CHAPTER XXVII—COMMERCE
The American Railway System (1865)
BY BART., M.P. SIR SAMUEL PETO
THE system . . . on which railroads have been permitted to be constructed in America has been one of great simplicity. . . . In America . . . every one in the country has felt, from the first . . . that the construction of a railroad through his property, or to the city, town, or village he inhabited, was a source of prosperity and wealth, not only to the district in which he resided, but to himself personally. . . .
As a rule, nothing has been easier than to obtain from the legislative authority of a State in America a concession, or as it is there styled, a "charter," to lay down a road. The land in many caes, especially where it belonged to the public, has been freely given for the line; in other cases, where landed proprietors were affected, comparatively small compensations have sufficed to satisfy their claims. The citizens residing in the towns and populous places of the different districts, have hailed the approach of a railroad as a blessing. Under certain regulations, lines have been permitted to be laid down in the main streets and thoroughfares of the cities, so that the trains may traverse them at prescribed speeds, and so that goods may be put upon trucks at the very doors of the warehouses and shops. . . .
The influence of railroads on the value of real estates along their lines, and in the cities in which they terminate, is so well understood in America, as to have afforded important financial facilities to their construction. It is not the public who are invited in America to take railway shares; they are subscribed for in a wholly different manner. In order to promote the construction of a line, not only does the State which it traverses frequently afford it facilities with respect to land, but pecuniary facilities are often given by the cities and towns giving securities for certain amounts on their Municipal Bonds, The cities in which it is to have its termini also agree to subscribe for portions of its share capital, and so do the inhabitants of the towns and villages through which it is to pass. This is a very important feature of the American railway system, inasmuch as it gives the inhabitants of each district which a railway traverses, a direct local and individual interest in the promotion and well-working of the line. Every one, in fact, is interested in contributing traffic to Iris own railway.
Not only the whole cost of maintaining the roads, but a very considerable proportion of the cost of their construction, has, in the case of the majority of the lines in America, been thrown upon revenue. I am afraid that the consequence of this has been injurious to public confidence in the American railways as commercial securities. Where lines are imperfectly constructed in the first instance—where they have to bear all the effects of climate and of wear and tear, whilst in indifferent condition, it is quite obvious that the cost of reparations, even in the very early stages of their working, must be a serious burden. And where all this is thrown, at once, on revenue, adequate dividends cannot be expected. . . .
Most of the American lines were originally made in short lengths, as lines of communication between different towns in the same State; and without regard to any general system of communication for the nation. It follows, that even in the cases of lines which are now united and brought under a single management, much diversity of construction, and a great want of unity of system is observable. One of the great deficiencies of the American railroad system is, in fact, the absence of a general policy of management. Scarcely any attempts are made to render the working of lines convenient to travellers, by working the trains of one company in conjunction with another; and this gives rise to complaints on the part of the public, which may, some day or other, be made to afford a ground of excuse for governmental interference. Nothing can be more desirable for the success of American railroad enterprises than well-considered general arrangements for the working and interchange of traffic.
Remarkable as has been the rapidity with which the American railroads have been constructed, and great as is the total mileage already made, the railroad accommodation of the United States is not to be regarded as by any means meeting the requirements of the country.
The rapid growth of the system has only been co-equal with the rapid growth of the population: the extent of mileage is attributable to the vast extent of territory settled, and the great distances between the seats of population.
In many parts of the States, indeed, the existing railways are quite insufficient. In the South, the system is very imperfectly developed. Whilst slaves existed, there was a determined hostility in the Southern States to the expansion of any general railway system, arising from the apprehension that it would be used for the escape of slaves. . . .
From West to East, also, the present railway are quite insufficient for the growing traffic. The lines of communication from the West by canal, &c., which existed previously to railways, have not been affected by their construction. The produce of the Western States has, in fact, increased faster than the means of transport, and additional facilities for the conveyance of goods are urgently required. It is of the utmost importance to the development of the West that no time should be lost in making this additional provision.
Sir S. Morton Peto, (New York, 1866), 255–265 passim.