Handbook of Railroad Construction; For the use of American engineers. / Containing the necessary rules, tables, and formulæ for the location, construction, equipment, and management of railroads, as built in the United States.

by George L. Vose

PRELIMINARY OPERATIONS.

10. The first step to be taken in starting a railroad enterprise, is the choice of a board of directors (provisional), whose duty is to find all that can be known of the commercial, financial, and agricultural nature of the country to be traversed. To determine as near as possible its ability to build and support a road; and to obtain the necessary legislative enactments.

11. The determination of the increase of traffic which the road may be expected to excite, is a difficult matter. There can be few rules given for proceeding in such an inquiry. It seems very easy to prove by what roads have done, that any project will be profitable.

An abstract of a report lately published, tries to prove that a road will pay forty-five and one half per cent. net; the working expenses being assumed at only thirteen and one half per cent. of the gross receipts. The error here lies in assuming the working expenses too low, as few roads in the country have been worked for less than forty per cent.; a more common ratio being fifty one-hundredths of the gross receipts.

Not one half of railroads are built for the original estimate. In few cases has sufficient allowance been made for the sacrifice undergone in negotiating the companies’ securities. All general instructions that can be given relating to the determination of prospective profits, are, to keep the estimate of constructing and working expenses high, and that of the assumed traffic low; not so low, however, as to require a too lightly built road.