While from $25,000 to $30,000 a mile is a very liberal estimate of the average cost of American roads, the average cost of European railroads, owing to their expensive rights of way, substantial road-beds and heavy grades, is probably not less than $75,000 per mile. British railway companies have laid out for the purchase of land, for right of way and depot accommodations an amount about equal to the entire average cost of American roads for the same number of miles.
For instance, the Southeastern Company paid $20,000; the Manchester and Leeds Company, $30,750, and the London, Birmingham and Great Western, $31,500 per mile. The first Eastern Counties line paid even $60,000 per mile for land through an agricultural district. As nearly as can be ascertained, the average cost of the right of way of railroads was over $20,000 for the United Kingdom. In Belgium the average cost of the right of way was $11,000. It was lower, however, in the other countries of the European continent.
The topography of the country through which the English railways are built is such as necessitated enormous expenses for heavy embankments, cuttings, viaducts, tunnels and bridges, and in some cases increased the cost of the roads to fabulous sums. The Lancashire and Yorkshire Railway actually cost $260,000 per mile for the whole of its 403 miles. European roads have been built in a much more permanent manner and have terminal facilities whose cost is far beyond any sum paid for such purposes in this country. In Great Britain, moreover, the expenses of contests and of procuring charters have been very great and have probably averaged $3,000 per mile.
English railway men charge Americans with having indulged in stock-watering to a greater extent than any other people in the world. This is probably true, yet the English have not been dull students of this art, and they are far from free of having indulged in this luxury. Much of their railroad stock was issued in a wasteful manner and represents no actual investment, and it is safe to say that from 30 to 40 per cent. of their present railroad capitalization is water.
If upon the above basis both European and American railroads are to yield an interest of 4-1/2 per cent. on the actual investment, the former will have to earn at least $2,250 per mile more than the latter, and this difference equals about 50 per cent. of the average operating expenses of American roads per mile. Labor is cheaper across the Atlantic, but this difference is more than equalized by the employment of a much larger number of men per mile, as the following table will show:
| Countries. | No. of men employed per mile. | Average wages per annum. | Wages paid per mile. |
| United Kingdom | 18 | $335 | $6,000 |
| Belgium | 22 | 210 | 4,620 |
| Russia | 15 | 240 | 3,600 |
| Germany | 14 | 250 | 3,500 |
| France | 14 | 220 | 3,080 |
| United States | 5 | 555 | 2,625 |
The London and Northwestern Railway is 1,793 miles long and has over 55,000 employes, or over 30 per mile. The Lancashire and Yorkshire Company employs over 42 per mile.
The train men of Europe work less hours and earn less per capita for their employers than do the train men of this country. The average annual gross earnings per employe on sixteen of the leading lines of Great Britain, as shown by Mr. Jeans, appear to be $975 against $1,600 on fifteen leading lines of the United States, while the average net earnings per employe are $465 on the British lines against $720 on the American lines; making a difference in favor of this country of 70 per cent. in gross earnings and 53 per cent. in net earnings. If American labor is more expensive, it is also more efficient than labor is elsewhere.
It must also be considered that the average haul in Europe is much less than the average haul in the United States. It has always been maintained by the railroad companies, and very justly, too, that the terminal charges are as important a factor of freight rates as is the cost of carriage. The terminal charges are the same for a twenty-five-mile haul as for a thousand-mile haul; they form a comparatively large part of the total charges for the former and a very small part of the total charges for the latter. It is therefore manifestly unjust to compare the rates per ton per mile of Europe with those of the United States without making due allowance for the difference in the length of their average hauls. All other things being equal, a fair comparison between the freight rates of different countries should be based upon hauls of equal length.
There is another consideration which should not be lost sight of. The commodities in the United States which contribute principally to the long haul are raw products. The universally low rates of these commodities greatly lower the general average. In Europe, on the other hand, manufactured goods predominate as long-haul freight, and based upon increased risk and increased cost of carriage, considerably swell the general average of freight charges. The railroads of the United States also do more business per train mile than those of any other country excepting perhaps Austria, Russia and India. This should certainly enable them to do business for less than it is done by transatlantic lines.