
she’s sweetness itself, and it’s bad enough to be saddled with us
without making your trip worse than need be. It’s so good of you to
take us!”
“Dear lady,” answered Champney, tenderly, “it’s nothing but a
little set-off against your years of goodness to me. You have really
given me a second home; nothing I can ever do will make me other
than your debtor.”
“It’s nice to hear you say so, Champney,” said Mrs. De Witt,
affectionately. “I have always felt as if you were a son of mine.”
“Then don’t talk to me about my goodness in taking you.”
“But it is good of you.”
“I don’t think Freddy and Frances think so.”
“Oh, Champney! Tell me, how did you find out their foolishness?”
“That is a secret,” chuckled Champney, “that goes with me to the
grave.”

Nor was it any better for Cupid the next day at the steamer. The
evil genius of the little god, in the shape of Potter, persisted in
following Frances about, and not a moment did she or Freddy find to
swear constancy or anything else to each other. Only a hand squeeze,
while the whistle was blowing “all ashore,” did they get to feed their
hearts upon during the separation.
Freddy went home, and, going to his room, flung himself on his
bed, and moaned, and bit the pillow, and felt he was feeling great
thoughts, and thought he was having great feelings.
And the little lady?
“No,” she declared, “I don’t want to walk with you; I don’t want a
steamer chair; I don’t want anything; I only want to be left al-o-o-o-
o-ne,” and—running to her stateroom, she flung herself upon the
lounge and wept over her unhappiness. “Oh, Freddy, Freddy,” she
sobbed, “only be true to me, that’s all I ask.”
But, alas, how is humanity constituted! The next morning, Freddy,
after a final look at himself in a tall mirror, remarked to the vision:
“Yes, that’s very tony. Now, I’ll take a walk on the Avenue, so as to
give the girls a treat.” As for Frances, after an hour’s rapid walk with
Champney in the crisp, sunny air, she came down to the breakfast-
table, and said: “Yes, steward, I’ll begin with fruit and oatmeal, and
then I’ll have chocolate, and beefsteak, and an omelette, and fried
potatoes, and hot rolls, and marmalade. Oh! And, steward, do you
have griddle cakes?”
Thus, despite their mutual intentions, the thought of each other
lessened daily, till even the inevitable correspondence lost interest
and flagged. Frances discovered that London, Paris, and the Riviera
offered greater attractions than Freddy’s witless and vapid “chronicle
of small beer;” while Freddy found that listening to the conversation
of a girl, present, was a far better way of spending time than reading
the letters of a girl, absent. Finally, Frances found a letter at the
bankers at Berne which ended the correspondence,—a letter over
which she laughed so heartily that Champney looked up from his
own bundle of mail and asked, “What is it that’s so funny?”
“Freddy’s engaged to Kitty Maxwell,” replied Frances.
“I don’t think you ought to be so gleeful at other people’s
misfortunes,” reproved Champney, laughing himself, however, while
speaking, as if he, too, saw something humorous in the
announcement.
“I—I wasn’t—I was laughing at something else,” Frances told him.
“What?” asked Champney.
“A secret,” replied Frances, blushing a little, even while laughing.
“Not from me?” urged Champney.
“Yes; I sha’n’t even tell you. Not a person in the world will ever
know it, and I’m very glad,” asserted Frances.
“I suspect I know it already,” suggested Champney. “I am a great
hand at finding out secrets. I have a patent method.”
“What is that?” asked Frances.
“That, too, is a secret,” laughed Champney.

