of railroads into the fullest
possible use, is attainable, but it is very remote. At times there is
a congestion of freight and, in general, the capacity of existing
plants is more nearly used than it heretofore has been; but by an
addition to the rolling stock they could carry more than they do and
the additional traffic would cost far less than the portion already
carried. Moreover, with no addition to the rolling stock, very
considerable enlargements of traffic could at many points be made.
Thirdly, competition between railroads is not at present effective
enough to bring about a reduction of the higher charges and make
returns and costs simple. Combination takes place long before the
discriminating charges are abandoned. Low-grade freight continues to
be carried side by side with the high-grade which pays better. Charges
to terminal points continue to be low, while charges to intermediate
points are high. In a sense one may say that a tendency to discontinue
these practices exists, but it is a tendency that is so effectually
resisted that its natural results are only in small part realized. If
a dam is built across a reservoir, holding the waters on one side ten
feet above those on the other, one may say that the waters have a
tendency to reach a uniform level, since the power of gravity is
exercised in that direction; but the dam baffles the tendency. And so
in railroad operations something interferes which checks the force of
competition or removes it altogether, long before the discriminations
in freight charges are removed or very much reduced.

_An Intermediate State made relatively Permanent._--As we have said,
the condition of traffic on railroads is analogous to what in the case
of manufacturers and primitive carriers would be regarded as a
transitional state soon to be left behind; but in the case of
railroads it is relatively permanent. It is the condition in which
certain natural economic forces are working vigorously, and, if they
were not counteracted by other forces, would end by making natural
adjustments and establishing normal rates for the carrier as well as
the manufacturer. In this intermediate state the natural forces are
counteracted and the adjustments are never made, and what we have to
study is the degree in which they are approximated.

[Illustration:
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