Page:The Economic Journal Volume 1.djvu/524

502 'Another mode of fixing maxima which came before us in the course of our inquiry. was the method of fixing rates by relation to cost and profit on capital; in other words. that the cost of carriage should be ascertained. and that to this should be added whatever might be necessary. n order to produce the companies a fair return for their capital and labour. We find that there are absolute bars to the adoption of the method. In the first place, the cost of carriage cannot be accurately ascertained. The evidence which came before us entirely supports the conclusion arrived at by the Joint Committee of the House of Lords and the House of Commons in 1872. The original cost of the particular line; the cost of the carriage for the particular goods on that part of the line as compared with the carriage of other goods on the same line and of the same and other goods on other portions of the line; and the proportion of all these to the whole charges and expenses of the company are items which the companies themselves cannot give, and which we find it absolutely impossible to ascertain.'

It is possible to obtain the average cost per ton-mile. Ap- proximate results may with great dfficulty be procured wth respect to the conveyance and handling of particular articles normal circumstances; they are often produced before the Railway Commissioners in applications with respect to undue preference; though, speakg with some experience as to the preparation of such calculations, they are, and must be, largely conjectural. Even, however, if accurate figures could be got, they would be useless as a basis for rates. It would be intolerable that slag or scorise, copper ore or pg lead, a box of silk and a bag of refuse rags, should be charged alike because the cost of haulage and other incidetal services are the same.

' It was very early in the history of railroads perceived that if these agencies of commerce were to accomplish the greatest practicable good. the charges for transportation of different articles of freight could not be apportioned amongst such articles by reference to the cost of transporting them severally. for this. if the apportionment were possi- ble. would restrict within very narrow limits the commerce on articles where bulk or weight was large as compared with their value. On the system of apportioning the charges strictly to the cost. some kinds of commerce which have been very useful to the country. and have tended greatly to bring its different sections into more intimate business and social relations could never have grown to any considerable magnitude.' and in some cases would not have existed at all. for the simple reason that the value at the place of delivery would not equal the purchase price with the transportation added. The traffic would thus be precluded because the charge for carriage would be greater than it could bear. ' On the other hand, the rates for the carriage of articles which