When next we meet any of our characters, they—or at least two of
them—are toiling up a steep mountain path in the Bavarian Tyrol.
Frances leads, for the way is narrow, and Champney follows.
Conversation is at a marked discount; but whether this is due to the
natural incompatibility of the two, or merely to the exertion of the
climb, is unknown to history.
“She gets lovelier every day,” finally remarked Champney.
Frances stopped, and turned. “What did you say?” she asked.
“I didn’t speak,” answered Champney.
“I’m sure you did,” said Frances.
“No,” denied Champney, “I was merely thinking.”
“You did say something, I’m sure,” responded Frances, turning,
and resuming the climb.
Another five minutes brought them to the top of a little plateau set
in between two ranges of mountains, and dividing two lakes, famous
the world over. Even after the couple reached their destination,
however, they stood silent for a minute. Then Frances exclaimed,—
“Isn’t it glorious?”
“Lovely,” assented Champney, emphatically, but staring all the
time at Frances, making it doubtful of what he was speaking.
Frances, being quite conscious of this gaze, looked all the harder at
the view. “The mountains shut in so grandly!” she remarked, after a
pause.
“Such perfect solitude!” said Champney, enthusiastically.
“Yes,” assented Frances, with apparent reluctance in admitting the
fact. “But I suppose we must be going down again; mama will be
lonely.”
Champney calmly seated himself on a stone, unstrung his field-
glass, and surveyed through it the edge of the lake, far below them.
“Your mother,” he announced, “is sitting on the rug, just where we
left her. Her back is against the tree, and she is pretending to read.
But she’s doing nothing of the kind. She is taking a nap on the sly.
Surely you don’t want to disturb her?”
“It must be nearly luncheon time.”
“The boatmen haven’t even begun to unpack yet. Johann is just
taking the Vöslauer out of the boat, to cool it in the lake. They won’t
be ready for half an hour.”
Frances began to look a little worried. There was a dangerous
persistence in this evident desire to remain on the alp. “I think I’ll go
down, anyway,” she said.
“You mustn’t do that,” begged Champney, laying the field-glass on
the rock.
“Why not?” demanded Frances.
“Because I have something to say to you,” said Champney.
Silence and apparent interest in the view on the part of Frances.
“Do you know,” asked Champney, “that I planned to be away for
only two months?”
“Yes.”
“And that I have been over here more than eight?”
“Oh, not so long as that,” denied Frances.
“Eight months and four days.”
“How quickly the time has gone!”
“But it has gone, and that’s the trouble. I have decided that I must
go back in September.”
Frances hesitated, and then said bravely, “We shall be very sorry to
have you go.”
“That makes it all the harder,” groaned Champney, rising and
joining Frances. “In fact, I hate so to leave you” (“you” can be plural
or singular) “over here that—that I want you to go back with me. Will
you?”
“Why, that is for mama and papa to settle,” remarked Frances,
artfully dodging the question, though perfectly understanding it.
“This isn’t to be settled by fathers and mothers. My dar—my—I
want you to go—because you have become so dear to me. I want to
tell you—to tell you how I have grown to love you in these months.
How happy you can make me by a single word. I—you—once you told
me you were not ‘my dear child.’ Oh, Frances, won’t you be my
dearest love?”
“If you want me to be,” acceded Frances.

One of the simplest laws of natural philosophy is that a thing
descends more easily than it ascends. Yet it took those two over four
times longer to come down than it had taken them to go up,—which
proves that love is superior to all the laws of gravity; though it is not
meant to suggest by this that it has aught to do with levity. From
among a variety of topics with which they beguiled this slow descent
the following sentences are selected:
“I can’t believe it yet,” marvelled Champney. “It doesn’t seem as if
our happiness could have depended on such a small chance.”
“What chance?”
“Why—on that evening. When I found your mother wasn’t in, I
half turned away, but after hesitating, decided to wait. And then,
when I found you two in the morning room, I decided that I would
leave you, and go and read in the library. I was just about to say so,
when you told me to sit down by you on the sofa. That led to our
coming off here together, and really finding out about each other. Of
course that was equivalent to my falling desperately in love.”
“But you could have done that at home,” laughed Frances, merrily.
“No, I should have come off here, and some other man would have
won you.”
“Champney! I never could love any one but you.”
Champney swallowed the absurd statement rapturously. “That’s
just like the angel that you are,” he declared.
“But I knew you had something to do with our coming,” asserted
Frances, “though you did deny it.”
“No; like a consummate donkey, I didn’t want to be bothered with
you. Conceive of it, dear one, that I could ever think you a bother!”
“You didn’t know me,” laughed Frances happily, and with no
intention of vanity.
“No, I should think not. I wanted your father to take you. But I
shall never want any one else to do that in the future.”
“But why did you want me to go to Europe, if it wasn’t to be with
me?”
“Why—um—because, dear one, I saw a little girl that night who
was longing so for love that she was accepting a cheap and flashy
counterfeit in its stead. I didn’t want her to waste a real heart on such
an apology for a man, and so I interfered.”
“But how did you know?” cried Frances, looking bewildered. “We
had only just—you couldn’t have known it then?”
“Yes.”
“How?”
Champney laughed as he replied: “That’s telling.”

