592 THE POPULAR SCIENCE MONTHLY. 



the local traffic as well" (p. 7). And they conclude their remarks upon 

 the subject as follows : " We venture to say that this average percent- 

 age of reduction for the last fifteen consecutive years will be a matter 

 of no little surprise to everybody who does not make the study of 

 freight tariffs a somewhat regular habit. Although we have made no 

 calculation to demonstrate it, we venture to affirm that an equal aver- 

 age reduction in the cost of any kind of service for which the people 

 pay a money consideration can not be found during the past fifteen 

 years " (p. 35). 



It will be seen from the foregoing that discriminations affecting 

 places are made by nature. The distribution of land and water on the 

 face of the earth produces a discrimination against inland places and 

 in favor of those located on water-courses or the sea. The accessi- 

 bility or inaccessibility of these places on the highway furnished by 

 nature is the basis of the discriminations affecting them on the high- 

 way supplied by man. The rapid and cheap communication afforded 

 by railroads has introduced a strong competitor to the water-routes, 

 and has to a great degree reduced the inequality established by nature. 

 But with the water-routes the highway is supplied without cost, its 

 use is free ; the carriage only is a charge upon the traffic. The cost 

 of transporting by water is thus cheaper than by land, and this must 

 always prevent the local inland rates by rail from being as low as the 

 rates on the free water-routes. 



If rates are not to be based on the principles by which, in compli- 

 ance with the demands of commerce, they have heretofore been de- 

 termined ; if those discriminations only are to be considered fair which 

 are based on the bulk and destructibility of articles ; then the single 

 rule remaining to apply to the discrimination of rates is that of distance 

 — the mileage basis. 



The advocates of State interference in the regulation of rates seem 

 to be possessed with the conviction that the true basis of charge is the 

 cost of the service, and they labor under the common error that the 

 mileage basis is a practical method of determining this. It will be 

 found, however, that the rates determined by the operation of com- 

 mercial requirements will coincide more nearly with the cost of the 

 service than can be the case with any artificial system which does not 

 recognize, as elements fairly affecting rates, the value of the service, 

 the volume of the traffic, and the competition of other routes. If the 

 railroad is not allowed to take traffic, which can net afford to pay the 

 standard rate, at whatever rate it can afford, if it charged more for 

 certain traffic than the value of the transportation to the shipper, that 

 traffic is lost. Now, the traffic that can afford to pay but very low 

 rates is composed of things that are of low price ; such, as I have 

 already mentioned, are the necessaries of life. These things form a 

 much greater portion of the company's traffic than any other equal 

 number of articles. Grain, for instance, from the fields of production 



