Of this there can be no reasonable doubt, for a corporation formed
under the provisions of the minority bill possesses all the advantages
that can be obtained by consolidation under one private corporation,
as authorized by the majority bill, and the additional advantages of
state and corporate management combined, which would be efficient and
reliable, beyond that of ordinary railroad corporations, inasmuch as
their acts would be most carefully watched and criticised by others
than stockholders, and the honor of securing a successful result to so
great an experiment and enterprise in the interests of the people,
would be a far greater incentive to even political ambition, than the
compensation received; for "great deeds foreshadow great men," and the
people are not slow in their rewards to those who are honest and
earnest in their service.
Why, Mr. President, if I had the ability to manage this enterprise, I
should hold the _honor_ of making this enterprise in the interest of
the State a success of more importance than the honor of being the
governor of Massachusetts. And when a man's reputation is thus at
stake, he cannot afford to cheat himself by withholding from the State
his best talents and energies. It has another and still greater
advantage,--the endorsement of the Commonwealth of Massachusetts,
which furnishes power and capital for terminal facilities, equipment
and the improvement of the line at a cheaper rate than any
consolidated company can procure it; and cheap capital in
disinterested hands secures _cheap_ transportation.
Can there be any doubt that a corporation thus formed and managed will
prove a financial success? If not a success, then we have great reason
to distrust a private corporation; with far less advantages, and a
larger capital, for doing the same business must prove a financial
failure.
To demonstrate this point in a more practical manner, we will assume a
proposition and verify this proposition by figures.
Judging from the present local business now done on the several
roads--forming what is anticipated as the Tunnel line, and the
testimony of eminent railroad men of the business that is sure to come
to this great through route to the West--it is fair to assume that the
whole will do a business that will average six millions a year for the
first five years; twenty-five per cent. of the gross earnings of the
leased roads, and property are reserved to provide for settlement of
the conditions of the said leases; and as they are not guaranteed the
payment of any amount beyond what their present business pays, can
there be any doubt but what the twenty-five per cent. on the increased
business will pay the six per cent. interest on the capital loaned to
increase the facilities for extending the business over the line?
The Railroad Commissioners report that the average expenses of all the
railroads of the Commonwealth is seventy-five per cent. of their gross
earnings; but there is no doubt but what it can be proved that it cost
less than seventy per cent. on the great trunk lines, and one of the
oldest and most successful railroad managers assured me that this
Tunnel line could be run for sixty per cent., but we will call it
seventy per cent., which makes with the twenty-five per cent.
ninety-five per cent., leaving five per cent. for net profit on the
whole business of six millions, which is $300,000. What next? We have
for the credit of the corporation or State, twenty-five per cent. of
the gross earnings of the business done on the Troy and Greenfield
Railroad and through the Tunnel. Calling the Tunnel twenty-three miles
in length,--which it is conceded it should be called for what it saves
in distance and grades,--and with the Troy and Greenfield Railroad,
which is forty-four miles, we have one-third of the whole distance,
and it is the judgment of practical railroad men that out of the six
millions of business, two millions would pass over this division and
through the Tunnel; and twenty-five per cent. on two millions is
$500,000 income, which, added to the $300,000, gives a net income of
$800,000 to the State, which is nearly six per cent. on thirteen and
one-half millions, the cost of the Tunnel and Troy and Greenfield
Railroad, with an additional expenditure of one and one-half millions
needed to make this division of the route what it should be as a part
of the great through line. In proportion as the business increases, in
that same proportion will the profits increase, and when the business
shall amount to ten millions, which I have no doubt it will in less
than ten years, you create a fund over and above the interest on the
whole cost that can be used for extinguishing the debt, purchasing the
stock of the leased roads, as the value is fixed by the terms of the
lease, or for the reduction of rates of fares and freights. If this
proposition will not bear investigation, pray tell me how the
stockholders of the consolidated corporations are to receive dividends
on their watered stock, with increased cost of improvements of the
line, and equipment for doing the same business.