ysically possible to create the goods at both
points. If they can be made at point A for ten dollars, by using five
days' labor, and at point B for twenty dollars, by using ten days'
labor, ten dollars would furnish the extreme limit of a possible
charge for carrying them from A to B. In a certain number of cases the
actual charge approximates this extreme limit. With a mill in A,
working with much economy, and a number of household workshops in B
producing with less economy, the product of the large mill may invade
the territory supplied by the little workshops, and the carrier may
receive in return for transportation about as much as the difference
between the two costs of production. With a great mill at A and a
small one at B, the same thing may happen.

[Illustration:
C
|
| COMPETITIVE
| CARRYING BY
| HIGHWAY
v
A------------------------>B
]

_Narrower Limits usually Applicable._--In by far the larger number of
cases such a difference between costs is more than the carrier can
get. Usually there is some alternative mode of procuring goods at B
which does not involve actually making them on the spot at a serious
disadvantage. It may be possible to convey them to B from a third
locality, C, where they are made in an advantageous way. If this
carrying is done by some process in which competition rules,--if, for
instance, C is not far from B, so that goods can be carried thither by
drays,--the cost of making the goods in C plus the natural or
competitive cost of conveying them to B will together make up the
natural cost of procuring them in this latter locality. The difference
between that and the cost of making them in the great center which we
have called A will constitute the limit of the freight charge from
that city to B; and even though between these two points the carrier
has a monopoly of the traffic, he can get no more.[1]

[1] For a case in which a railroad can get the entire
difference between the cost of goods at the point from which
it carries them and their cost at the place of delivery, but
voluntarily refrains from doing so, see the note at the end
of this chapter.

_Other Applications of the Same Rule._--This rule applies even where
goods made in C have to be carried great distances, provided the
ca