New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1881-01-11
of the times as recorded from day to day in the
PAILROID DEYELOPMENTS.

1879 only i721 miles were built, and IN
1873 only 2,GS7 miles. The significance OF
these facts is not generally appreciated. The
Capitalization OF all roads in operation now
averages more tlan $4,000 per mile. The
new road luilt, in very large proportion Of
cases. is distinctly intended to compete with
older roads, and to SCENE profits by drawing
tiafhc from them. Probably the average cost
of the construction and equipment of the new
roads is more than $4,000 per mile, so that
the roads built represent an irlcyOcable cXpen-
diufp, sinking, or permanent plant" OF more
than $l1J,OOO,O00 in 1850 and more dian
$4,000 900 in 1879. 1t is not Il small matter
that such an amount OF capital has been per-
nancBtly withdrawn from the support OF trade
and other industry If il were certain that the
nves mcut would Prove in all &c pccts profit
able to those who make it, the question would
still remain whether the country could at pres
cnt ailold 10 turn floating INTO fixed capital ut
the rate OF $l4j, 100000 in a single year.
Tie problem actually presented has another
and still more serious aspect The large sum
invested has recn put inrO new railroads, IN
many cases with the intention, and in many
others with the necessary result, OF diminishing
thr traffic ANA earnings Of roads previously
/
may prove decidedly profitable to the individ-
uals VINO make it, and yet it may involve the
sinking and absolute loss of larger amount OF
capital than The new roads have cost FOR III
stance. q new road costing $4,000 per mile is
built as a rival Of an old road represented by
stocke and bonds now selling ut 100000 per
nil, OF road BY diyeT,ing small part OF the
traffic now existing, the new ROAD may soon
become profitable. But the net earnings winch
suffice 20 pay interest and dividends on a cost
Of only $50, 900 per mile may be absolutely
needed 10 enable the older road 70 pay interest
and dividends on 100000 per mile; so that,
! if the Lew read succeeds, it may leave me CID
road without means whcfcWih To- Jay Interest
on its Debt. Virtually, half OF lis capital or
more, may he fhus destroyed. Ii thr dcPecla-
! ton Is only tcmr 0rarJ, nevertheless capital
amounting e. 80 900 per mile may be rendered
completely useless and va,ucipSS fox years 10
or i,r that "A capital of $4,000 per m.lt may
! gain profits IN "A new undertaking. il stance
! If tbs Lud arc far more cOalmon th'n many
suppose. nd vidulls may gain mich, hut the
! country may gain ycty l;uc il the IN .cstmc!t
| OF ~ iI,OJO,0O0 in new railroads last year
turn, out speedily and highly profitable To those
! who have made il, but IuinoGS, at least for
| wears. 10 tho,, who had $3.50, 0OOOOO or more
/ invested in older roads.
! True, many nrw railroads have hCeu pushed
INTO fields piryiou Iy unoccupicd. They injuic
no Older roads, but often prove helpful t.
others a> feeders. In thi, case, the capital i'll
vested in roads penetrating comparatively nm
settled country il rarely expected to return
profit, for years to come. II is sunk, for the
present; rs completely Withdrawn from the
need, anI use, OF industry at ths time a. il it
had been thrown over NIAGARA. But in this
case oticr capital is alsc expended. People
aic induced 20 leave h0mcs IN Older Stat"s and
"a migrate To new regions and fresh fields
Soonrl or later, their change of location may
result in increased production, but the lmmc-
di1tc eject is Il clear loss Of the cost o: re-
moyal. the cost OF breaking and fencing new
land, the cost of pu;tne MP new dwellings and
bans, and establishing villages and stores and
shops in the new country, and the increased
cost Of Transporting products from greater dis
tancc to consumers. This Indirect sinking Of
capital is not q small matter, when railroads are
built m the rare of 1900 miles in a year, and
the effect upon the supply of capital Tor other
industry il ior time just the same rs il all the
cost of removal had been sunk in the sea.
About half of the road built in 1850, or
1861 miles, was west Of the Missouri River
and the States Of Arkansas and Louisiana,
and 300 miles of road were west of Nebraska,
Kansas and Texas. More than half OF he
new construction. therefore, involves a costly
competition with roads previously built, while
the remainder somewhat less than half, in
wolves a costly dispersal OF population over
new and distant territory
~, lon t,ic -f drpi from
its rcsourccsl 1t il not an Cd country,
crowded with the accumulated capital created
hy centuries of industry and thrift. 1t is not,
on the whole very economical country. Its
population is too scattered to utilize its savings
to the best advantage, ana too ionI OF loving
to accumulate rapidly. 1t has vast resources
undcvcIopcd and there il u perpetual camor
fer every dollar that can he secured for the |
opening Of new mines and the building OF new |
mills and factories. Moreover Ia this impatient |
development Of resources by sangulne and
confident people. many millions are wasted |
every year by mistakes. From resources so |
fully aud constantly employed can the country |
afford to take $l4j 100000 in a year, to be |
expended in part in destroying larger capital |
previously invested, and in part III dispensing |
industry over a wider area and preparing for !
lArger production years hence
just now we can borrow. When American |
securities are sent abroad, the country virtually |
mortgages It's future to build new railroads. |
But that resource may fail at any time. II is !
likely to fail when prices Of securities have |
been pushed upward fast enough and Tar |
enough 10 tempt tho most sanguinc investors To !
realize their profits. When we have To pay back |
money borrowed, and at the same lime to spend |
money in building pew roads for which con-