The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1884-10-01

fixed with that end in view, otherwise they
would not be consistent with the purposes OF
the investors, and railway construction
would come to standstill.
Rates are on q fair basis when they pay
operating expenses, repairs, ETC., and leave q
reasonable sum for distribution among the
owners of the property. When they fail to
do that they are too low, and when they
yield more they are too high. Low, or rather
reasonable rates. have made agricultural
pursuits profitable in all parts Of the coun-
try. But at all times the producer and con-
sumner have been obliged to pay the cost of
Transporting the produce from the farm of
the one to the home of the other, and the
cost has always been sum equal to a fair
yield on the value OF the carrier company's
property When the producer has large
amount Of produce to sell and the demand
OF the consumer is equal to the supply, the
increased volume of business can be moved
at lower rate per mile, and the consumer
and producer have the benefit of it, while
the transportation lines make just as much
as when the producer sends but little to
market
What effect railway construction has had
upon the agricultural districts, more partic-
1larly in the West, is clearly shown in the
general condition of the country, when COM
pared with what it was forty years ago.
Railways have stimulated immigration,
which, in turn, has brought millions of acres
of land under cultivation, making the con-
struction of still other roads practicable and
profitable, and insuring a reduction in the
cost of reaching the center of trade by in
creasing the volume of surplus produce.
Thus it is the railways and producers are de-
pendent one upon the other, and if left to
themselves the question of "cost of service"
would not be debated. Rates would then
adjust themselves to the law of supply and
demand, and the parties most interested
would be satisfied.
The railway and the farming interests are
so closely allied that the one can not be
disturbed without seriously damaging the
other, and so long as the internal carrying
trade is of greater importance than all other
interests combined, and is satisfied to regu-
late its rates and routes to the markets in
But advocates OF the construction of new
parallel lines, lines that force a division of
the traffic without increasing the general
business of the country tributary to them,
should remember when people put money
into railroads it is with the expectation that
q fair yield on the investment will be forth
coming on and alter the completion OF the
~, e. -.sl.
out corresponding increase in the traffic to
be moved, necessitates an increase IN the
rate per ton mile.
Whenever a division Of existing traffic is
forced, the loss in tonnage by the old lines
has to be made good by an advance in the
rates sufficient to make good the loss of bust
ness. Railways are obliged to make the
traffic pay the cost of service and fair profit
on the investment besides When the traffic
is heavy rates go down, and when light they
60 up. This equalizss the revenue of the
roads one year with another, and insures
steady and reasonable income on the value
not the cost, of the railway property. Rates
are, therefore, not high when they only
leave a small profit after paying cost of ser
vice, although the rate per ton per mile may
be an increase of 90 per cent. from what it
was in previous year when the tonnage
was greater. The instructions of time and
distance are removed in proportion to the
requirements of the consumer and the abil-
ity of the producer to supply his demands.
A wheat crop of say 600, 600 900 bushels,
with an equally large demand from home
and foreign consumption centers, shortens
the distance between the wheat fields and
the markets insomuch that the cost of NOV
ing the grain across the country adds but
little to the price per bushel received by the
producer. This of course, gives the con-
sumner cheap bread. But it is mainly be-
cause of the great volume of business which
enables the carrier companies to reduce the
rate so that the profits on the business moved
will be precisely the same as if the tonnage
were so per cent. less, and rates proportion
ately high-that is, high enough to insure
the same net yield as when the traffic was
up to the capacity OF the roads. The cost of
service, as a matter of fact, includes a fair
profit on the investment in the roads, and
the traffic is obliged to pay it.
When the traffic is light, its assessment is
high, and when heavy it pays right tolls.
Hence the greater the number of competing
lines built after the supply has reached the
highest Immediate demand for transporta-
ton facilities, the smaller the percentage of
tonnage to each line, and the greater the cost
of service to the traffic. The servant is
worthy of his hire, and the railroads are en-
titled to paying rates whether the traffic be
much or little. When little the burden falls
upon the consumer and the producer, and
when much there is no burden to be borne.
Therefore, under the ''unwritten laws OF
commerce" to increase transportation facili-
ties beyond the requirements of the traffic is
to commit a crime against the industrial in
terests On the count try. Hence competition
is not always the life of trade. Sometimes it
is grievous burden, and is always so when
it comes in the shape of unnecessary and
surplus transportation facilities
About THAI Joint Discussion.
Special to the Sentinel.
n. l. VI.