th the carrying which it involves, if neither railroads nor
steamboats had come into being. The growth of factory villages had
made some headway at a time when no elaborate machinery existed; but
if that condition had continued, manufacturing centers would have
been smaller, more numerous, and more scattered than they have been.
It is the cheapness of carrying by railroads and steamships which has
made it possible to get the fullest benefit from the so-called law of
increasing returns in manufacturing.

_Mining as related to Transportation._--Mining is a process which has
to be local, because ores and coal are furnished by nature in a local
way; and one might mention this as a second cause of extensive
transportation. A great part of the carrying so occasioned depends,
indeed, on the growth of the manufacturing centers, since mills and
furnaces need great quantities of fuel. A means of heating private
dwellings, of cooking food, etc., might conceivably be supplied in a
local way, by the growth of forests; but the fuel needed for the
centers of manufacturing and commerce has to come from distant points.
The law of increasing returns in manufacturing, then, and natural
location of mines are the most generic causes of transportation. The
system which has resulted gives to everybody more and better food, as
well as more and better goods of every kind, than he could possibly
have had if the primitive system of local manufacturing had continued.
The cheapness with which form utility is created in the mill and place
utility on the railroad are the two causes which are at work.

_The Rivalry between Producers of Form Utility and Producers of Form
and Place Utilities._--In the technical language of economics, there
has been a contest in efficiency between that creating of form utility
which is done when goods are made in households or in small villages,
and that joint process of creating form and place utility which
consists in making goods at central points and carrying them to the
widely scattered homes of consumers. The latter process, involving as
it does the necessity of creating two utilities instead of one, is now
by far the cheaper.

_The Ultimate Limit of Charges for Transportation._--Charges for
transportation have as one extreme limit the difference between the
cost of making goods at one point and the cost of making them at
another. This rule is applicable, of course, only to those numerous
cases in which it is ph