And now, another leap, please, back to that fireplace, and sofa,
again occupied by two—but not the same two—or, at least, only half
the same.
“Well,” groaned Champney, “I suppose I ought to be going, for you
must look your prettiest to-morrow, otherwise malicious people will
say it’s a match arranged for the business.”
“Let them,” laughed Frances. “By the way, how have you arranged
about that? You are such a good business man, and papa and mama
are so delighted, that I know you have the best of it.”
“Of course I have. And she’s sitting beside me now. But nothing
mercenary to-night, Madam,” ordered Champney. “Cupid, not
cupidity.”
“Well, Champney, dear, at least do tell me how you found out
about—about—” Frances stopped there.
“Never,” persisted Champney, nestling back on the sofa and
laughing.
“I don’t think it’s nice for a man to have secrets from his wife,”
reproved Frances, taking an eminently feminine view of man’s
knowledge.
“That is to be,” corrected Champney.
“Will you tell me—after to-morrow?”
“No.”
“Why not?”
“It’s too good to be told.”
“Ah, Champney!” And a small hand strayed round his neck, and
rested lightly against his cheek. Champney looked very contented.
“Please, dear.” And a pair of lips came dangerously close to his
own.
Champney groaned a satisfied groan. “Well,” he began, “do you
remember when I came in the evening before we sailed, how Freddy
was sitting over there, and you were sitting just where you are?”
“Yes.”
“And how you let me sit down here, just where I am?”
“Yes.”
“And how I chatted for a moment and then suddenly became
silent?”
“Yes.”
“That was when I discovered it.”
“How?”
“I found that the seat I was sitting in was warm!”
“SAUCE FOR THE GOOSE IS SAUCE FOR THE
GANDER”

“Oh, my dear!” cried her mother.


“I hope you have properly considered? He is charming, of course,
but—well—he is such a club habitué.”
“What? Well, well!” exclaimed her father. “Bless me, Meg, I had no
idea— Give me a kiss, if you have any to spare for your old dad now.
Why, of course, I consent, if you care for him. Only tell Mr. Tyler I
hear he spends too much time at his clubs.”
“Margaret! How nice!” ejaculated her sister. “I’ve liked him from
the start, and hoped—people said he was too fond of his club ever to
care to marry, and so I thought—but now it’s all right.”
“I knew he meant biz,” asserted her brother, “the moment he
began to keep away from the club, and put in so much time with
you.”
“I cannot tell you, my dearest Margaret (if I may call you that?),”
wrote his mother, “how happy I am over what my dear boy has just
told me. The luxury and ease of club life are now so great that I had
almost feared Harry could not be weaned from them. But since he
has chosen such a dear, beautiful, and clever girl, my worst anxiety is
over.”
“You are indeed to be congratulated, niece,” declared her aunt. “He
is a most eligible parti—good looks, position, and wealth. If you can
only keep him away from his clubs, I am confident you will be a very
happy and domestic couple.”
“I have been certain of it for weeks,” her dearest feminine friend
assured her. “There isn’t a man I would rather have had you take, for
he is so much at his club that I shall still see something of you.”
“Er, Miss Brewster,” said one of her rejected lovers, “let me offer
you my best wishes. At the club we all swear by Harry, and we
actually think of going into mourning over the loss. Er, the fellows
are laying bets as to whether we shall ever see him there again. The
odds are six to one on the club,—but the fellows don’t know you, you
know.”
“I want to offer you my heartiest congratulations,” gushed the girl
who had tried for him. “Mr. Tyler has always been one of my best
friends, and I am sure you will be very happy. He isn’t, of course,
very fond of women’s society, but— Have you asked him to resign
from his clubs?”

