_Appendix_: The subjoined chart, reproduced by the _Railway Age Gazette_ from a bulletin of the Bureau of Railway Economics, brings out forcibly the manner in which, within the short time limits of full utilization of plant, a large increase of business can take place without a commensurate growth of expenses. The phenomenon for railroads is of course cyclical. Annually, as here indicated for 1911, the second half of the year is marked by a much heavier movement of traffic, principally, of course, the crops. But expenses never rise in proportion. This is most evident for the eastern group of roads, as here shown. This causes the net revenue curve, also, to vary much more than in proportion to the volume of traffic, in consequence. [Illustration: Monthly Revenues and Expenses per Mile of Line from 1911 and 1912.] FOOTNOTES: [50] Illustrated by the seasonal variation of business. _Vide_ appendix to this chapter at p. 100. [51] Webb, Economics of Railway Construction; originally in Wellington's Economic Theory of the Location of Railways. [52] Webb, _op. cit._; originally from Wellington. [53] _Wall Street Journal_, March 25, 1908. [54] Eaton, Railroad Operations, etc., pp. 44-58. [55] Investigation in 12th Ann. I.C.C. Rep., 561. [56] From Report of Commission to Investigate the Postal Service, 1901, p. 220; brought down to 1906 when local disturbances in wages, other costs of operation and rates outweigh all general considerations. [57] Between 1890 and 1910 freight ton mileage rose three times over. Operating expenses grew by about two and one-quarter times. [58] _Cf._ data as to revenue per ton mile on p. 413, _infra_. [59] Other data as to density on p. 413, _infra_. [60] Also known as "average tons per train mile." Obtained by dividing the ton mileage by the sum of the freight and mixed train miles. [61] _Cf. Quarterly Journal of Economics_, XVIII, p. 299; on _per diem_ reform. Also, _Railway Age_, 1903, p. 136; 15th Ann. Rep., I. C. C., p. 79; and Circular Letters, 1901, Chicago Bureau of Car Performances. [62] Using the right hand scale. [63] Diagram on p. 413, _infra_. CHAPTER IV RATE MAKING IN PRACTICE