charged on any highway. As the railroad was not built for the traffic of such points, which were, before its construction, provided with transportation facilities, but was for those places to which the highways of nature did not extend, there seems no injustice in charging the expenses of the highway to the places for which it was constructed.
It is sometimes stated that non-competitive points should have rates as low as are made to competitive points; and the reason is repeated that the latter rates, which are voluntarily made by the railroad, being presumably fair, it follows that the former rates, being higher, are unfair. But, if the traffic between all points paid but the cost of carriage, there would remain no provision for the highway and the necessary fixed charges, A rigid rule, then, preventing the discrimination between these places would leave the railroad the alternative of raising the rates at the competitive points, thus losing that traffic altogether; or reducing to a little more than the cost of carriage the rates at the non-competitive points, and so losing the greater portion of its income.
II. The competition in markets is a second cause of discrimination between places. A market, to be such, must be accessible from sources of supply. Its facilities for transportation must then be in proportion to its importance. Now, the great market cities of the world were established before the application of steam to transportation by land. It is a familiar fact that the commercial cities of the world are either on rivers or the sea; so it follows that the markets come in competition with water-routes, and usually also in competition with other railroads. But the competition is more than by parallel routes carrying traffic for equal or nearly equal distances. To reach the market at all with an article produced on the line of a railroad, it must be carried at a low enough rate to enable it to be sold in competition with the same article produced perhaps much nearer the market. Grain carried five hundred miles can sell for no more than grain carried fifty miles, and, if the conditions, of production are the same, the carrier must place them on an equality as to transportation. A long haul has thus to compete with a short haul, or abandon the market. If discriminations in favor of markets were not permitted, no grain could go by rail from Chicago and the West to the Atlantic seaboard and to Europe. But the discrimination would be made as it always has been made by the water-routes through the lakes and the St. Lawrence or Erie Canal, or down the Mississippi to New Orleans. The water-routes, however, have not an equal interest in developing the country that the railroads have; and, without the competition introduced by the latter, the rates by water would be greater than they are, and the countries whose shores they wash would be comparatively undeveloped. The railroad, in developing the resources of the country which it serves, not only secures thereby more traffic, which at the time adds to its net income; it increases as well the value of all its property. The highway being made by the railroad, and representing a large investment, a wise
