The Commission, in its annual report, shows the securities issued per mile of road (first main track), but does not show the results per mile of main track (i. e., 1st main track, 2d, 3d, 4th, and other main tracks), nor does it show the results per mile of all tracks (i. e., main tracks, yard tracks, passing tracks, and industrial tracks). From the consolidated balance sheet, it will be noted that the securities per mile of road have increased 29%, while per mile of main track they have increased only 24%, and per mile of all tracks they have increased but 14 per cent. However, deducting the investments in stocks and bonds of other corporations, and showing the results only for the securities issued on account of the cost of road and 12% equipment, we have an average per mile of road of $62,388, an increase of 12%; and an average per mile of all main tracks of $56,166, an increase of 8%; and an average per mile of all tracks of $42,864, or a decrease of 0.7 per cent. It will be noted that a considerable part of these increases is due to increased cost of equipment, and the advantageous results obtained from such investment have been clearly shown. Of the investment in the track itself (cost of road), it will be noted that the cost per mile of main track has increased only 5%, while the cost per mile of all tracks shows a slight decrease in 1908 as compared with 1890.

These comparisons are more significant and convincing in the light of the large expenditures since 1890 for the reduction of grades, revision of line, interlocking towers, automatic block signals, increased weight of rail, increased capacity of bridges, improved stations and terminals, elevation of tracks, and the many other items going to make up the additions and betterments, and increasing the book cost of the property. The figures plainly prove that there has been no general practice on the part of the railroads of the country, from 1890 to date, of issuing capital securities without securing full value for the vast amount referred to. Why, then, should any restriction be placed on the form or manner of their future appeal for the very large volume of capital necessary to keep abreast of American industrial development? Why should they be limited as to what form of security they may offer in return for the cash capital which they must obtain if they are to serve the public adequately and properly?

TABLE 10.—Consolidated Balance Sheet for Railroads of the United States. Exclusive of Terminal and Switching Roads.

Assets.
Total.Per mile of road.Per Mile of main tracks.Per mile of all tracks.
1908.1890.1908.1890.1908.1890.1908.1890.
Railroad:
Cost of road$12,035,195,403$7,333,096,430$56,268$51,400$50,656$48,109$38,659$40,033
Cost of equipment1,178,571,137422,290,9515,5102,9604,9612,7703,7862,305
Material and supplies226,250,46263,785,9501,058447952419727348
Total$13,440,017,002$7,819,173,331$62,836$54,807$56,569$51,298$43,172$42,686
Investments:
Stocks owned$2,115,313,379$489,049,859$9,890$3,428$8,903$3,208$6,795$2,670
Bonds owned1,271,311,512241,115,6655,9441,6905,3511,5824,0831,316
Total$3,386,624,891$730,165,524$15,834$5,118$14,254$4,790$10,878$3,986
Current Assets:
Cash and current assets$1,213,575,272$307,871,188$5,674$2,158$5,108$2,020$3,898$1,681
Sinking, Insurance, and other funds154,975,409125,095,987724877652820498683
Total$1,368,550,681$432,970,175$6,398$3,035$5,7602,840$4,396$2,364
Miscellaneous$1,277,458,795$710,300,536$5,973$4,979$5,377$4,660$4,103$3,878
Grand total—All assets$19,472,651,369$9,692,609,566$91,041$67,939$81,960$63,588$62,549$52,914
Liabilities.
Securities Issued:
Capital stock$7,289,597,964$4,179,156,990$34,081$29,293$30,682$27,417$23,415$22,815
Bonds9,441,200,2614,462,577,07944,14131,28039,73829,27730,32724,362
Total$16,730,798,225$8,641,734,069$78,222$60,573$70,420$56,694$53,742$47,177
Current Liabilities:
Accrued interest $25,341,994 $177 $166 $188
Other current liabilities$1,151,233,255440,513,629$5,3823,088$4,8452,890$3,6982,405
Total$1,151,233,255$465,855,623$5,382$3,265$4,845$3,056$3,698$2,543
Miscellaneous$845,115,552$394,918,201$3,952$2,768$3,5572,591$2,715$2,156
Grand total—All liabilities$18,727,147,032$9,502,507,893$87,556$66,606$78,822$62,341$60,155$51,876
Profit and loss balance745,504,337190,101,6733,4851,3333,1381,2572,3941,038
Grand total—All assets$19,472,651,369$9,692,609,566$91,041$67,939$81,960$63,588$62,549$52,914

It ought also to be borne in mind, in this connection, that, while there could be no lawful mode for the revision of existing capitalization, should it in any instance be found to be too small or too great when measured by the results of such a valuation, the future issue of securities must be controlled by the necessities of the carriers and the state of the market, and is also practically restricted by the Interstate Commerce Commission's accounting system, which declares what expenditures may and what may not be carried into the capital account. The law cannot compel any company to repudiate any existing security, and if it could it is not to be supposed that Congress would compel such an impairment of contract rights; public policy will not permit in practice restrictions that would prevent the issue of securities to meet the actual needs of the public and the carriers; the accounting system prevents issues of any other sort. Further restrictions would be cumulative and superfluous.

TABLE 11.

Track.1908.1890.Increase.Percentage of increase.
Single track213,888.36142,665.8971,222.4749.9
Second track20,209.058,437.6511,771.40139.5
Third track2,081.16760.881,320.28173.5
Fourth track1,408.99561.81847.18150.8
  Total, all main tracks237,587.56152,426.2385,161.3355.9
Yard track and sidings73,728.5730,750.1742,978.40139.8
  Total mileage operated (all tracks)311,316.13183,176.40128,139.7369.9

"The Interstate Commerce Commission in 1908 report that their Balance Sheet covers 'miles of road' aggregating 213,888.36 miles, whereas their statement of mileage represents all roads reporting to the Commission whether or not they furnished a Balance Sheet.

"To analyze the Consolidated Balance Sheet, we have revised the statement of mileage to cover same roads as are included in the General Balance Sheet. The 'miles of road,' i. e., miles of first main track, are actual. The Commission's report not showing separately for each line the miles of other main tracks or yard tracks and sidings, the figures shown in the statement of mileage are approximate. It includes mileage of all second, third and fourth tracks. Undoubtedly, practically all of the second tracks, third tracks and fourth tracks are owned, or operated by, roads furnishing the Commission with a Balance Sheet. Mileage of Yard Tracks and Sidings is based on the proportion which the single-track mileage of roads represented in the Balance Sheet bears to the total single-track mileage of roads reporting to the Commission."

Mr. Riggs considers seriatim nine objections to the ordinary methods of estimating cost of replacement which were mentioned specifically by the writer, as among the most important commonly omitted items, in an address before the New York Traffic Club, delivered during January, 1909. He concedes that the writer is correct in urging that allowances for "working capital with which to carry on the business" and for "impact and adaptation" ought to be included, and were omitted in Michigan and have been usually omitted. These are two of the nine objections specifically raised. As to five others, Mr. Riggs seems to be in considerable doubt. Concerning the objection that an allowance of 3% for interest during construction is too low, he contends that it was justified in Michigan by the "assumption," that the whole work of replacement would be accomplished in one year, and also "that on long roads partial operation would commence as various sections of the line were completed." He admits that these assumptions "clearly would not be proper" under different conditions, but appears to hold that they were warranted as to the Michigan work.