DISCRIMINATION IN RAILWAY RATES. 593 



in the West is carried to Chicago or St. Louis entirely by car-loads, and 

 is forwarded thence by the train-load. Coal, petroleum, and provis- 

 ions in some cases afford a regular traffic by the train-load. These 

 articles being carried in large quantities are, as has been shown, car- 

 ried at a much less rate of cost than things shipped in small quantities. 

 The cost of the service thus bears an approximate relation to the rate 

 of charge. Again, the volume of the traffic is a cause of discrimina- 

 tion, if by reducing the rate the traffic can be sufficiently increased to 

 produce a greater net profit. And, again, it follows that the rate of 

 cost decreases with the reduced rate of citarge. In the reduction to 

 meet the competition of other lines to the same market, the discrimina- 

 tion is also made to get the traffic which could not otherwise be se- 

 cured. And the result, again, is a reduction in the rate of cost of the 

 service by the greater traffic usual to those markets or centers of indus- 

 try which are favored by the discriminating rate. 



Indeed, it has sufficiently appeared that all discriminations are 

 made to increase trafiic, and those things and places are favored most 

 which furnish the largest traffic. Now, as a larger traffic is carried at 

 a less rate of cost, it follows that there is a constant and fundamental 

 relation between the cost of the service and the rate of charge. There 

 is, in fact, as close a relation as it is possible to establish between them 

 by any system but one which would be prohibitory to a great portion 

 of the traffic. The mileage basis of rates, however, has and continues 

 to find many advocates, yet its impracticability has been so often illus- 

 trated that but brief mention of it seems here to be called for. Where 

 all circumstances of value, cost, competition, and quantity are equal, a 

 mileage rate is now applied by railroads, only reducing the rate per 

 mile gradually as the length of haul increases, thus making the rate 

 conform more nearly to the cost of service than if the same rate per 

 mile were applied for all distances. This is as near as it is practicable 

 to apply the principle, and is the rule so far as my information extends 

 on all American roads, as it is also on European roads, operated both 

 by private corporations and by governments. But where the circum- 

 stances of cost, competition, quantity, and value are different, that is, 

 for the greater portion of the traffic, the principle would result in pro- 

 hibition. From the preceding pages this result appears to me so ap- 

 parent as to need no further comment. A statement before me, how- 

 ever, of an impartial and informed body (the select Committee of the 

 Parliament of Great Britain on fares and rates of 1882), is so clear 

 and forcible an exposition of this point, and at the same time affords 

 an illustration of much that has herein been said on the subject of 

 discrimination in general, that I am led to make from it the follow- 

 ing quotation : " The form which the proposal for a fixed standard of 

 charges has usually taken is equal mileage, i. e., a charge for each 

 class of goods and passengers in proportion to the distance for which 

 they are carried." This point was strongly urged before the Royal 



VOL. XXTIII. — 38 



