Fort Worth gazette. [volume] (Fort Worth, Tex.) 1891-1898, 1891-08-16

There is no value in the ground or mine
until it is created by the investment of CAPT
tal in a means of transportation, whether
that is by the wheel-barrow. by a cart, by
wagon. by rail or by water
Mr.. Wrights distribution is certainly
correct, as long as there is enough realized
to pay the cost of production and the return
on the capital employed in production.
After paving the previous charges in his
list of distribution, if a sufficient amount is
not realized to pay the capitalist on his
capital invested III production and the car
rier nevertheless insists on receiving the
full amount on his investment, the pro-
Queer or capitalists viii go out of business
and in the end the carrier viii lose it en-
tirely hence self interest will suggest to
the carrier that he should shrink his
charges to such extent as to permit the
business TO go on, if such shrinkage does
not permanently bring the carrier below
the cost of transp ortation service. This is.
IN nutshell, what value of service, or 9th
erwlse expressed, what the traffic will bear,
signifies.
In the quotation Mr.. Wright also answers
the question that has been asked as 10 what
extent-the railway company could LOOK TO
local traffic and to what extent to through
traffic for remuneration on its capital. Tn
less a railroad is built primarily for the
purpose of through traffic, it naturally looks
to the country through which i. is con-
structed for its support, for il was built
principally for the benefit Of that country,
and that country primarily receives the
benefit of its construction. a railroad in
Texas certainly does not look primarily to
the people of New York for support, and
vice versa. If road in Texas by partici-
pating in low through rates can attract
through business and derive some profit
therefrom. and TO that extent lessen the To-
cal charges, it should do so, but under the
ff local ffip m
essarlly meet whatever deficit there may be
after apprOprating the earnings from the
through traffic to the payment Of fixed
CHARGES and dividends.
In the able paper of Mr.. Wright there is
an apparent conflict, as in one place he con-
tends that the profit to the producer is not
10 be considered in determining the trans
portation charge, and in another place he
indicates that il is part of the province of
the traffic manager to so classify freight and
fixed charges rs to pay profit to the pro-
ducer while increasing the traffic.
We think We have fully shown what con-
Germ the railway company has in the profits
Of the producer and need not pursue the
subject further.
The fact that the commerce and pro
duction of Texas is constantly increasing
under the present freight rates. demon
stratcs that il genera. they do rot exceed
the value of service, ana hence unless 1t can
be shown that the carriers are receiving
larger revenue on the investment than they
are entitled to. general reduction in rates
can not be justly made. As longas the rail
WAYS are not earning too much on their in
yesJmeut. the people of Texas have no right
to demand or expect the railways to work
for them for
LESS THAN THEIR SERVICES ARE ACTUALLY
WORTH.
1t remains to consider the prOviso, that
where the demand al a point of cOnsump-
tjou can be supplied from either Of two or
more places ON the same route, from one of
which the cost Of service is lower. a lower
rate should be given from such point. If
the carrier could haul all Of the freight
from the place where the cost of service is
less, even at less rate, the carrier will
necessarily make more profit ont of the
haul from that point II the tariffs are so
arranged as to permit One-haif of the sup
plies to be hauled from the place where the
cost of service is higher, 4 loss results to
the carrier which must be borne in some
way. Ii will be placed either entirely on
the consuming point. on the carrier or on
It's customers in general.
+, for the purpose Of allowing both points
10 do business with the consuming point
the carrier raises the rate from the place
where the cost of service is less, to make IN
for The loss by the additional cost Of service
from the other point. the result IS that the
rriUe Of the article is increased at the point
Of consumption and the burden placed en-
firelv on the Consumcrat that place If this
not done. the carrier must reimburse him
self for the loss by charging patrons gencr-
ally 2 higher rate. or If the condition of the
traffic is such that rates cannot be so ar
RANGED as to nav the carrier an adequate re-
turn. the loss will rest on the carrier.
In this instance there is nothing contrib
uted to the general treasury by the point
from which the service is high. but on the
contrarv, there is a depletion of the treas
ur-. aud hence positive injury as before
explained. either on the point of consump-
ton alone or on the patrons of the carrier
generally or temDurarilv on the carrier
until the conditions offhe general traffic are
such that he can reimburse himself from il.
In this character Of case, if the point from
which the cost of service is greater be given
a rate to enable it to do business. ii is de-
parting from the principle Of correct rate
making. and entering the field of protec-
ton. pure and simple Regulating the com
merce OF the country, of which supposed
action of the carriers so much COMPLAINT
has been mndel. and the result is the same
whether the protection is Afforded by the
railway tariff or a tariff duty, or by bounty.
If the priu,iple IS bad in one instance.
IT'S IN ALL.
We have assumed that the cost of pro-
ductiOn at the two places was the same
OF course if the cost Of production is pro-
uortionataly less at the point from which
The cost of service is greater, ii could still
do business with the rates adjusted with
reference to cost of service II such CON
ditfou did not exist the consumer would
still be protected. for whenever the point