borrowed from mediæval times, that their “geographical” or “natural advantages” are diminished. Other traders blame railway companies for not sufficiently effacing natural disadvantages, and not offering inducements for the development of trade in new districts. Exporters want favourable terms; importers do the same; and another class protests against concessions either in favour of exports or imports. It is a remarkable fact that many of the proposals which were most in fashion a few years ago have now been abandoned, and that in Parliament and the Press we now hear chiefly of schemes totally different from those which were formerly supported. Equal mileage rates were once strongly advocated; and, probably owing to the great success of the Penny Post and to the experiences of the advantages of one uniform rate for all distances, there was a belief in some minds that, with certain modifications, the same principle might be applied to rates for goods. Ingenious schemes were devised for equalizing within certain zones or areas, rates irrespective of distance and other circumstances. There is a fashion in so-called Railway Reform. Such schemes are now little heard of; they have given place to proposals essentially different, which may in their turn make way for others.

In all the recent discussions of rates much was heard of those who were discontented, but very little of those who, being satisfied, were silent. Most errors in Political Economy, it has been said, come from not taking into account what is not seen. Especially true is this of the question of railway rates, not the least important problem of Political Economy. Of the trades and interests which are dissatisfied with existing arrangements, people hear and see much. Unfortunately they appear to take little heed of other interests, equally important, which are contented, or comparatively so, which do not send deputations to the Board of Trade, and which changes such as have been from time to time proposed would injure or even go far to ruin.

SECTION II.
THE PRINCIPLE UPON WHICH RATES SHOULD BE BASED.

The first condition of any useful discussion of railway rates is that all interests shall be considered—the interests of all traders, and of all consumers, as well as of railway companies. To every proposal this test—the golden rule—should be applied. How would any projected change affect all concerned? Every one cannot get such rates as he would desire; the utmost which is practicable is to fix them in the manner, on the whole, most suitable to the requirements of the community as a whole; and this will be found in the long run to coincide with the interests of the companies. In consequence of not applying this test, and owing to the fact that persons may freely put forward proposals without explaining what would be the consequences of a general application of their principle, little progress is made in the discussion. A second condition of any profitable consideration of the subject is obvious. To argue about the propriety of this or that rate, the question whether this town or that port is badly treated, or this or that industry is made to pay too much, is of little use without agreement as to the principle upon which rates ought to be framed. There is a third condition no less reasonable. When English railway companies are accused of imposing charges at haphazard, and in an arbitrary fashion, what scientific principle, it may be asked, ought to be followed? There is no escaping this question—not even if the task of framing or controlling rates were committed, as has sometimes been proposed, to the Board of Trade or the Railway Commissioners. To this question rarely, however, is any answer given. When one is attempted, very seldom is it made with reference to all interests meriting attention.[3] How often do witnesses before Royal Commissions or in Parliamentary inquiries merely deprecate in general language what they object to as personally injurious, or merely claim what would be advantageous for themselves! How often is their proposal of reform merely a thinly veiled plan for securing protection against competition for some industry or some town or port! How many proposals as to rates, propounded with facility and confidence in Chambers of Commerce, would prove to be valueless or even objectionable if their authors were always obliged to answer in detail two questions. What would be the effect of the proposals on consumers? How would they affect producers and traders generally?

SECTION III.
COST OF SERVICE.

One favourite proposal, often refuted but constantly renewed, is to base rates on the actual cost of conveyance plus a reasonable return on the capital invested. Whether this would benefit the trade of the country we shall by and by consider.

But it is no light presumption against this principle that, though so often proposed, especially by theorists, nowhere has it been carried out. Obviously cost of conveyance bears no relation to value of goods—the mere transit of some descriptions of very valuable goods costs as little as that of low priced articles. It will be generally found that when pressed, the advocates of this theory are not prepared to maintain that for a cwt. of coals and a cwt. of copper the charge should be the same. They shrink from the application of their own principle, recognising, as is the fact, that it is absolutely inconsistent with any classification of goods, such as traders and the Board of Trade have been urging the companies to adopt.

Inconsistent as such a principle is with any kind of classification of goods, and leading to the consequence that a rate might be the same for a bale of cotton as for high priced silks, its effect might be to revolutionize trade. But there is a preliminary difficulty; how is the cost of conveyance to be ascertained with anything like accuracy? How is the cost of conveying a particular consignment or even the average cost of every kind of traffic to be found? What the transit of full loads of coal in this country, or of grain in America, from point A to point B costs may be approximately found. Allowances may be made for the maintenance of the permanent way, for cost of engine power, and the wages of drivers, guards, &c.; and calculations, more or less accurate, can be made as to the cost of conveyance even over lines of varying gradients. The solution even of this simple form of problem would be difficult. When in cases before the Railway Commissioners it has been attempted to discover the actual cost of conveying a particular kind of traffic, the operation has been laborious. The companies interested have been compelled to incur great expense in procuring returns and information, and the result has in general been only approximately accurate. Very complex and difficult is the real problem. A large portion of the traffic of the country is carried in trains which pick up and set down wagons at intermediate stations. In the same truck may be goods of all classes and different quality or bulk for different destinations. One article of great bulk and light weight may be carried in a truck by itself or along with articles of great weight and small bulk.[4] There is a further difficulty in the fact that, while