The evening herald. [volume] (Albuquerque, New Mexico) 1914-1922, 1921-10-16

.that rc-zitiy half she passengers IN
thc cxcureios train would have paid
Ibceo available. no the railway man
excr. on the other hand. an cxcur-
nion train Corresponds to an after
season vale. AZ which: once the de.
fun price are satisfied. the rest OF the
stock ~ SOLD off AZ prices sufficiently
reduced 10 effect ~c1carnnc4. or. TO
take another illustration. n railway
when It reduces rates or fares may be
%soEararsa 10 = hotel which In TIE
guest ses. a day and Gets a. but in
the o~ff-scaeon offers en- pension
tcrmn OF three gn.neaf a week, Tor
they cover ent-ofpocket expenses
for food. wages. and firing. while
efnpfy. and even the running es.
penses would not he met.
Cost r1us A Profit
Thcre u another respect IN which
railway management ma usefufiy
be compared with ordinary business.
No manufactures. except where BY
patent or otherwise he has a practi-
erai demand. expects 10 sell his out
put nj cost plus a fixed profit He
balances large profita here against
small profits or even probable losses
elsewhere What he lcoks to IL the
total profit on the whole business
TO retain his cuafomers. has 10 keep
a stock OF things so seldom demand
\ ed that he can hardly hope 20 make
La profit on them. He has to sell
particles Of smnil value but OF high
utility-augar is the stock instances
aaie OF articles OF comparative lux
ury 10 redress the balance. So too
| with a railway. A railway carries
pixs OF iron at a low rate, pigs Of
lead at n higher rate. n ingots OF
copper at a yet higher rate, not be-
approciabiy. but for precisely the
same reaxon thai the grocer makes
4 bigger profit on tea than on sugar.
or, again, a railway runs suburban
passenger trains at frequent inter.
yals In the middle OF the day and
gers are few nj the service unre-
munerative. because otherwise the
suburb would cease to be residential
ard the crowd in the trains in tho
morning and he evening would tend
no disappear.
Tcmpering the Wind.
No dissertation on railway rates
would be complete without discus
sion OF tho famous phrase charging
what the traffic will bear" This
has been described as a vile
phrase" a -maxim OF extortion."
Had the railway men been wise
enough 10 lengthen Il by two syl-
ing what the traffic VIII not bear
they would have escaped criticism
more easily. The present writer
once ventured 10 eugge that the
true phrase should have been tenn
pering the wind to the shorn lamb"
for this Is really the underlying
| principle.
Railway business differs from
most other businesses, thoubh not
from all, by the fact that the stand
Ing charges represent a very high
proportion Of the total cost Of car
riage. Roughly speaking. taking the
world over. we may say hat out OF
every sovereign charged to the public
oDethird only represents actual
cost OF operation, another one-third
Is absorbed In genral establishment
charges n maintenance Of the
plant; the remaining onethird goes
to remuneration OF capital. We may
70 a stage farther and say that Of
the third which represents actual
cost Of operation only a fraction ~
| ~chnrKeable against any individual
consignment, though there Ii a par
tiai exception to this In the case OF
articles such as coal. where the I'M
. ~ NNnN w W
large as 10 have a specialized car
/ rage cost OF their own.
Now the result OF this IL twofold.
the n aspect IL represented in the
railway maxim, ANY rate IL better
than no rate" which means TO cay
French economists call the extra ton
In almost negligible; and therefore
cvcn n minimum rate Yields some
margin OF direct profit. and accord
lnEiy the riiway II better off with
The traffic than without H. The
other aspect II that. as the minimum
rate on tho extra ton may do little
moro than cover tho extra cost OF
carrying u, somehow the deficiency
/ must be made up; some traffic must
not only pay It's share OF total cost
-perntion. maintenance. and cap
itgi charEes-but must make up the
share OF thes charges which the traf-
fic carried At the lowest rates falls
to pay, either because NJ higher
rates It Would not be uprofitnble
10 send Il, or because u has access
90 a cheaper form OF transport.
Classification.
The railway companies then tenn
per the wind to the shorn lamb by
the establishment Of what Ia known
aH q Classincation-thnt Ia. a division
Of all the articles known TO COM
merce into c~ategories. based mainly
on values, coal, iron ore. n dung
coming at the bottom, tea and cotton
cloth half way up. and Aiik and Gig.
airs at the top. II for the lowest
class the rate is Id per tor mile, u
will probably be 30 for the interme-
diato class and cd for tho highest.
Now n does not cost twice az much
Ia carry a hale OF ak or a chest OF
cigars as to carry n bale OF gray
shirtings. But whereas he latter
may be worth 100 pounds a ton. the
value Of the former may be 80 times
ms much. RAILWAYS being. hR they
are. n necessary Of modern life, Ia "
not reasonable and I'm accordance
with the accepted principle OF taxa.
ton. a. eNompiified IN our own grad
uated Income tax and the nd vaiorem
customs duties levied In most foreign
countries that moro than a percent.
age proportion OF the cost OF prOvid-
ing the railways should ho laid on
| An y u1IaI1a Tint thn