GENERAL CONSIDERATIONS.
Dividends.—While many readers are probably not holders of railway stocks, yet a look at the dividends received by those who are will not be without interest. The little chart given below tells an interesting, although a not over-attractive story.
Average Dividend Paid on Total Capital Stock.
It shows that, comparing the aggregate of all the railroad stocks of the country with the aggregate of all dividends paid, the holders of stock realized an average of 3.03% on their investment in 1876. In 1878 it had fallen to less than 2½%. From that date to 1885 the record makes a curve ending just above 2%. A slight rally is indicated for 1886 and 1887, but 1888 carries it down to 1.81%. The stock of many roads has paid no dividend whatever these later years, and the lines whose stock proves a good investment at par are very few.
Net Earnings and Mileage Built.
Net Earnings per Mile.—Although the studies of the financial question already made undoubtedly point out the true drift of railway business, yet one more comparison is worth making, both for its bearing on the question of profits and the study of the influence of profits on railway building. The upper one of the two charts given herewith is the record of net earnings per mile of road in operation, and is based on the reported net earnings less the interest-charge. It therefore shows the average number of dollars each mile had earned, after paying all expenses and the interest on its debt. This money, then, is the clear amount each mile could apply each year to pay the principal of its debt and the dividends on its capital stock, or to use for improvements, such as rolling stock, stations, better road-bed, new rails, or any other betterments which might seem advisable.
In 1876 this sum was $1,264; in 1880 it was $1,798, since which time it has suffered a serious decline, until in 1888 it was only $650. It is the story of the previous studies repeated, and needs no further reiteration.
Railway Building.—The larger chart given on [page 429], gives the history of railway building from 1831 to 1888. The lower chart of the two given together on [page 444], repeats the annual record from 1876, for the purpose of studying the influence of profits on the progress of building. The net earnings per mile show a reduction in 1877. The following year shows an increase of earnings, and the building responded somewhat feebly the same year. The next two years (1879 and 1880) show great gains in net earnings, and the impetus given thereby to building, carries its increase steadily forward even two years beyond the turning-point of the earnings. The decline is then mutual to 1885. In 1886 the advance in earnings was responded to by such a remarkable increase in building that the stimulus is to be sought for partly outside of the increase of earnings, and is undoubtedly found in the desire to occupy the newly opening fields of western settlement; for the records mark unparalleled activity among the great trunk lines of the West in pushing their advances in Dakota, Kansas, Nebraska, and Colorado, in 1886 and 1887. This is graphically shown in the map of 1889, when compared with that of 1880 (pages 432 and 433).
Ratios of Increase.—It is difficult to obtain a just impression of values when expressed by figures alone. It is easy when these values are expressed in lines or colors. The greater difficulties come in the effort to compare values expressed in differing terms. To read that the increase of population was 23,400,000 from 1870 to 1888; and that of railway mileage was 62,785 miles; and that of freight traffic was nearly 30,000,000,000 tons, in the same period, and then to attempt the comparison of increase without further aid, is a hopeless task.
As a study of financial economy the comparison is worth making, for evidence of the over-development of an industry or a financial interest, rightly considered, may prevent suicidal development. The chart given on the next page makes the comparison easy. The actual increase in each instance is reduced to percentages, and the several chart-lines measure the progress. The increase of population is estimated on the basis of 62,000,000 persons in 1888. (So far as the lesson conveyed by the chart is concerned, the estimate might as well have been 60,000,000, the variation in the location of the line would be trifling.)
It appears, then, that railway mileage has increased nearly two hundred per cent. and that the rate of increase of freight traffic (as measured by ton-miles[38]) has been enormously larger, considering the history of the thirteen trunk lines as indicative of the whole. It further appears that the freight traffic of the West has developed much more rapidly than that of the East, during the last eight years.
Ratios of Increase.
Construction and Maintenance.—The tabulated statistics of these subjects are not of special interest, as the annual variation of cost is slight. In both these elements the wage-question is so large a factor that a comparative level is maintained from year to year. The available figures touching these subjects are few. The first table on the opposite page gives the average cost of construction per mile of the total mileage of the country; and the cost of maintenance per mile as reported by the New York, Lake Erie & Western Road. The second table furnishes interesting details of the cost of maintenance.
Construction and Maintenance for Ten Years.
| Years. | Cost of construction per mile. | Cost of maintenance per mile. |
| 1879 | $57,730 | $1,671 |
| 1880 | 58,624 | 1,371 |
| 1881 | 60,645 | 1,448 |
| 1882 | 61,303 | 1,335 |
| 1883 | 61,800 | 1,533 |
| 1884 | 61,400 | 1,281 |
| 1885 | 61,400 | 1,082 |
| 1886 | 61,098 | 1,496 |
| 1887 | 58,603 | 1,533 |
| 1888 | 60,732 | 1,226 |
Comparative Statement of Maintenance of Way of the Illinois Central Road for Ten Years.
