Los Angeles herald., 1891-08-21

Speaking OF railroad troubles, says the
Salt Lake Tribune, all over the country,
the difficulty of meeting running ex-
penses and fixed charges, the triumph
that is won when a bankrupt road
succeeds in getting new lease OF life
by borrowing money, thoughtful people
cannot help but reflect what the effect
would be if one railroad could be honestly
built, if its stockholders could only
represent the actual cost of building and
equipment, and how light tariff would
be necessary for fares and freights to
pay all the expenses of operating and
repairs and a fair interest on the invest
ment.
A railroad might be built and fully
equipped from this city to Los Angeles.
or from this city to San Francisco or to
both places, at an expense not to exceed
SIS 900 per mile. Built to both places,
it weuld require about 1900 to 1900 miles
OF railroad. Calling the latter the
proper figures, it would represent $780,
100000. To pay ~ per cent ON the in
vestment, and estimating the running
expenses and repairs at TX per cent
more, the road would have to pay
$3,000,000 per annum, or about $4,000
per mile.
The Union Pacific, last year, between
here and Tintic, had revenue OF $40, 1000
per mile. There were several years that
the Central Pacific and Union Pacific
paid over $4,000 per mile, and yet both
those roads are today hopelessly bank
rupt. That is, when we say hopelessly
bankrupt, we mean that if they were
forced to settlement neither road
would bring half the amount of its in
debtedness.
OF course tremendous fortunes have
been made off both roads, but we be-
lieve those fortunes and the way they
were made were mistakes.
We believe if both roads had, at the
time of their completion, represented
only what they actually cost, and that
if the policy of the management had
been to keep those roads in thorough
repair, then to have put away little
sinking fund to meet the original cost,
then to have divided the rest into
dividends, or to have used the rest to
build branch lines, the owners would
have in the long run realized more than
through the course that they adopted.
And those owners, too, might have con-
trolled every outlet to the Pacific abso-
lutely; and had they fixed their freights
and fares on the basis of simply keeping
their roads up, paying their interest and
making reasonable dividends, they
would have monopoly of the carrying
trade OF the west for ali time to come.
If syndicate would put together
twenty millions of dollars and build
road from here out west, some $50 miles,
then run one end of the Y to San Fran
cisco bay, and the other end to Los
Angeles, the freight on ore alone on
this side of the line would pay Is per
cent. per annum on the whole cost.
There may be some other such an oppor-
tunity left for capital in the world, but
we do not know where it is. In addi-
ton to this ore that would be brought
in, the road would carry all the fruit of
Southern California that is marketed in
the north and east; it would carry as
much coal from our mountains to Los
Angeles as it could find cars to run; it
would have all the passenger traffic be-
tween California and the east, because
it could afford to carry passengers at
rates which would make the Central
Pacific useless. Our belief is that such
road. honestly built and charging
only fair rates, would pay for itself every
four years as long as the world lasts.