Fair Value Economic And Legal Principles By Heiskell Bryan Whaling

Heiskell Bryan Whaling

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This is the problem of classification.
[406] WHALING— FAIR VALUE: ECONOMIC AND LEGAL PRINCIPLES 35 that, therefore, subsidization is necessary. This begs the ques- tion. Where expenses of production are high, rates are made low ; where expenses of production are low, rates are made high. Thus are the natural advantages of location destroyed and thus are business ability and physical effort forced into less pro- ductive pursuits. In short, the value of service principle is directly in contravent...ion of the law of comparative cost. Since it restricts geographical division of labor, it means unequal op- portunity to produce, and does not conserve social welfare.
But the matter may not be thus summarily dismissed. So far, we have considered the effect of the two theories on busi- nesses which use the railway services. This point we now take up without regard to their effect on the utilization of the railway plant.
The Utilization of the Eailway Before we can satisfactorily discuss the effect of rate theories on the utilization of the railway plant, it is necessary to point out the nature of railway expenses.

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