ge for carrying fixes the place value. Whatever a railroad
demands for carrying goods from A to B measures the enhanced value
which they get in the moving; but if they would have possessed at B
the same value that they now have, even though the railroad had not
existed at all, it is evident that it is this value minus the value of
the goods at A which fixes the charges for carrying, rather than that
these charges fix the place value. We have seen in very simple and
general cases how this principle works, and have now very briefly to
trace the working of it in the case of a system of railroads. The
special method of reckoning costs to which we have referred is an
important element in the process.

_"Costing" comparatively Simple in the Bookkeeping of Competing
Producers._--In the study of ordinary industries we have encountered
conditions which render the bookkeeping of a producer simple and cause
him to charge all his costs, in a _pro rata_ fashion, to his entire
product. If his goods and those of his rivals are of one kind and are
sold in a single market, a cut in the price of any one portion of the
product involves a corresponding cut on the entire output. It is not
possible to single out any particular increment for a reduction of
price and leave the rate unchanged on the remainder. Where products
are of different kinds it is possible to make a classification of them
so as to get a large profit on some, a small one on others, and none
at all on still others. When competition has not done its full work,
something of this kind happens in many departments of business. A
condition of unequal gain from different portions of an output lingers
long after some effects of competition have been realized. In the end,
however, it must yield if competition itself does its complete work,
and whenever we adhere heroically to the hypothesis of the static
state, we preclude this inequality of charges. Rivals who contend with
each other for profitable business bring the prices of the goods which
afford the most gain to such a level that a mill which makes this type
of goods will pay no more in proportion to its capital than one which
makes other types. The total cost of production, fixed and variable
alike, would at that time, as we have seen, be barely covered, and
might correctly be apportioned in a _pro rata_ manner among all parts
of the product.

_The Effect of Increasing Business on Comparative
Charges._--Competition of this p