the largest amount of net profit from their traffic, and this they may attain in two ways either by carrying a large amount at low rates, or a small amount at high rates, and with diminished traffic expenses.
The working of these interests I may illustrate by a case suggested by Thünen's Der Isolirte Staat. A is a town the centre (the Absatzort) of several concentric circles or zones, segments of which are shown thus:—
First hypothesis: a supplied with food, building materials, &c., from the adjacent zones; a road a b c d connecting segments of such zones with a. In these circumstances the cultivation within a b b′ will be intensive, that within the outer zones more and more extensive; within a b b′ will be produced perishable articles, such as milk, and articles of great weight or bulk. Articles of small bulk or weight and articles of great value will be conveyed from the outer zones to a; articles of small value and great bulk or weight will not be conveyed from the outer zones; rent of the inner zone will be high; rent of the outer zones gradually diminishing. This is the condition of things while merchandise is conveyed by road.
Second hypothesis: a supplied as before, but a railway connecting the zones. There will be a tendency to equalise the economical conditions of the zones; nevertheless, the distinctions indicated above will be discernible. Suppose, to take one commodity, milk, a b b′, b c c′ b′, c d d′ c′, regions from which 24,000, 48,000, 96,000 quarts are procurable under the existing system of agriculture; 5d. the highest price at which milk can be sold at a; 2d. the lowest price at which a dairy farmer can make a profit; 1d. the rate of transport from a to b, b to c, c to d, sections of equal or almost equal length. With equal mileage rates only the producers within the two districts nearest the town can supply it; those within a b b′ making a profit of 2d., those within b c c′ b′ a profit of 1d. a quart. The total supply of a will be 72,000.
