ME. MIDGLEY S ARTICLE. CONTINUED. 423 



matters not how wretched their failures, renewed attempts 

 are made. Experience, however, has developed considera 

 tions that must be admitted in determining what is a rea 

 sonable rate. Let us note a few : 



Every railroad undertaking involves two sorts of expend 

 itures; investments, which includes the cost of the road 

 way, rolling stock, depots, etc.; and expenditures, which 

 cover outlays for labor and material consumed in the daily 

 service of transportation or in maintaining the property. 

 No one will deny that the charges should be made to yield 

 a remunerative return upon the investment over and above 

 all working and incidental expenses. Ordinary foresight 

 dictates that the receipts should so far exceed expenses as 

 to induce capital to make the necessary investments. This 

 excess is commonly designated as a certain per centage on 

 the investment, a fixed interest on the borrowed principal, 

 and dividends, fluctuating with prosperity, on the contribu 

 ted part, represented by shares. No other result is satis 

 factory, either to the owners or patrons of the road. But 

 the benefits of a good, well-managed railroad accrue more 

 directly to the community than to the stockholders. 



Every railroad is worth what it would cost to replace 

 it, and upon that valuation the company are entitled to a 

 fair return. In sparsely settled localities this policy might 

 establish rates deemed exorbitant. But is it not a fact, too 

 often lost sight of, that it costs just as much to construct 

 a railway across a new territory as it does through a densely 

 populated district ? It may cost more. The iron, material, 

 and supplies have to be transported so much further ; and 

 the capital which furnished them commands interest upon 

 its outlay as imperatively as if expended where the return 

 would be surer and more speedy. In the nature of things, 

 therefore, the rates exacted must be gauged to yield the 