[Table—Part 1 of 2]
| Year. | Miles of road at end of year. | Maintenance of Way. | ||||
| Labor on track. | New rails. | Cross-ties. | ||||
| $ | Tons. | $ | Number. | $ | ||
| 1879 | 1,286.72 | 297,363.40 | 9,276.00 | 125,062.70 | 264,520 | 93,107.51 |
| 1880 | 1,320.35 | 343,982.23 | 9,767.49 | 215,365.32 | 260,116 | 93,330.32 |
| 1881 | 1,320.35 | 411,018.91 | 10,098.47 | 169,718.80 | 345,260 | 127,279.76 |
| 1882 | 1,908.65 | 690,112.59 | 8,438.00 | 128,521.48 | 604,096 | 201,648.26 |
| 1883 | 1,927.99 | 742,476.20 | 8,191.79 | 183,239.65 | 425,627 | 153,739.00 |
| 1884 | 2,066.35 | 706,751.86 | 6,342.73 | 93,446.25 | 462,665 | 154,083.19 |
| 1885 | 2,066.35 | 749,254.19 | 8,747.31 | 87,331.95 | 508,756 | 176,835.69 |
| 1886 | 2,149.07 | 705.553.82 | 6,376.40 | 63,238.84 | 492,524 | 174,515.72 |
| 1887 | 2,355.12 | 760,093.33 | 6,092.66 | 79,917.84 | 573,898 | 197.989.47 |
| 1888 | 2,552.55 | 847,806.67 | 8,172.36 | 106,372.94 | 654,141 | 214,130.73 |
[Table—Part 2 of 2]
| Year. | Maintenance of Way. | Expense per mile run by engines. | Repairs of fences. | Repairs of station building and water-works. | ||
| Repair of bridges. | Other items. | Total. | ||||
| $ | $ | $ | Cents. | $ | $ | |
| 1879 | 73,119.56 | 125,041.92 | 640,575.53 | 11.73 | $33,416.86 | 45,755.09 |
| 1880 | 105,551.62 | 49,399.09 | 807,628.58 | 12.39 | 36,981.94 | 80,887.34 |
| 1881 | 114,193.18 | 30,399.46 | 852,610.11 | 12.16 | 36,690.33 | 70,699.58 |
| 1882 | 174,826.24 | 17,277.34 | 1,212,385.91 | 11.87 | 31,032.57 | 87,588.26 |
| 1883 | 121,101.03 | 72,294.71 | 1,272,850.59 | 11.89 | 30,084.49 | 87,291.93 |
| 1884 | 173,831.23 | 107,236.13 | 1,235,348.66 | 12.20 | 21,394.71 | 94,122.03 |
| 1885 | 164,586.39 | 88,126.28 | 1,266,134.50 | 11.27 | 21,932.48 | 94,518.19 |
| 1886 | 172,144.65 | 63,976.69 | 1,179,429.72 | 10.15 | 26,668.91 | 123,519.83 |
| 1887 | 250,337.47 | 61,441.88 | 1,349.779.99 | 9.95 | 31,905.46 | 129,526.76 |
| 1888 | 310,908.42 | 115,898.04 | 1,595,116.80 | 10.74 | 40,423.39 | 170,023.85 |
Employees.—This item is also one touching which railways make few reports. The New York Central & Hudson River Road reports as follows: "Average number of employees, 20,659, being at the rate of 14.54 per mile of road worked; aggregate wages, $12,460,708.89, or $603.16 each. Payments in wages equalled 50.60 per cent. of the total working expenses, against 51.90 per cent. in 1886–87." Reckoning that each employee's wages supports an average of three persons, we have a total of 61,977 persons clothed, housed, and fed by this one corporation.
"Poor's Manual" discusses this subject at some length, but mainly on theoretical ground.
Rolling Stock.—A table showing the history of the growth of the rolling stock of the country is given on [page 148]; it is therefore unnecessary to repeat it here.
Capital Invested.—It is folly for the human mind to attempt to grasp the immensity of the financial interest expressed in the statement, that the combined capital invested in the railways of the United States is $9,369,398,954. No more can it comprehend that this vast aggregate has been the growth of about fifty years in a single interest, in a single country.
Capital Invested.
| Year. | Capital. | Year. | Capital. |
| 1876 | $4,468,592,000 | 1883 | $7,477,866,000 |
| 1877 | 5,106,202,000 | 1884 | 7,676,399,000 |
| 1878 | 4,772,297,000 | 1885 | 7,842,533,000 |
| 1879 | 4,872,017,000 | 1886 | 8,163,149,000 |
| 1880 | 5,402,038,000 | 1887 | 8,673,187,000 |
| 1881 | 6,278,565,000 | 1888 | 9,369,399,000 |
| 1882 | 7,016,750,000 | ||
The first date in the table marks the close of the first century of our national life. Since that time the investment has more than doubled; an increase of nearly five billion dollars in twelve years—an average of over four hundred million dollars per year. More exactly expressed, this means $1,118,906 per day, or $46,621 for every hour, day and night, during the first twelve years of our second century.
It is safe to say that no other financial interest shows a total of such wonderful magnitude. And with greater emphasis may it be said, that the finances of the world, record, in all the ages, to the present day, no such astounding increase of investment.