CHAPTER VI 
THE PRACTICAL ASPECTS OF RATE MAKING (Continued) 
Having considered the more important factors involved in the 
classification of commodities, it is essential to turn our attention to 
those business ‘conditions which are the practical forces at work 
underlying the actual determination of rates. The railway company 
is a business institution, operating as one of the central and most 
vital elements in the business world. As such, its rates must be made 
with reference to the welfare of those enterprises which furnish its 
traffic and as the conditions in the business world change the rates 
charged for the conveyance of traffic must also change. It must not 
be thought that the fixing of rates is a matter which can be done 
entirely independently of the classification. "Even in arranging the 
classification the railway company must keep constantly in mind 
considerations as to the revenue which it must obtain from the traffic 
and a change in the classification of an article almost always means 
a change in the rate charged for its carriage. [tis inevitable, there- 
fore, that the bases of the classification should be among the factors 
which must be taken into account in adjusting a schedule of rates 
for the articles in the classification; but they are not the only factors 
which must be considered in the establishment of such a freight 
tariff. The fact that the railway company’s services are used by all 
classes in the community shows how intimately the company’s welfare 
is bound up with the changes in either particular or general business. 
Moreover, the railway, like the wholesale house, because it handles 
such a large amount of business, is among the first to feel any effects 
of changes in the demand for and the supply of products. This, 
taken into consideration with the fact already discussed that the rail- 
way is a business of increasing returns and that it responds almost 
immediately in its financial results to slight changes in the volume of 
traffic conveyed, shows conclusively the extremely intimate relation 
which the railway bears to business prosperity or adversity and how 
carefully its trafhc department must adjust rates to the incessant 
changes of commercial conditions. 
The filing of new tariffs or of supplements to existing tariffs, which 
goes on continually, shows how consistently the railway tariff bureau 
158