BULLETIN OF THE 



No. 136 



Contribution by the Office of Public Roads, L. W. Page, Director. 

 February 12, 1915. 



HIGHWAY BONDS: 



A COMPILATION OF DATA AND AN ANALYSIS OF ECONOMIC FEATURES 

 AFFECTING CONSTRUCTION AND MAINTENANCE OF HIGHWAYS 

 FINANCED BY BOND ISSUES, AND THE THEORY OF HIGHWAY 

 BOND CALCULATIONS. 



By Laurence I. Hewes, Chief, Economics and Maintenance, Office of Public Roads, 

 and James W. Glover, Professor of Mathematics and Insurance, University of 

 Michigan, Collaborator, Office of Public Roads . 



TABLE OF CONTENTS. 



Introduction 



County highways 



Economic value of the market road 



Cost of highway construction 



Cost of highway maintenance 



The bond issue 



Total cost of highways 



Expediency of issuing highway bonds . 

 Appendix A. — State highway bonds... 



Page. 

 3 



5 

 6 

 10 

 12 

 14 

 24 

 27 

 34 



Page. 



Appendix B. — Approximate lists of county 

 and district highway and bridge bonds 



Appendix C. — Table showing cost elements 

 of gravel, macadam, and bituminous mac- 

 adam roads in Maine, Massachusetts, and 

 New Jersey 



Appendix D. — Theory of interest applied to 

 highway bond calculations 91-129 



Index to Appendix D 91 



37 



86 



INTRODUCTION. 



The practice of issuing bonds for highway and bridge construction 

 by counties and their subdivisions has become common. In 1,230 

 counties, or 41.1 per cent of all the counties in this country, there were 

 outstanding highway bonds on January 1, 1914. The total amount 

 of such bonds voted, 1 as ascertained by the Office of Public Roads up 

 to that date, was $286,557,073, of which township bonds alone 

 amounted to $57,153,718. The amount of outstanding local highway 

 bonds on January 1, 1913, was approximately $202,007,776. This 

 amount was increased during the year 1913 by current issues noted 

 below, but was also slightly decreased by maturing payments. 



The county highway bond is essentially a municipal bond; that is, a 

 bond issued by a public corporation. Statistics indicate that all 

 municipal bonds constitute about 20 per cent of the total of all bonds 

 issued, while Government bonds are about 10 per cent. Municipal 

 bonds are regarded as excellent investments and are frequently used 

 by banks as a second reserve. The amount of highway bonds issued 

 is indicated by comparison with the $79,741,688 of irrigation and 

 drainage bonds authorized in the interval from 1907 to 1912, inclusive. 



1 "Voted" is almost equivalent to "issued," except in State highway bonds. The difference between 

 bonds voted and bonds sold in 1912 was a little over 3 per cent. 



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