SELLING PRICES AND TERMS OF BUSINESS. IOI 



business-like manager will not confine his efforts to the sale 

 of gas, but will also search out the best and most profitable 

 outlets for the residuals that he has to dispose of. 



For many years there was a strong prejudice in favour of 

 one uniform price for gas, and many boards of directors 

 firmly refused to consider any other system of selling. At 

 first sight, and especially to those who are not familiar 

 with the intricacies of manufacturing costs, distribution 

 costs, establishment expenses, and the balance available for 

 dividend, it appears to be the only fair and just method. 

 But further inquiry shows that an absolutely equitable 

 charge to each customer, as represented by his actual cost, 

 plus an aliquot proportion of profit, is as complicated and 

 uncertain a problem as the valuation of a gas undertaking 

 for assessment. But modern practices in business have 

 rendered differential rates a necessity, and to-day there are 

 few who can claim a strict and unexceptional adherance to 

 the uniform rate. In speaking of differential rates, it will be 

 a convenience to follow the usual practice of regarding the 

 highest price as the current rate, and the lower prices as 

 discounts or rebates. Discounts may be based on the 

 purpose for which gas is used, with a view to the encourage- 

 ment of particular lines that are more profitable than others, 

 such as day consumption ; or on the quantity consumed, 

 with the object of increasing the consumption per 

 consumer ; or on prompt or short-period payment, in the 

 hope of reducing the floating or working capital. In all 

 cases where discounts are introduced, it should be done as 

 a tentative plan, on the strict understanding that its object 

 is to attain certain results, and that if for any reason the 

 experiment is not successful, it will be withdrawn. I make 

 this remark because it is no unusual thing to find, let us 

 say, a special discount for engine consumption in a district 



