mountain, was located and contracted for last December, to avoid delay and a premature expenditure of capital on the lighter work, which would have followed a general letting of the whole Road at that time, or since, even if it could have been prepared for contract in season.
If sufficient means shall be obtained to prosecute the western division, I would recommend that the heavy portions of the work, between the Conemaugh and the confluence of Brush and Turtle creeks, should be placed under contract, together with the grading, continuously from the Portage road to the point of divergence of the line from that river towards Pittsburg, if the Conemaugh route is adopted.
When the connection is made with the Portage Railroad, from the east, there will then be a continuous railroad from Philadelphia to Johnstown, 282 miles in length, and, if opened at the same time to near Blairsville, it will be extended to 310 miles, with only 43 miles of turnpike thence to Pittsburg, or 75 miles of canal navigation, giving a line of communication, with the Ohio river, far superior to any railroad route existing, or any that will at that time be built. On freight destined to the interior of Ohio but one transshipment will then be necessary. The canal boats, loaded at the terminus of the Road, can be conveyed to any point upon the Ohio canal.
If your Road possesses no other source of revenue than the local travel and transportation of the rich and populous region to be traversed by it—secured, as it will be, from competing lines by natural barriers stretching out on either side from the Susquehanna to the Potomac—they would be sufficient to justify its construction. The influence of the Pennsylvania canal has called into activity all the elements necessary to render the enterprise profitable, and, in consequence, it will be more successful with that improvement, as a pioneer rival, than if it was now to enter upon an unoccupied field. Whatever may be the effect of your work upon the business of the canal—and I do not believe it will be injurious—there can be no doubt but that it will add very materially to the revenues of the Commonwealth.
Important as the local sources of revenue are to the Company, they will afford but a limited amount of business compared with that to be derived from the great West. The route of your improvement is directly on the line that would be most desirable for a railroad to pass from St. Louis, or the confluence of the Mississippi and Missouri rivers, through the center of the wealth and enterprise of the Mississippi valley to the Atlantic. With a map of the Union before you, it will be found to be impossible to draw a line upon it that would accommodate so large an amount of population, or an equal extent of fertile country.
Through the broad bed of mountains that divide the Atlantic from the Western States—traversed by our route for 190 miles—natural gorges are found, cutting all of them to their bases, except the Allegheny, which is passed with comparatively easy gradients, and without encountering difficulties of a very unusual character. These favorable features of the country give to us a line which is the shortest and best that can be obtained between these sections of the Union, and insures to the Company the whole of the travel and light transportation, with much of the heavy trade, destined to Philadelphia and points north of this city, of the vast region between a line along the southern shores of Lake Erie, touching Lake Michigan, and extending to the far West, and the immediate valley of the Ohio river. The distance from Cleveland to New York being 80 miles shorter by this route than by the New York and Erie Railroad, much of the travel embarked upon the lakes for that city from the north and west must also be diverted to this line.
In view of these circumstances, can a reasonable doubt be entertained by any one as to the profitableness of the stock of the Pennsylvania Railroad Company? Its natural position must give to it more than sufficient business to make it yield large profits. Indeed, I confidently advance the opinion that when the Road shall have been completed that it will not be a question "whether it will pay an interest on its cost," but to what point the rates of freight and passage shall be reduced to give the Company ample revenues and at the same time make the work most extensively useful to the public.
Dividends from its revenue can be made of 6, 8 or 10 per cent. by changing the rates of freight and passage, at the discretion of the Directors.
From some experience in the management of the business of other roads, much less favorably situated than this, I feel no hesitation in making this prediction. I look upon the result as one upon which there can be no doubt entertained.
The inquiry may be made, "If this Road must prove a profitable investment, why other works in Pennsylvania, favorably located, have not yielded remunerating dividends to their proprietors?" In reply it can be stated that there is no important work, leading from Philadelphia, that ought not now to divide large profits, if their stock and funded debts exhibited a fair cash value of the property represented. Most, if not all, of these works, were commenced with inadequate capital, for the object in view, and from the anxiety of the stockholders to realize the large profits promised on their completion, and the public to enjoy the use of the improvement, they have been pressed forward faster than true economy, or the funds of the company, would justify. Engagements were made, relying upon fortune, or accident, to provide the means to meet them. These resources failing, they were thrown upon the mercy of either the contractors or the money lender. And, in consequence, the cost of the works has been rolled up to an amount not anticipated, and, in many cases, debts incurred, under the pressure of the moment, in the most objectionable shape, to meet which the whole of the receipts of the companies have necessarily been mortgaged.
In New England, and also in New York—where railroads have, in many cases, been deprived of the privilege of carrying freight—judiciously located roads have invariably paid well. Their success has not been caused by the exercise of any peculiar skill or economy in their management, as generally supposed, for, in this respect, though they stand deservedly high, there is none that conduct their business, under all circumstances, with as much economy as the Baltimore and Ohio Railroad, or some other southern companies.
In closing this communication it gives me much pleasure to acknowledge the zealous and cordial co-operation that I have received from my Associate and Assistant Engineers in carrying on the important work that you have committed to our charge.
Respectfully submitted, by
Your obedient servant,
J. EDGAR THOMSON,
Chief Engineer.
Note.—By way of "Then and Now" contrast, the income account of the Pennsylvania Railroad Company for the year ending June 30, 1909, from Interstate Commerce Commission Bulletin No. 5 is subjoined.
Revenues and Expenses of the Pennsylvania Railroad Company for the year ending June 30, 1909.
| Miles operated | 4,087 | |
| Operating revenues | $138,449,119 | |
| From Freight | $100,356,160 | |
| Passengers | 28,774,281 | |
| Other transportation | 8,438,972 | |
| Non-transportation | 879,706 | |
| Operating expenses | 97,107,751 | |
| For Maintenance of Way and structures | $16,503,246 | |
| Maintenance of equipment | 27,225,887 | |
| Traffic |
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