1840.] 



THE CIVIL ENGINEER AND ARCHITECT'S JOURNAL. 



377 



EUett builils his theory, — that as the cost of carriage consists of two 

 parts, the actual expense of conveyance, including the maintenance of 

 the canal or railway, called the freight, and the profit of the canal pro- 

 prietors, called loll ; and as the freight must necessarily be directly 

 proportional to the distance, the toll (their simi being fixed) should be 

 inversely proportioned thereto. 



Even were this principle correct in theory, it would in practice be 

 exceedingly unjust, and therefore injurious. For nothing can be more 

 unreasonable tlian that the trade wiiich passes along the canal but 50 

 miles, should pay three times as much toll as that which comes 150 

 miles, thus paving actually nine timts its due proportion. Let it be 

 observed also that Mr. EUett's system is one that can be fully carried 

 out only on such a canal or railway, as has to sustain no competition 

 with common roads. On the latter the charges of conveyance will 

 always be directly proportioned to the distance, and being lowest for 

 the nearest parts, will of course successfully compete with the canal 

 or railway, whose toll is here the highest. The maximum charge for 

 conveyance being 4 dollars, and supposing with Mr. EUett that land 

 carriage is five-fold more expensive than by the "improvement," it 

 will, according to the scale given by him, be cheaper than the canal 

 for the first -10 miles, (one-tenth of its whole length,) and from so much 

 of the country, therefore the canal will derive no trade. With us the 

 proportion of the cost of land and canal carriage is much nearer, per- 

 haps greater than two to one ; and the portion of the country com- 

 manded by the superior cheapness of laud carriage, under Mr. EUett's 

 system of tolls, will be proportionately larger. Wherever there is the 

 competition of another conveyance, on which the charges are made 

 according to the distance, the inverse system of toll will be impracti- 

 cable. 



Leaving, therefore, for the present, the practical objections to Mr. 

 EUett's proposed system, I turn again to that which forms the basis of 

 his whole theory, and wdiich I conceive to be a most fallacious as- 

 sumption. I am indeed surprised that any one writing upon such a 

 subject, who ought to have some acquaintance with the principles of 

 Political Economy, should hazard, or should carelessly make, an as- 

 sumption so opposed to the mere elements of that science, as well as 

 to ordinary experience. So far from the cost of production of any arti- 

 cle being a fixed sum, throughout an extensive district of country, it 

 is dependent upon, and varies exceedingly with, a great many circum- 

 stances. Every one knows that there is a difference of prices in many 

 markets throughout the kingdom, and the price at the place of produc- 

 tion is, generally, the actual cost of production, added to the usual 

 profits. For reasons which will be noticed hereafter, the cost of pro- 

 duction, and consequently, prices differ less in an improved country 

 like England, than in one possessed of fewer artificial advantages, such 

 as America or Ireland. But the fact is notorious to every one, that 

 differences do exist in the expenses of production, at different places, 

 of commodities of the same quality, and of equal value at the place of 

 consumption. 



The cost of production is made up chiefly of rent, the wages of 

 labour, and the profits of the producer, (and, in manufactures, of the 

 price of the raw material.) Rent is well known to vary exceedingly 

 in different parts of the country, even for lands of the same kind, and 

 equal fertility. JVages differ too, not oiUy between the manufacturing 

 and agricultural districts, but also between different districts engaged 

 in the same occupations. Profits differ likewise, but being nearly in a 

 fixed proportion to the total cost, they need not be considered sepa- 

 rately. As, then, the component parts of the cost of production thus 

 vary throughout the country, their sum, the total cost, cannot be said 

 to be fixed. Yet Mr. EUett seems to have forgotten these facts, pal- 

 pable as they are to eveiy man's observation. 



There are, however, certain articles whose value is very small, and 

 the cost of production of which consists merely of the wages of the 

 labour employed upon it ; and this labour being of the coarsest kind, 

 its wages vary but little. Of such commodities the expense of pro- 

 duction cannot differ much, and may be said to be fixed. Such are 

 stone, lime, and, in a wooded country like America, timber, and per- 

 haps coal, ores, &c. It is to such products Mr. EUett chiefly applies 

 his theory, but he does not confine it to them. He intimates that some 

 other principles come into operation with reference to the more value- 

 able articles of trade. But as I have not seen his observation on that 

 part of the subject, and as it appears to me that his principle, if cor- 

 rect, must be equally applicable to every branch of trade, and as I know 

 that it has been so interpreted and applied by some of his readers, I 

 have discussed the subject generaUy, endeavouring to refute the theory 

 in its application to either division of canal trade. In certain cases, 

 then, it would appear that Mr. EUett's assumption is correct, that the 

 cost of production is fixed (or nearly so). But it so happens, that in 

 these instances, our author's system of tolls would be altogether im 

 practicable. The commodities are of such little value as to be scare 



worth removing, unless at a very small cost; they cannot, in general, 

 be brought from a distance, the necessary charge for freight, even if 

 there be no toll, acting as a prohibition ; and to have any trade, even 

 from the nearest places, you must levy only the lowest rate of toll. 

