ombination may be broken by a desire to foster
business in a section of country and by the indirect influence of
lines outside of the territory controlled by the consolidated roads.

15. In its stronger and more extended forms consolidation leaves the
people with no adequate safeguard against extortionate charges except
as this is furnished by the intervention of the state; and this needs
to be effected with an intelligent regard for the natural forces which
are at work amid the seemingly capricious irregularities in the
present system of charges.

_The Aim of Regulation by the State._--An aim of a government, in all
of its economic policy, is to insure the best use of the national
resources, and this can often be done by keeping alive free
competition. Where the rivalry of producers is active, a law of
survival guarantees that the more economical method of producing an
article shall displace the inferior one. When the choice lies between
using a quantity of free and disposable labor in making goods in a
certain market and using it in making them elsewhere and carrying
them to the market, the alternative which gives society the most that
it can get by any use of its productive resources is the one that is
spontaneously selected.

_How an Extortionate Local Charge may sometimes be reduced without
Injury to a Railroad._--A low charge for freight carried from A to B
coupled with an extortionate one from A' to B might preclude making
the goods at A', though they can be made there at excellent advantage
and the interests of society will soon require that they be so. This
situation can exist only so long as traffic is slight between A and A'
and greater between A' and B. The growth of traffic over the former
section of the route will make it desirable for the railroad to raise
its rate over that portion. If, under compulsion or otherwise, it
reduces the rate from A' to B sufficiently to permit the production of
the goods at A', it will gain a profitable traffic between A' and B at
the cost of giving up a relatively unprofitable one between A and B.

[Illustration:
A---------------------------B
A'
]

_Variable Costs a Proper Basis for Some Charges._--It makes for
general economy to pay respect to the distinction between fixed and
variable costs and let much freight be carried for anything it will
yield above the variable ones. If ten units of labor are required for
making an article at B and only five