WHOLESALE AND RETAIL 159 



pay on the value of the building for fire protection, although 

 he has little use for it, while his neighbor who puts up at half the 

 cost a building of corresponding size that is a fire-trap, gets off 

 with half the tax, although he is the one that makes the heavy 

 demand upon the system for fire protection and who ought to 

 pay most heavily for it. That, however, is a side issue at the 

 present time and we need not be detained by it. For our present 

 purpose it is only necessary to keep in mind that a substantial 

 part of the cost of the fire service must be carried in some way 

 by the meter rates. 



That leaves us with all the rest of the cost of the distribution 

 and that obviously should and must be carried by the water rates. 

 The question remains as to how it is to be best applied. 



One way is to divide the whole amount by the whole quantity 

 of water that is sold in the course of a year. If this is done a 

 price is found per 1000 gallons which represents the average 

 cost of distributing water to all customers, large and small, 

 and if this amount is added to the wholesale cost of the water it 

 produces a price per 1000 gallons which can be applied to all 

 quantities as a uniform rate and that will produce the required 

 revenue. 



But before doing this we must bear in mind that approxi- 

 mately half of the whole number of takers use 100 gallons per 

 day of water, or less, and that less than i per cent of takers are 

 industrial establishments using an average of 30,000 gallons 

 per day each, more or less. The cost of distributing water in 

 large quantities at wholesale to railroads and factories and to 

 places centrally located is a great deal less than the average cost 

 of distributing water in small quantities to all the small cus- 

 tomers, and it is fair to recognize in some way this difference in 

 cost of distribution. 



Another way of handling the matter is to put the whole of 

 this part of the distribution cost on the service charge. That 

 view has been warmly supported by some of those who have 

 studied the question. It can be backed by the idea that the pipes 

 in the streets are required in any event to give the required capac- 

 ity and that the size and cost of these pipes is practically unaf- 



