Assuming that $30,000 per mile is the maximum cost of existing railways--as is shown in THE ARENA for February,--and that there are 160,000 miles, it would give a total valuation of $4,800,000,000; but that there may be no complaint that the nation is dealing unfairly with the owners of much water, it will be well to add twenty-five per cent. to what will be found to be the outside value of the railways when condemned under the law of eminent domain, and assuming that $6,000,000,000 of three per cent. bonds are issued in order to make payment therefor, and it involves an interest charge of $180,000,000, to which add $670,000,000, as the cost of maintenance and operation, and $50,000,000 as a sinking fund, and we have a total annual cost, for railway service, of $900,000,000 as against a present cost of $1,050,000,000 ($950,000,000 from traffic earnings, and $85,000,000 from other sources of railway revenue) resulting in a net annual saving to the public of $150,000,000 to which must be added the other various savings which it has been estimated would result from government control, and which, for the convenience of the reader, are here recapitulated, namely:--
Saving from consolidation of depots and staffs, $20,000,000 Saving from exclusive use of shortest routes, 25,000,000 Saving in attorneys' salaries and legal expenses, 12,000,000 Saving from the abrogation of the pass evil, 30,000,000 Saving from the abrogation of the commission system, 20,000,000 Saving by dispensing with high priced managers and staffs, 4,000,000 Saving by disbanding traffic associations, 4,000,000 Saving by dispensing with presidents, etc., 25,000,000 Saying by abolishing (all but local) offices, solicitors, etc., 15,000,000 Saving of five-sevenths of the advertising account, 5,000,000 ------------ Total savings by reason of better administration, $160,000,000
It would appear that after yearly setting aside $50,000,000 as a sinking fund, that there are the best of reasons for believing that the cost of the railway service would be some $310,000,000 less than under corporate management.
That $6,000,000,000 is much more than it would cost to duplicate existing railways, will not be questioned by the disinterested familiar with late reductions in the cost of construction, and that such a valuation is excessive is manifest from the fact that it is much more than the market value of all the railway bonds and shares in existence.