“Don’t you want to sit down, Harry?” asked Margaret, making
room on the little sofa beside the fire.
The young couple had enjoyed four months of ecstatic travel, thirty
days of chaos while they settled their household goods, and then a
recurring Indian-summer honeymoon of two months in front of their
own fireside in the charmingly cosey library where the above remark
was made. Upon this particular evening, however, Harry, in
following his wife from the dining-room, took neither his customary
seat beside his wife on the sofa nor lighted a cigar. On the contrary,
he stood leaning against the mantel with anything but an expression
or attitude of ease, and, noting this, Margaret had asked her
question.
“Not to-night, dear,” said Harry. “The truth is—well—I met
Parmlee on my way up town, and I—that is—he asked me to come
round to the club this evening—and, well—I didn’t like to disappoint
him. And then, a fellow mustn’t stag—that is—don’t you think, my
darling, that it’s a mistake for married people to see too much of each
other—and—”
“Oh, Harry!” cried Margaret, interrupting and rising. “You said
you never could have enough—”
“And I can’t, dearest,” interrupted Harry, hurriedly. “But you know
— Well—can’t you—”
“I feel as if it were the beginning of the end,” said Margaret, wildly.
“Now, my darling,” pleaded Harry, “do be reasonable. You know—
There, don’t cry. I won’t go. Sit down here and let me tell you how
much I love you.”
This occupied some time, but the clock never told on them, so it is
impossible to say just how long. Presently Margaret said:
“Harry, did you really want to—to leave me?”
“Not a bit,” lied Harry. “It was only to keep my word to Parmlee.”
“I suppose it’s too late now?” questioned Margaret, hopefully.
“Late? Oh, no! Fun’s just beginning. But I’m going to stay with
you, sweetheart.”
There was a moment’s silence, and then Margaret said: “If you
want to go, I want you to do it, Harry.”
“Well,” responded Harry, rising, “if you insist, dearest.”
“I do,” assented Margaret, in the most faint-hearted of voices.
“That’s a darling!” said her husband. “It’s half-past nine, so you’ll
only have a few minutes of loneliness before you go to bed.”
“I sha’n’t go to bed, Harry,” sighed Margaret, dolefully.
“Why, my darling,” protested Harry, a little irritably, “you don’t
want to make me miserable thinking of you as here by yourself.
Please be reasonable and don’t sit up for me. Leave me free to come
home when I want.”
“Very well, Harry,” acceded Margaret, dutifully, “if you insist I
won’t wait for your return.”
Harry took the charming face in his hands, and kissed each eyelid,
and then the lips. “I don’t deserve such an angel,” he asserted, his
conscience pricking him, “and— Oh, hang Parmlee!” he growled, as
her eyes, a little misty, looked up into his own. However, she
belonged to him, and there were plenty of evenings, and—well—
“Good-night, my treasure,” he ended.

Margaret remained standing where Harry had left her until she
heard the front door close; then she collapsed on the sofa and softly
sobbed her sense of desertion and grief into the pillow. The warnings
of her family and friends recurred to her, and added to the pain of
the moment a direful dread of the future. Not knowing that most
bachelors are regular club men merely because it is the nearest
approach to home life they can attain, she dwelt on his having been
apparently wedded to these comforters of men, before marriage, and
inferred a return to his former daily frequenting of them.
Her grief was keen enough to prevent her from noticing that the
front door was presently opened, and not till she heard a faint cough
in the room did she raise her head from the pillow. It was to find a
servant with his back turned to the sofa, occupied, apparently, in
setting a chair in a position entirely unsuited to it,—a proceeding he
made far more noisy than became a well-trained butler, and which
he accompanied with two more coughs.
Hurriedly wiping her eyes, Margaret asked, “What is it, Craig?”
With his eyes carefully focussed to see everything but his
mistress’s face, the man came forward and held out his tray.
Almost mechanically she took the card upon it, and after a mere
glance she directed,—“Say that Mrs. Tyler is not receiving this
evening, and begs to be excused.”
Left alone once more, the young wife sat down upon a stool near
the fire, and looked into the blaze, idly twirling the card. “I wonder,”
she soliloquised presently, “if he would have done the same.” Again
she lapsed into meditation, for a few minutes; then suddenly she sat
up straight, with an air of sudden interest which was clearly derived
from her own thoughts. A moment later, she gave a short, hesitating
laugh. “If I only dared! I wonder if he would? Men are—” she said
disconnectedly; but even as she spoke, her face softened. “Poor
dear!” she murmured tenderly. Yet the words of pity melted into
another laugh, and this time merriment and not guilt was as the
dominant note. Springing to her feet with vivacity, she sped into the
hall, and placed the card on the tray, and that in turn conspicuously
on the hatrack. A second action consisted in turning on all the
electric lights of the chandelier. This done, she touched the bell.
“You may close the house, Craig,” she ordered, when the servant
responded to the summons, “but as Mr. Tyler has gone to his club, I
wish you to leave these lights just as they are. I prefer that he should
not come home to a darkened house, so don’t turn out one.” Giving
one last glance, half merry and half guilty, at the bit of pasteboard
put in so prominent a position, Margaret lightly tripped upstairs,
humming something to herself.

