cumstance. It is to be observed that these provisions are applicable only in the case of necessary measures for the service of each station, as defined by the acts that have determined the location of that station. No extension can be brought in the performance of that service except by agreement with that company. Frequently the latter puts upon its assets the condition that interested parties will cooperate pecuniarily. In order to help the communities called upon to extend such a cooperation, the law of October 26, 1897, authorizes the imposition, in a station, of local and provisional surtaxes collected in addition to the regular tariff and intended to secure the payment of loans contracted by the municipalities or the chambers of commerce for the purpose of contributing to the improvement of that station. These surtaxes are authorized by law, if the loan itself must be authorized by law, and by a decree issued by the council of state in ordinary cases.

Title IV and articles 61 and 62 of the specifications of the contracts of lines of general interest, Title V of the ordinance of 1886, articles 5 and 33 of the law of June 11, 1880, and articles 47 and 48 of the decree of August 6, 1881, contain the provisions of law which govern commercial operation. We shall first briefly indicate the various elements on which rest the establishment of rates; next, the legal conditions under which tariffs are framed and enforced; and, lastly, give a summary of the tariffs in force on our railroads and of the rules applicable to transportation shared with other enterprises.

II. Tolls, transportation, and terminal charges.-The rates collected by railroads consist of various elements, distinct in theory, but mostly merged in practice.

The specifications of the contract establish the first distinction between the tolls due for the use of the tracks and destined to meet the interest on the capital applied to construction as well as the cost of maintenance of the track, and the freight, properly so called, which is to pay for the rolling stock and its maintenance, the cost of hauling, and operation. Of the total amount of maximum rates authorized about two-thirds come under the head of tolls in the case of passengers, and three-fifths in the case of merchandise. Under the specifications of the contract any reduction of the total price is divided pro rata between the tolls and the freight. Great importance was originally attached to this distinction which was made to provide for the contingency of competitive transportation by various companies on the same track. In such a case the company that had built the track would be entitled only to the tolls for all merchandise that it did not carry itself. As a matter of fact, the demands of safety hardly permit of several carrying enterprises existing on the same track, and it only happens on certain common trunk lines from which other lines owned by different companies branch off. The use of such sections, which are generally rather short, requires that the organization of the service be thoroughly regulated and agreements reached determining the respective shares of expenses.

The divison of receipts is often adjusted at the same time among the companies concerned on bases different from those laid down in the specifications of the contracts. These bases, however, remain in force in the absence of any agreement to the contrary, as we shall see hereafter. It is further to be observed that from the economical

standpoint, the cost of transportation, properly so called, is paid by that part of the total cost which defrays, with a reasonable profit added, the expenses of all description incurred by the carrier for that operation, including the remuneration of the capital applied to the purchase of the working stock; the surplus alone really constitutes the tolls destined to meet the cost, largely independent from the traffic, of keeping the works in repair and to pay the interests on and redeem the capital applied to their construction on the other hand. Now, the considerable difference which exists between the rates provided for in the specifications of the contract for the various classes of merchandise, as well as the reductions made by the tariffs in force in the greatest number of the legal rates, are caused only in a slight measure by the differences in the cost of transportation due to the nature or conditions of such transportation. In most cases the important differences which are found in the rates collected in various cases are made necessary by the commercial exigencies which require, in order to develop traffic, that tariffs applicable to certain classes of merchandise be reduced when they exceed the figure that most of the shipments coming within such classes are able to pay. It is therefore not correct to say that the total rate is always equally distributed in the two elements constituting it; this equality of distribution is but a legal fiction. As a matter of fact, the rate of transportation proper only varies in the comparatively small proportion of the difference in the actual cost of transportation in various places; so that the variation is much smaller than that in the tariffs. On the contrary, the tolls, which are almost nil in the lowest tariffs, which are hardly equal to the actual cost of transportation, are quite considerable in the higher tariffs, which are enormously in excess of such cost.

A third element of the tariffs is constituted by the cost of accessory operations which is added to transportation proper at both ends. Å portion of the cost comes from operations which are a necessary accompaniment of the transportation in all cases, such as the loading of the merchandise on the cars and its unloading. Again, other expenses originate in services rendered by the common carrier in certain cases only, such as prolonged storage after transportation. These expenses are frequently called terminal charges. They include, besides compensation for the work performed in each case by the company, a portion of tolls to pay the interest on the capital of construction and the cost of maintenance of the various buildings required for the service thus compensated; but, as a general rule, no distinction is made in the corresponding tariffs between these two elements.

The amounts collected for such operation in France come under the head of what is called "accessory charges."

III. Rate tables and fixed rates.-In order to determine the cost of each trip or of each shipment, taking into account the various elements above indicated, two very different courses may be followed, the kilometric rate tables and the fixed rates.

