Indiana American. [volume] (Brookville, Ind.) 1833-1861, 1854-04-07
NEW ALBANY AND sASDusxEy RAIL
ROAD.

w VIZ a ttt" 't+"N VIZ tttttt'tt"N tttfRt<t+"I
Of freight and travel from North TO South
must from interest seek this transit, and
that the "way business" itself. from the
character Of soil and improvements Of /
the country through which 1t passes
will sustain the road.
What will it pay? correctly ans
wcr this enquiry, we must draw facts
and conclusions from other and similar
roads now completed and in working
order-their cost and the income they
yield, viii furnish proper data for our
purpose.
The average cost per mile of eight
western roads to-wit: Mad River and
Lake Erie, Loui sville and Frankfort,
Mansfield and Sandusky, Ohio and
Pennsylvania, Toledo, Norwalk and
Cleveland, Terre Haute and Richmond,
Hillsborough and Michigan, & South
ern with total length Of 1860 miles is
S2o,S 30 per mile finished and equipped
with "rolling machine ry" complete.
We have taken these eight roads
Unfortunately from the States of
Pennsylvania, Ohio, Michigan, Ken
lucky and Indiana, and feel that when
we put the cost of this road at 80, $780,
900, about s24, 900 per mile, we are
makinga very liberal and large esti-
mate.
The net annual earnings of ten of
themost importantwestern roads taking
the receipts of October 1853, as the
of calculation was 1872 per cent on
thegross capital invested, and all of
these roads, yet in their infancy and,
but just begun to develope their great
resources.
We will take for example the Mad
River and Lake Erie road, 81 miles of
which, from Huntsville to Sandusky
forms part Of our road. The gross
receipts Of this road from Sandusky to
Dayton 1877 miles distance, for the
month Of October 1853 were $75,048,
which is about S53, 92 for each mile
per annum. Assuming that our road
which will be about lO5 miles to the
State line, will yield no more than
$53, 90 per mile, and allowing so per
cent, to cover all expenses, which is a
very liberal and full estimate, we have
the net receipts equal to 1886. pei
mile and 1898, $50 as the net earnings
Of the road per annum.
To build this road we propose to take
but one million dollars in subscription
to the capital stock. and borrow one
million, FIVE hundred thousand, at 81,
per cent, payable in twenty years.
The net proceeds of the road will b
as shown above, 983,080, and equal Il
about l pen cent per annum on thu
whole cost. The interest on the LOAF
Of one and half millions is NINETY
thousand, and when paid leaves ont
hundred and ninety-three thousand ant
eighty dollars to be distributed anon;
the stockholders. The entire stock j
but one million dollars, as proposed
which will make the annual dividend
about 10 per cent on the capitol inves
ted. Thus at glance will be seen tn
advantage of building restera road
:, on large amount of borrowed capi
tai, as the dividend on stock, if bull
exclusively on subscription, would b
but II per cent, and if built as propos
ed, l9 per cent.
1t is sometimes urged, as an objec
ton, that the borrowed money wi
. have to be repaid, and thereby proven
dividends to stockholders, and conse
quently lessen the value of the stool
To obviate this objection we propose I
create sinking fund from the NJ
earnings or dividends Of the stockhold
ers of per cent. amounting to $1,000
per annum, which with the accruin
interest thereon, will in the 90 year
accumulate fund equal to the Who'll
sum borrowed. Thus can the entir
) debt be paid off at maturity and tn
: Stockholders continue TO draw annual
ly l2 per cent on the funds invested
{ These calculations are based on til
y premises that our road does no MOI
e business when completed than til
y Erie a. Mad River road did in tn
!. month of October 1853.
{ What will be its net earnings whe
t an complete operation, connecting tn
d the important points of Saudusky Ba
i, and the Falls Of the Ohio? With a
a the advantages it possesses for tran.
q portation and travel, from the Souther
e roads terminating at Louisville an
= that of the Ohio river arrested by Il
j obstruction Of the Falls we predi,
its net earnings will be double that I
S the Mad River and Lake Erie" roa,
n the second year of its operation. an
+ request Of our friends to lay away OF
!, figures and estimates as n reference.
n We think that the road will pay wei