24 BULLETIN 136, IT. S. DEPARTMENT OF AGRICULTURE. 



The details of advertising and selling highway bonds are frequently 

 prescribed by law. Bids from bond houses are always made con- 

 ditioned on an investigation of the validity of all proceedings leading 

 to the issue. The attorneys for the bidders will require from the 

 municipality certified copies of all papers concerning the transaction. 

 There frequently is much variation in the form of the bids for a single 

 issue. The items of denomination of the bonds, options on delivery, 

 portion of the issue bid for, deposit of the money in stipulated banks, 

 and items of less importance are often written into the bids. 



TOTAL COST OF HIGHWAYS. 



Charges included in total cost. — The first cost of construction 

 is not the total cost of a highway. It is becoming customary to con- 

 sider the cost of highways for a period of years. 1 This view of high- 

 way costs is important in the construction of highways with bor- 

 rowed money. Municipal or county bonds are invariably issued 

 for a definite term or period, and it is desirable, therefore, to know 

 the total cost to a community during the life of the bond. Undoubt- 

 edly the best financial policy is to restrict the term of the highway 

 bond to the probable useful life of the original type of road under 

 actual conditions. 



There is considerable difference of opinion among engineers and 

 highway officials as to what constitutes the total cost of a highway 

 during a given period of years. Questions arise over the interest 

 charge on the original cost, the annual payments to amortize or 

 retire the loan, the depreciation charge, and the repair and main- 

 tenance charge. Evidently if a repair and maintenance charge is 

 made sufficient to maintain the road absolutely for an indefinite 

 period, a depreciation charge has no place in the estimate of total 

 annual cost. It is also apparent that total and annual costs for the 

 loan can be made to vary at will by changing the period of the loan, 

 i. e., the term of the bond. To make the problem more definite, it 

 is desirable to assume, first, that the highway loan is a terminable 

 loan and for a period not greater than the period for which the road 

 will continue to serve with the original type of surface, grade, and 

 alignment; and, second, that there is charged as the total cost of the 

 road for that period all money paid by the community for that road 

 in the form of taxes. 



Although the cost of resurfacing a road or extraordinary repairs 

 is a cost which occurs only at intervals, it is a safe and conservative 

 plan to make an annual charge for all such work. As an example, 

 if a water-bound macadam road is built at a cost of $8,000 per mile 



1 Cf., for example, the report of the Cambridge (Mass.) Paving Commission, June, 1911, and the 1909 

 Report of Public Work in Cuyahoga County, Ohio, p. 21. 



