reated to a
certain equality per unit of cost and to reward the labor and capital
which are used in carrying as well as they are rewarded elsewhere, and
not better. If our table of industrial groups were elaborated, there
would be between A and A', as well as between A' and A'', and between
adjacent subgroups throughout the chart, a symbol which should
represent the work done by the carrier; and the fact would appear
that naturally this work is neither favored nor injured in the
apportionment of rewards. Free competition, if it existed in
perfection everywhere, would be a perfectly undiscriminating
distributor of earnings, and would apportion all returns according
to costs.

A'''
A''
A'
A

_Variations of Freight Charges from Static Standards._--Place values
are not an exception to the general rule of value; and yet freight
charges actually remain at a greater distance from the standards
furnished by the direct costs of carrying than do the returns for
other services from corresponding standards. There is an approach to
monopoly in this department, and, when direct competition exists, it
is a more imperfect process here than it is elsewhere. Moreover, the
costs which here figure as an element in the adjustment of freight
charges are of a peculiar kind, which, although not unknown in other
departments of production, have nowhere else so great influence and
importance. The study of railroads and their charges is baffling, not
because the economic forces do not here work at all, but because here
they encounter a resistance which is exceptionally strong and
persistent. The quasi-monopoly which elsewhere continues only briefly
lasts long in this department of production; but it is subject to the
same principles which everywhere rule.

_The Modes of Approaching the Study of Freight Charges._--In studying
freight charges we may, if we choose, start with the intricate tariffs
of railroads, as they now stand, and try to find some principle which,
if applied, would bring order out of the mass of capricious and
inconsistent rates. Such a rule will ultimately be needed, but it can
best be obtained by examining at the outset the transportation which
is done by simple means and under active competition. It will be found
(1) that basic principles apply to all transportation whether it be by
railroad or by simpler means; (2) that in the early development of
every system of common carrying the action of these principles is