 Thus on the Irish Grand Canal the toll on stone is iid. per ton, and on 

 manure -id. per ton for any distance, — because at higher rates they 

 would scarcely be carried at all. And here, it is evident, there is no 

 room for graduation according to Mr. EUett's plan. 



But resuming the consideration of the cost of production, where it is 

 not fixed, let us examine into the causes of the differences that exist ; 

 why rent is high in one district, and low in another, and why wages 

 vary so much as they are found to do in different parts of the country. 

 Of course they all depend upon the economical principle of the rela- 

 tion of supply and demand. But in the same country, all parts of 

 which are subject to the same laws and conditions of trade, and all 

 contribute to the supply of the same great market, this relation be- 

 tween the supply and demand, that is the different values of rent and 

 wages in the various parts of this district, depends mostly upon their 

 respective distances from the place of consumption, and the facilities 

 of conveyance thither. Near a large town, rent and wages, and con- 

 sequently the cost of production, are high, because there the great 

 demand can be most I'asily supplied, and with very little expense for 

 carriage. Farther off, as the cost of conveying the products to the 

 markets increase with the distance, both rent and wages are lower. 

 And if a canal or railroad be made into the country, as it cheapens the 

 cost of conveyance, and thereby facilitates its supplying the market, it 

 raises rent and wages, or the cost of local production. Thus the true 

 state of the case is very different from Mr. EUett's theory. The cost 

 of production is not fixed ; it is found to depend on the charges for 

 conveyance, varying inversely with them, (not in the same ratio,) that 

 is, with the distance. Of course I speak here of the natural charge 

 for conveyance, which consists of freight only, and is always propor- 

 tionate to the distance. Such is the cost of carriage upon common 

 roads, and as these are generally the first modes of conveyance, and 

 the most universal, it is by the principles and circumstances that relate 

 to them the cost of production is generally governed. In England the 

 facilities for transport are so great, and so ecjually diftused throughout 

 every part of the country, that the difference in the cost of production 

 in different places is small, as I before mentioned. But in countries 

 where the improved methods of conveyance are few, the diflerence of 

 price, or the cost of production, at places at unequal distances from 

 the market, or not having the same facilities, is often very striking. 

 In Ireland, the price of potatoes, for instance, is frequently found to 

 differ to an astonishing degree, in various parts more or less remote 

 from the large towns ; and the only cause appears to be the expense 

 of carriage, which being in proportion to the distance, increases or 

 diminishes the cost of production and the facility of removal. 



If, then, the cost of production is found to vary, and inversely with 

 the distance, the diflerence between it and the market price is not 

 fixed, but varies directly with the distance ; and the total sum which 

 the commodity will bear as the cost of conveyance to the market is a 

 varying quantity, increasing with the distance. The freight, one of 

 its parts, is proportioned to the distance, and the other portion, the 

 toll, should also, in general, be regulated by the same proportion. 

 There are, of course, many circumstances which modify this law, at 

 least in practice ; but looking at the abstract question, I think that the 

 theory of tolls, which the principles of economy and the laws that 

 govern the relations of value and price indicate, is the simple, natural, 

 and just system of charging according to the distance, in proportion 

 to the benefit conferred, or to "the value given." 



This is not only the true theory, but it is also the only system that 

 is practicable, wherever there is the competition of common roads ; it 

 is easy to show that, in all cases, it would be the most profitable sys- 

 tem also, — the most productive of revenue to the proprietors of the 

 canal or railway; and at the same time the most impartial, and the 

 most equally advantageous to every part of the country. Each district 

 has its own advantages, in which it is superior to the others, and, under 

 a natural system, its facilities for production and transport are propor- 

 tioned duly to its means ; while the retrograde principle must have 

 the effect of encouraging the remoter districts, and depressing the 

 nearer, — by destroying the natural and equable balance, which prevails 

 in the social commonwealth. 



I cannot trespass on your space. Sir, by entering further on the proofs 

 that the natural system is also the most productive ; neither could I 

 do so without introducing diagrams, which would be found to differ 

 very much indeed from those of Mr. EUett. I shall only add, that I 

 hold the true and most effectual mode of gaining for a canal or railroad 

 the largest amount of traile and revenue to be moderate tolls, charged 

 fairly according to the distance. I am convinced that the charges 

 upon most canals and railways are much too high ; that considerably 



