Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1911-09-30
do other forms Of business, is an OBJ
vious conclusion.

railroad he must pay taxes, averaging
in North Dakota $500 mile for main
lines and nearly 5000 mile for branch
lines; his per cent interest is s. 100
or ST. 800 for these two items. But he
must maintain and operate his railroad
so as to perform the duty imposed upon
him by the public, in the hope that as
time passes business will grow suf-
6ciently to justify his investment.
To maintain and operate mile Of
branch railroad in good and bad wealth.
er, and giving only moderate amount
of train and station service, will cost
about 81, 500 to $2,50o per mile, so
that the investor, before he puts $780,
900 or more into a mile of railroad
should see in the not far distant future,
earning from that mile of from So 800
to 81 ,300..
On the $50, 900 mile Of branch rail-
road the business is generally very light
and if the gross earnings are $40 a
working day or So $50 year, it means
that the branch is above the average
Many branches in thinly settled coun-
try will not produce even $40 work.
ing day gross or $4,000 a year, and
some in this state will not produce even
81 500 a year gross, because the rates
on both passenger and freight business
are so low that the volume of business
done at those rates will produce no
more, and the railroad has very little
of earnings except from the handling
of property and passengers.
So the owner of mile of branch line
must face loss year after year, upon
many branch lines in newly settled
and undeveloped country, hoping that
the business of the railroad in the ag-
gregate will enable him to carry such
unproductive pieces of property until
they contribute their full share to the
SUM needed to pay taxes, interest and
dividends,
You who live in this country of op-
portunities should understand these
things, because you make the laws
which your elected officers must under
their oath of office, carry out. If you
make laws that make the chance of
return on the investment in mile of
railroad remote, you defer the con-
struction of new lines, because people
will not invest in an unproductive rail-
road mile any more than they will in
any other business, unless they can see
their way clear to future profit, and
feel sure that the principal is safe.
The margins in the railroad business
are very small; how small can be IL
Illustrated by the fact that if man had
owned all the stock of an average mile
of railroad in the United States for
the 26 years ending in 1907, his net
profit would have averaged only SLAB
per day.
He would have had to own four
miles-at an investment of $120, 600
to make the day wages of a brick
mason in New York.
If his mile of railroad had been in
the northwest, instead of an average
mile of railroad, for the country as a
whole, he would have made for the
twenty years from 1882 to 1901 only
| 81 cents net profit a day.
New railroads either operate at loss
or barely pay expenses during their
early years. This instance fairly repre-
sents the situation the investor in new
railroad enterprises must face. 1t takes
courage, and faith in the future, to
put large sums into railroad extensions.
When the directors and stockholders of
railroads, and the investing public, be-
lieve that the attitude of the people
toward railroads is unfriendly and harsh
they cannot be blamed for hesitating.
Although the railroad offers solid
and substantial kind of investment, the
returns are very moderate. For 1909
three -tenths of all the railroad stock of
the country paid no dividends whatev-
err, and the remaining seven-tenths paid
only AZ per cent. Investors in rail-
roads want a reasonable return on
their money and they will invest frrth-
er in railroad securities, if they believe
that the public's attitude is friendly. In
a state such as this, much encourage
ment can be given them bv demonstrate
ing that the attitude of the people of
the state is fair and cordial.
Texas did much for herself with
railroad investors, when last year the
legislature refused to pass single anti
railroad law. Other states could do the
same with profit.
What will $50, 900 invested in a gen.
eral merchandise store in this state pro-
duce?
l have recently received the annual
statements of two representative bust
ness firms located in the Missouri Slope
country. The first is engaged in the
hardware business and carried a stock
last year of $50, 900, or about the cost
of mile of railroad. The yearly bust
ness was $50, 900, $3oo day, and the
net profits we're 10 per cent or 50 900,
or 80 per cent on the $50, 900 stock.
A second firm is engaged in the dry
goods business and carried stock of
$50 900 or the value of two miles of
railroad. Its business was $3.50, 900 or
$500 a day, and its net profits were 8
per cent or $l2, 900, or 20 per cent on
the $50, 900 stock.
In the first instance the return to
the investors was more than four times
the return to the holders of dividend
paying railroad stocks Of North Da-
kota railroads. and in the latter case,
nearly three times as much. In the
first case the return was seven times
as much as the average returns on
railroad investments in the United
States in 1909, and in the second case
nearly five times.
I have the figures on the business
of two firms CARRYING a smaller stock,