Meantime Harry had wended his way to the club.
“Hello, Tyler!” said the man his wife had refused. “Don’t mean to
say you’ve actually ceased to be one of the ‘submerged tenth?’ How
and where is your superior moiety?”
“When I left Mrs. Tyler before her fire, ten minutes ago, she was
very well.”
“By George, if I had as clever and pretty a wife I don’t think I
should dare to leave her alone. I should be afraid of the other men.”
Harry turned away to hide his frown, but as he went towards the
door of the billiard room, rejoined: “Perhaps it wouldn’t be safe with
your wife.” To himself he carolled gleefully: “That cuts both ways.”
“But you are not afraid, I understand,” called the man, irritatingly,
“so I take it you won’t mind if I drop round there for a few moments
this evening, eh?”
“Certainly not,” responded Harry, suavely, but gritting his teeth.
“Hang the fellow,” he muttered. “How do such cads ever get into
decent clubs? As if Margaret’s refusing him twice wasn’t enough to
make him understand that she doesn’t want him round!”
Tyler’s anger was quickly forgotten in the warm reception his
cronies gave him, and a tumbler of “unsweetened” and a cue quickly
made him forget both the incident and the passing hours. Not till the
marker notified the players that the time limit had come did he wake
to the fact that it was two o’clock.
With a sense of guilt the husband hurried home. In the hallway, as
he took off hat and coat, he noticed the card, and picked it up. “So he
did come,” he growled, with a frown. “I hope Meg had gone to bed
before he got here. Not, of course, that it really matters,” he went on.
“She told me she never could endure him, so he’s welcome to call as
often as he likes to be snubbed.” To prove how little he cared, the
husband crushed the card viciously, and tossed it on the floor.
The light in Margaret’s room was burning low, Harry noticed when
he had ascended the stairs, and, peeping in, he saw that she was
sleeping peacefully. Entering quietly, he looked at her for a moment,
thinking with a little pang that he had given her pain. “You don’t
deserve such an angel,” he said aloud. “See how she has done just
what you asked her to do, with never a word of— There isn’t another
woman who would have taken it so sweetly. You’re an ass! And for
what? Four hours of—of nothing, when I might have been with her.”
He leaned down to very softly kiss a stray curl, and went towards his
own room, while saying: “How pretty and dainty she is! She’s worth
all the clubs in the world!” What was more, for a minute he believed
it.
The moment Harry was gone Margaret opened her eyes very wide,
rose softly, and looked at the clock. Then she went back to bed,
smiling demurely.

The next morning, when Harry entered the breakfast room a little
late, he was received with a kiss, and no word of reproach. Margaret
chatted over the meal in her usual entertaining, happy mood, telling
him the news she had already extracted from the morning’s paper.
“She’s too clever ever to nag a man,” thought Harry, and assured
that he was not to be taken to task, he became equally amiable, and
told her whom he had seen at the club, and of his score.
“I’m glad you had such a pleasant evening!” said Margaret,
sweetly. “I hope you didn’t stay so late as to tire yourself.”
“I didn’t notice the time,” fibbed Harry, “but probably I was in by
twelve.”
“Oh, no, dear,” said Margaret, pleasantly, “for I didn’t get home till
after one myself, and you weren’t back then.”

Twenty times Harry has tried to persuade his wife into
acknowledging that she spoke in jest, but Margaret only looks at him
with wideopen, questioning eyes, as innocent as a child’s. Her
husband firmly believes that she went to bed ten minutes after he left
the house, and always ends his unsuccessful attempts to get her to
confess the fact by taking Margaret in his arms and telling her of his
belief. This faith his wife rewards with a tender kiss, but only a kiss,
and still maintains her demure silence.
Harry spends no more evenings at the club, and every woman who
knows him holds him up to other men as an ideal married Benedick.
THE CORTELYOU FEUD

