service below cost. This charge is so frequently made, and the facts are so commonly misunderstood, that the subject deserves to be followed further.
We are for the present considering only the discrimination between things as determining the rate of their transportation. Discriminations from other causes do not change this result. Competition by other lines between the same points, or to the same market, produces a general reduction in rules, but there remains the same inequality in the particular things shipped. The lowest rates will be given on the staple products of the country which are moved in the largest quantities and higher rates on merchandise shipped in smaller consignments. For instance, the chief products of the West—grain, provisions, and flour—are shipped to the seaboard for about one half the rate charged on miscellaneous merchandise. And this is the same, whether the route be by lake, canal, or any of the various lines of rail.
One of the natural principles of regulating rates which has been mentioned is the power possessed by the railroad of increasing its net income by increasing its traffic at lower rates. This follows from the fact that a large portion of the expenses are fixed—are not changed by the increase or decrease of traffic; so that an augmented traffic adds to but a portion of the expenses of the roads—to those not fixed. The average rate of cost per ton per mile thus decreases, other things equal, as the traffic increases. This result will appear more definite by the use of figures. The census for 1880[1] shows that the annual interest, maintenance, and operation charges paid at that time by the railroads of the United States, amounted to about the sum of $542,000,000, classified as follows:
| Amount. | Per cent | |
| 1. Interest paid on debt[2] | $187,250,826 | 32·6 |
| 2. General officers, legal expenses, taxes, etc. | 59,541,684 | 11·0 |
| 3. Maintenance of bridges, buildings, and way, | 83,722,748 | 15·8 |
| 4. Maintenance of engines and cars | 54,985,340 | 10·1 |
| 6. Conducting transportation | 88,230,621 | 16·3 |
| 6. Motive power—fuel, engine-men, etc. | 66,219,576 | 12·2 |
| Total charges paid. | $541,950,795 | 100·0 |
It appears from these figures that the fixed expenses of the average railroad in the United States, which are a necessary charge on whatever traffic is carried, are:
| 1. Interest | 34·6 | per cent. |
| 2. General expenses, taxes, etc. | 11·0 | "" |
| 3. Maintenance of way | 15·8 | "" |
| 4. A portion of the maintenance of rolling-stock, which, if we assume to be one half, will be | 5·05 | "" |
| ——— | ||
| Making a total of | 66.45 | "" |