In most cases the rates applicable from any station to another station on the line for merchandise of a certain class are reckoned according to a general formula which makes it possible to prepare a table showing the rate to be paid for any distance. The formula

generally consists of a constant term corresponding to the cost unaffected by the length of the trip and of a term, which varies according to the distance. The name of kilometric base has been given to the rates paid per unit transported and per kilometer traveled, after deduction of the charges.

The most convenient method of examining the various tariffs is to represent them graphically. To this end lines are drawn horizontally in proportion to the distances and vertically; at the end of these horizontal lines are drawn other lines corresponding to the price represented by the distance traveled by each one. The tables are then represented by lines varying in form like those appearing on the annexed diagram.

In rate tables used originally by railroads, the term that varied according to the distance traveled was always proportional to the said distance, so that the kilometric base was constant. Tariffs of this kind are represented by straight lines more or less inclined according as the basis is more or less high, and diverging from the vertical line which passes at 0 at a height which represents the amount of the charge independent of the distance traveled, and collected under the head of "terminal charges.'

At present the tariffs in force are mostly on a decreasing basis; that is to say, tariffs in which the total cost increases less rapidly than the distance because the price paid per kilometer decreases as the distance increases.

These rate tables are styled "Tables of the Belgian system" when they are made as follows: The kilometric price is n centimes per ton for each one of the m kilometers traveled; then it becomes gradually less, first amounting to n' centimes (n' being less than n) for each kilometer traveled beyond m kilometers as far as n'; then n" centimes (still lower than the preceding one) for each kilometer from n' to n', and so on. The first figure, that of n centimes, is what is called the initial basis. These tariffs are represented by broken lines, which are more or less inclined according as the traffic under consideration carries a more or less rapid decrease of the kilometric basis. An example thereof is found in the general tariff for fast freight.

A tariff table is said to contain a "landing" when the same rate is applicable to all the distances comprised between certain limits. This is what occurs, for instance, when transportation to less than 100 kilometers costs the same as 100 kilometers, or when the cost no longer increases after it has reached a certain figure representing a distance, which, however, is not the longest possible distance on the system, and remains the same for all longer distances; or, again, when going from one formula, including high kilometric prices for short distances, to another formula including lower kilometric prices for long distances, a uniform price is applied to all the distances comprised between that at which this price is given by the first formula and that at which it is given by the second. Such is the case of the legal tariff for the fourth class of merchandise by slow freight on the great systems.

The diversity of forms in the rate tables makes it possible, as is seen, for the rates to vary in a rather wide measure according to the demand of each class of traffic.

Between two stations that are connected by various tracks the rates by table are usually reckoned for freight by measuring the distance over the shortest route; if the company, which usually sends the merchandise over the route most convenient to itself, finds it profitable to carry it over the longer distance, the public should not suffer thereby. Travelers who select their route themselves usually pay according to the distance that they actually travel.

In consideration of the peculiar conditions of a certain track, the rate of transportation on that line is sometimes determined by applying the various rate tables not to its actual length, but to a fictitious length called "distance of application"; for instance, when certain lines have offered extraordinary difficulties for their construction, Inaintenance, and operation, especially in mountainous regions, the distance actually traveled over those tracks is increased. Oftener the distances of application are less than the actual distance; for instance, if two centers are not connected by a direct track, the increase in the distance is compensated by reducing the length of an unusually long detour.

Certain peculiar commercial conditions may be taken into consideration by establishing for a certain staple a special rate table applicable only to merchandise coming from or going to a few particular stations and at rates lower than those in force between other stations on the same system. This is done, for instance, when it is deemed that there is justification for especially reduced rates in the case either of merchandise shipped from an important producing center to all the stations of the system, or, on the contrary, of all merchandise shipped from all stations to certain leading consuming

centers.

But the most usual method of subserving the peculiar commercial conditions that may exist at certain points on the traffic is to establish fixed rates. A fixed rate is a rate lower than that which would result from the general rate table and determined for a certain staple between two stations, especially named to that effect in the tariff; for instance, wines in casks shipped at retail from Bordeaux to Paris, 37 francs, while the rate tables in force on the system would give the price as 42 francs, 40 centimes, for a distance of 577 kilometers. The fixed rates were formerly applied to most arteries of important traffic. After the conventions of 1883 were signed, a general revision of the tariffs took place, by which a number of rate tables were lowered, and thereby all the former fixed rates that became higher than the cost indicated by the new tables for the same distance were done away with. There remained, however, still a large number of such fixed rates in our slow-freight tariffs. As to fast freight, the considerable reductions in the rate tables agreed to in 1892, when the Government tax was reduced, have caused a discontinuance of nearly all of them. In France it is a rule that knows of few exceptions that stations between two other stations whose traffic is governed by fixed rates can avail themselves of that rate, if they find it to their advantage. In consequence, the general rate table is only applied to distances comprised between the two stations named therein only when the distance is short enough to keep the rate below that of the fixed rate in spite of the great reduction granted by the latter. The same rule applies when a special rate table fixes the reduced price for a distance within which that which it is intended to travel is comprised.

S. Doc. 243, 59-1-vol 5-18