It could never have happened to us anywhere in New York but at


Mrs. Baxter’s. I say this not with bitterness at, but in calm
recognition of, the merits and demerits of that universally esteemed
lady. Abroad, with the lords chamberlain, herald’s offices, and
peerages, it would be impossible. In the far West, where the
biography and genealogy of the leading families are not subjects for
polite conversation, it might occur frequently. But in New York, lying
between these two extremes, one is safe, except from accidents due
to the unfortunate existence of a peculiar class of people.
The kind I refer to are those described as having a good heart.
Such an organ involves, as a natural corollary, a weak head. These
qualities in combination are a terrible menace to society; for, owing
to the very goodness of heart, their possessors are pardoned over and
over again, and repeat their ill deeds with as much immunity from
punishment as a New York police captain. Every social circle has one
or more of these half-criminals, and in that in which my lot was cast
Mrs. Baxter was unequalled for the number, ingenuity, and
innocence of her mistakes. Omitting all hearsay and they-say
knowledge, I was her forty-seventh victim; and as pœnologists affirm
that more than half of the criminal acts are undiscovered, it can at
once be seen how society is menaced by people with good hearts.
The lady who always tells me when I do wrong—and to married
men I need not be more descriptive—has held me responsible for
that evening; and, since she married me, her husband is not the one
to impeach her discrimination. She insists that, knowing Mrs.
Baxter, I should have come early, and so had time to arrange matters
quietly. I appeal to any man if it would ever occur to him to get to a
dinner early on the possibility he was to sit next a lighted shell, in
order that he might express to his hostess his dislike of explosives.
All New York has known for years of our family feud. It’s been
common property ever since our esteemed ancestors thrashed it out
in court, to the enjoyment of the public and the disruption of our
family. For thirty years dinners, luncheons, yacht cruises, and house
parties have been arranged so as to keep a proper distance between
the descendants of my grandfather John Cortelyou and of his
nephew Dabney. Sometimes I have seen one of the latter at the
opposite end of a large dinner-table, and here and there I have had
other glimpses of them. But until that evening, no matter how close
chance brought us together, we had always succeeded in maintaining
a dignified unconsciousness of each other’s existence.
I was, let it be confessed, thirty minutes late, and merely accepting
the last little envelope on the tray the footman offered me, hurried
towards the drawing-room. On my way I naturally looked at the card
inside and read:
Mr. Pellew.
Miss Cortelyou.
That meant nothing to me. The name is not an uncommon one, and I
have taken in my aunts often enough to get accustomed to the
occurrence, even in the family. So, without a second thought of the
matter, I passed through the doorway and discharged my devoirs
with Mrs. Baxter.
“I was on the point of suicide, thinking you had failed me,” she
said. “As it is, Mr. and Mrs. Dana have just sent me word that they
can’t come because Milly has croup.”
“My note said half after seven,” I stated boldly. When one is very
late it is always best to put one’s hostess in the wrong, and a mistake
more or less to Mrs. Baxter was immaterial.
“Oh, never!” she declared, so guiltily that I was really sorry for her.
“Well, we can’t discuss it now. We were just going in without you,
and we’ll go on, leaving you to find your partner by the process of
elimination. I haven’t left you Hobson’s choice, however.”
I glanced round, and as the couples had gravitated together, I
easily picked out the only single figure left, and went towards it. She
was turned from me, standing by Ferdie Gallaudet and his partner,
who had not yet moved.
“That back is too young and pretty for Aunt Ellen or Madge,” was
my first thought. My second was a spoken one, and merely consisted
of the trite, “I am to have the pleasure, Miss Cortelyou.”
She was saying something to the girl, and went on saying it, with
her head over her shoulder, even as she rested her hand on my arm
and let me lead her away. And just as I was going to look at her, I
caught sight of Ferdie’s face, and fell to wondering what could ail him
that he looked so queer. We had been close to the door, and before
she had finished her remark, or I had ceased from wondering, we
were through it and in the half-gloom of the hall.
“I beg your pardon,” said she, turning to me, and speaking very
sweetly. “It was a message, and I had only just begun when you
came.”
“What a nuisance messages are!” was my remark. “What a nice
voice you have!” was my thought. Then we entered the dining-room,
and I glanced at my partner. It was Kate Cortelyou!
She looked at me at the same moment, and as our eyes met, an
