DEMAND How Transportation Equalizes Supply and Demand.—We saw in the last chapter that all business is an attempt to satisfy the needs of one set of people with the surplus produced by others. In order thus to equalize supply and demand transportation is essential, for only in the regions of very low civilization are the demands of a people satisfied by local products. In 1921 there was a tremendous demand for food in famine-stricken Russia and a fair supply in the United States, Argentina and Australia. But the demand could not be met, even if the Russians had had a surplus of other kinds wherewith to pay for food, for their transportation system was not working effectively.
Transportation systems are often thought of as mainly a means of carrying people, and as designed to carry people for pleasure or for purely personal reasons quite as much as for business. But the greatest of all transportation systems are designed for freight even more than for passengers. They could scarcely be made to pay if passengers were their sole reliance. Roads like the New York, New Haven, and Hartford, or the Long Island Railway which derive half or more of their revenue from passengers have had unusual financial difficulties. In the United States as a whole, three-fourths of the railway receipts are from freight. The net revenue from passenger service including fares, mails, and express, is from one to three dollars per mile of train service, while for freight trains the revenue is $1.50 to $4.00 per freight train mile. The Pennsylvania Railroad derives 70 per cent of its profits from freight, owns 166,883 freight cars against 4921 passenger cars; and its freight traffic in 1920 amounted to 1,373,000,000 car miles against 259,494,000 car miles for its passerger traffic. Over each mile of track on an average it carried 544,000 passengers and 5,512,000 tons of freight. Again, of the ocean 'steamers owned in the United States, the large majority are primarily freight ships. Even when a great ship like the Aquitania is primarily a passenger vessel, its load of freight furnishes a large share of the net profits. Moreover, if the commuters are included, probably 95 per cent of all the passenger traffic on railways, trolley cars and boats is for the purposes of business.
All this is an attempt to make the supply equal the demand, for the passengers are going to the places where their services are needed, 4:3. away from places where they are no longer needed. Only a few rail ways like the Pikes Peak road, were built largely for passenger traffic and belong to the types of business deaLng with recreation. A still smaller number, such as the French railways in Indo-China and especially the railways parallel to the frontier in Germany, were planned primarily for political and military purposes. Thus the main purpose of the world's transportation systems is to equalize supply and demand, I by carrying freight and passengers.
How a Failure of Transportation Hits facilities are so much a matter of course that few people realize their full importance. Suppose all transportation should cease, and people did not even carry things by hand. Every kind of business would stop at once; city dwellers would starve, for practically all their food is transported from field, farm, forest, and factory. The tying up of transportation for even a single day creates almost inestimable loss. For example, a great blizzard in Chicago in 1918 practically put an end to all business for several days. Even in that short time people became greatly worried because there was so little milk for the babies, and other supplies began to run short. The hindrance to transportation for a few days in that one city and the consequent interruption of busi ness cost millions of dollars.
How Human Activity Determines the Main Routes of Transpor location of every line of transportation, whether it be • a mere trail or a great steamship route,—depends primarily upon one geographical condition,—centers of human activity. Secondarily it depends on five other conditions: (1) distance, (2) relief, (3) cost of construction, equipment, and maintenance, (4) necessity of trans shipment, and (5) natural resources. Sometimes one condition is more important and sometimes another, but none can be neglected.