Glasses of Pools. 
67 
eral classes according to the basis of apportionment, as terri¬ 
torial, traffic and money pools. 2 In the first, each road is 
assigned a distinct territory from which to draw its traffic, and 
within which it is secured from all competition. In the second, 
the traffic is diverted by common agreement to the different 
roads according to pre-arranged percentages. Then any road 
carrying more than its assigned percentage is required to divide 
all profits arising from such traffic among the other roads 
included in the pool according to the same ratio at which the 
traffic was to have been divided. In the third form all the com¬ 
peting roads carry at rates fixed by common agreement, and the 
proceeds are turned into a common fund or “joint purse” which 
is divided among the roads according to percentages previously 
agreed upon. 
The first of these forms is obviously impossible of application 
in the United States, owing to the complexity of our railway 
system. It is found only in a few countries of Continental 
Europe, particularly France, where the country was partitioned 
out among a few great railroads during the construction period. 
The second form is the one which was in vogue in the United 
States before the passage of the Interstate Commerce Act ? 
although there were also in existence some examples of the last 
form, or money pool. Since the pool is primarily a rate arrange¬ 
ment, and the rate question is a fundamental one in all dis¬ 
cussions of transportation, it is fitting that the pool should be 
first discussed in its relation to rates. 
The fundamental fact to be borne in mind in any discussion 
of the rate question, is that rates at the present time, and 
there is no prospect of change so far as I can see, are fixed upon 
the principle of “ what the traffic will bear. ” 3 When this prin¬ 
ciple is analyzed it is found to mean simply that the funda¬ 
mental idea in the fixing of rates shall be the value of the 
service to the shipper. This principle is then modified in one 
2 Cohn, Englische Eisenbahnpolitik, vol. i, pp. 329-330, where a dif¬ 
ferent classification is given, founded upon historical development, 
Also Midgeley, International Review, vol. vi, pp. 503. 
3 Taussig, Contribution to the Theory of Railroad Rates, pp. 17-18. 
Interstate Commerce Report, 1890, pp. 15-16. 
