Belmont chronicle. [volume] (St. Clairsville, Ohio) 1855-1973, 1855-06-14
ECONOMY IN RAIL ROAD EN-.
TERPRISES.

ANY one can see at glance that to make
rail road enterprise re munerative the strict
est economy is nece ssary in all its monetary
transactions. In times Of great financial EN-
barrassment the bonds of Counties and cor.
porations have been bartered away at 10, 90,
40, nd SO per cent discount. At this rate
it is impossible that rail roads should pay
fair dividend. If rail road, by carelessness
and extravaganza costs $780, 900 per mile, and
on this having investment pays dividend of
5 per cent, by economy in its construction,
and judicious disposition Of the paper, it
might have been built for $4,000 per mile,
when the dividend would be 10 per centun.
This is an plain proposition, and needs no
illustration.
The C. NJ. g. T. rail road is graded, and
bridged, has the cross ties on, and the comp
any have secured the right of way, TO Mas
sion, distance of SO miles from its place Of
beginning for less than $4,000 per mile. This
can be finished for $1,000 per mile, in addi-
tion, which will make $1,000 per mile. to
put the road in good running order.
The following article from Herpath's Jour-
nal is applicable to the question. We con-.
mend it to the pcrsual of persons interested
IN railroad enterprises.
Take care Of the Capital Account and the
Revenue ,oiH take care Of ItseH.-It is a re-
markable fact that those lines in England
which pay remunerative dividends are those
whose capital cost is light. From the same
cause and no other, are the French railways
excellent properties.
Nothing is more easy Of explanation than
this circumstance. The business Of railways
is always highly profitable, but it is seldom
the capital expenditure is otherwise than ex-
travagant. Thus it is that those railway
companies which realize the largest amount
of profit disburse the lowest rate of dividend.
| Let u line have the moderate extent OF
traffic repre- 'ented by Gao per mile per week,
or (abouD $4,000 per mile per annum. The
expenses being 80 per cent.-more than
which they are not generaly-here is profit
+ 900 per mile per annum applicable to the
payment of interest or dividend (or which is
usual, to both interes: and divdend) on what
ever capita; has been expended, If the
capital expended has been 10000 per mile,
the dividend will be 10 per cent, per annum.
Supposing no part o! the Glo,0Oo capital was
raised on loan, but it is generally the case
that at least one third of the whole capital
is borrowed $4,000 of the 10000 per mile
being borrowed at the fixed rate Of interest of
B per cent; there would be fl5o of the El,-
900 per mile per annum profit for interest on
loans, and ESQ applicable to the payment
of dividend on $1,000 per mile raised by or
dinary share capital. This would afford a
dividend at the rate of about IL per cent,
per annum. But if the capital expended be
E3o 900 mile, one third borrowed st per
cent, the same rate of revenue profit will
afford dividend of only q per cent. per an
nun in place Of IL.
1t is great misfortune in railway affairs
that the men who generally control and di.
rect the expenditure in the construction OF
railways are Professionally prejudiced in fav-
or of an extravagant course. Who selects
the line. and thereby determines the materi-
al part OF the capital sest' The engineer.
What interest has the engineer in lsslsctipg
that line whisk will encounter the east er-