Truth. [volume] (Salt Lake City, Utah) 1901-1908, 1906-01-20
CHARGING WHAT THE TRAFFIC
WILL BEAR.

is set ICrtn by MT. h. L. NeWcOmD IN |
a pamphlet lately published in Wash
ington, says a writer in Harper's. The {
author goes to the root of the matter
by expounding the real significance of
the phrase, Charging what the traf-
fic will BEAR" phrase which, for one
reason or another seems to have ac-
quired an ill-repute. AS President A.
T. Hadley has pointed out, charging |
what the traffic will bear is very diff
ferent thing from charging what the |
traffic will not bear. Applied intelli- |
gently, the principle adjusts burdens
where they can be best borne. and de- |
velops a vast amount of business
which otherwise could not exist. Mr..
w. NJ Acworth, the highest English
authority on railway economics, tes-
titles in "The Elements of Railw ly
Economics" book published in 1905,
that charging what the traffic will
bear represents, in fact, a principle
not of extortion, but of moderation
and encouragement. To charge what
the traffic can bear is. in other words.
not to charge what the traffic cannot
bear. The true meaning of the phrase
is that, within certain limits-the
limit of what any particular traffic Cur
afford to pay, and the limit of what
a railway can afford to carry 1t for
railway charges for different categor-
les of traffic are fixed, not according
to an estimated cost of service, but,
roughly, on the principle of equality
of sacrifice on the part of the ship
pers. So regarded, what the traffic
will bear" is a principle not of rapa-
city, but of equitable concession to
the weaker members of the commu-
nifty. Mr.. Acworth suggests that If
railway managers in the past hid de-
clared that the principle on which
they made rates was "tempering the
wind to the shorn lamb" their de-
scriptive accuracy would have been
equally great. and their popularity
might have been greater. Translated
into railway language, the principle
involved in charging what the traffic
will bear means this: The total rail-
way revenue is made up, first, of
rates which, in the case of traffic I'M
able to bear a hieh rate, are so low
as to cover hardly more than actual
out-of-pocket expenses; secondly, of
rates which, in the case of medium
class traffic, cover both out-of-pocket
expenses and a proportionate part of
the unapportioned cost; and, finally,
e rates, which, in the case of high
lass traffic, after covering that traf-
fic's own out-of-pocket expenses,
leaves a large and disproportionate
surplus available as a contribution to-
ards the unapportioned expenses of
the low-class traffic, which such traf-
81 itself could not afford to bear.
It is well known that government
= te making has been tried in various
r untries, as, for instance, England,
C0nada, and Georgia. In the book to
Which we have just referred Mr.. Ac-
worth pronounces 1t a point of seri-
C"s practical Importance. to be con-
81 cred in connection with the Brit
~ railway legislation of 1891 and
1894 (by which parliament itself un.
dertook to fix railway rates., that this
legislation has done much to prevent
any natural and gradual lowering of
rates." Under this British legislation
railway company is still free to
lower rates, but has ceased to be free
t. raise rates. A manager may desire
to lower a rate, hoping thereby not
@ ly to benefit trade, but also, by in
c easing largely the volume of traffic,
t1 increase his own net earnings. This
Is only a hope, however. In the ma
TIRE of the case certainly is not attain
able in advance. A prudent manager,