Let A B and B C be two railroads connecting at B. Let the local rates A to B be 10 cents per 100 lbs. on grain, and B to C also 10 cents. Let the through rate A to C be 18, since longest hauls are usually cheapest per mile. Let A be a large grain market, such as Chicago. Now a merchant at C can save 2 cents per 100 lbs. by buying direct from A instead of buying from a merchant at B. For the grain will pay less for the single long haul than for the two short hauls. But perhaps the town of B has for many years enjoyed the trade of C, and there are large mills and warehouses erected there. B will then say it is "discriminated against," and will demand the privilege of "re-billing" or "milling in transit." That is to say, when a merchant or miller at B ships to C grain, or flour made of grain, which he received from A, the two roads consent to make a new way-bill and treat the shipment as a through shipment from A to C. The road B C charges but 8 cents, and the road A B gives B C one cent from the 10 it originally collected. This involves much trouble and a loss of revenue to the roads, and is, apparently, a discrimination against the home products of B, but roads frequently do it where there is competition at C by rival lines, and also at local points along their lines to build up mills, distilleries, and factories of all kinds in competition with those located elsewhere. As yet the Interstate Commerce Commission has not pronounced upon this practice. The question of differentials is as follows: Suppose there are three lines, B, D, and E, between the cities A and C (Diagram, page 176). B, being the shortest, will get most of the business when rates are the same (10 cents, for instance) by each line. But D and E insist upon participating, so they demand that B shall allow them to operate lower or "differential" rates--that is, B must maintain his rate at 10 while allowing D to charge only 8 and E 6 cents, on account of their disadvantages. So that a differential is practically a premium offered for business by an inferior line. The foregoing will illustrate how the rivalry of railroads with each other complicates the making of rates. But even more difficult to manage is the rivalry of markets, and of products, and of new methods which threaten property invested in old methods; as, for instance, the dressed-beef traffic from the West threatens the investments in slaughter-houses and stock-yards in the East.