expression of consternation appeared on both our faces. At least,
that’s what I felt in myself and saw in her. Horror succeeded as a
next sensation and expression. Womanlike, she cast her eyes
appealingly towards her hostess, and, manlike, I took a step towards
the hall door. In another second I think I should have bolted, but just
then Ferdie Gallaudet said, “Here’s your seat, Jack,” with a grin like a
Cheshire cat on his face. I looked at Kate and she looked at me. Then
we both looked at the chairs. Mechanically I stepped to them and
pulled out that on the right of mine. Kate’s eyelashes fluttered for a
moment, as if she were hesitating; then she slipped into the seat, and
the next moment I was sitting beside her. But enchantingly pretty as
I thought her (and I was either too fair-minded or she was too
beautiful for me not to acknowledge it, however much I might dislike
to do so), I could only wish I had broken my leg on my way to the
house.
I turned to my left to see if any escape were possible, but my
neighbour on that side was that horrible perpetual motion of a Mrs.
Marvin, and, besides, she was very properly occupied with her
partner. I peered furtively behind Kate to see if she could escape me,
for anything was better than the alternative. Next her were two
empty seats. Mrs. Baxter’s capacity for social blundering had done its
worst.
There is this to be said for the Cortelyou women, whether friends
or enemies: I’ve never seen one show the white feather in action. Just
as I was preparing to collapse under this accumulation of horrors,
Kate turned to me, with the friendliest of smiles, and murmured,—
“It’s ghastly, but every one except Mrs. Baxter is watching us.”
I took a furtive glimpse of the other guests. They were all
pretending to talk, but all clearly were missing nothing of our
tableau vivant. Wasn’t she clever to have seen it so quickly?
“They hope we’ll make a show of the family for their benefit,” I
growled.
“Can’t we—” suggested Kate, and then hesitated, and blushed very
prettily. The Cortelyou women are plucky, but Kate was only
nineteen.
I never was good as leader, but at the shafts I’m steady and
reliable. “Of course we can,” I responded, won by that blush.
“Don’t frown, then,” smiled Kate.
“I was not frowning at you,” I protested.
“But they’ll think you are,” she replied.
I tried to appear as pleased as Kate so successfully pretended to be,
and she rewarded me with an encouraging “That’s better,” and a very
refreshing look at her eyes.
“Now,” she continued, “how can we do it?”
“I’m pretty well up on the litany,” I whispered. “If you can do the
supplications I can respond with the ‘miserable sinner’ part.”
Kate laughed merrily, even while shaking her head reprovingly.
Kate has nice teeth. “You are painfully frank,” she told me.
“Frank?”
“Yes. You are probably not a bit more miserable than I am, but I
don’t groan aloud.”
“Oh, I say!” I exclaimed, rather horrified at the construction my
speech had been given. “It would be pure form, you know, quite as it
is in church, and not mean a bit more than it does when the sinner’s
pretty and wears a French gown.”
Kate drew her mouth down into a church-going expression, which
was very fetching in its demureness, but which wasn’t suitable for
our public performance, so I remarked:
“Don’t look so disapproving. The saintly vein suits the Madonna
type, but the Cortelyou forte lies in quite another direction.”
I won another laugh from those unsaintly lips. “You are worse than
I thought,” she added.
“Then you have thought of me?” I inquired, beginning to mellow
under her laugh. That was a mistake, for her face instantly became
serious, and her eyes gave a flash.
“What I think is my own concern,” she responded. The Cortelyou
women are stunning when they look haughty.
Being one of the family, however, I am too accustomed to the look
to be as entirely crushed by it as others are. “Who’s frowning now?” I
asked. I thought I’d learn what kind of a temper Kate had.
She still smiled as if she liked being put next me, but her eyes
gleamed, and I knew she’d pay me for my speech if the opportunity
occurred.
“We can’t begin like this,” she said. “Suggest something else.”
“I once heard of a poor couple in an English county who were
always sitting next each other, so they agreed to count alternative
tens up to a thousand,” I answered.
“I’m afraid you haven’t enough facial control for that,” replied
Kate, sweetly, appearing the picture of contentment. I thought her
remark unnecessary, considering we had been face to face only a few
minutes, and that she had just lost control of hers.
“Then suggest something yourself,” I muttered.
“As the photographer says, ‘A little more smile, please,’” corrected
Kate. “Yes, you unquestionably have the Cortelyou temper,” she
added serenely.
“If I had,” I asserted, “I should long since have turned to Mrs.
Marvin, who is dying for a listener.” I thought I’d let Kate understand
I wasn’t sitting next two empty chairs.

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