is the interest charged. Against that there is the ten year use of the one hundred miles, and engineering investigations now under way indicate that the difference in operating costs of transport alone over the good road as against the bad would be sufficient to defray the interest charges many times over, even if we discarded the social benefits which inure. WHO SHALL PAY? Thus far we have discussed as beneficiaries only two general classes, this generation and those that follow. If the highway bond issue plan is to be carried out, however, we must set up the conditions under which these bonds will be issued, and in order to do so we should determine more specifically the question of beneficiaries in order that, in setting up our source of revenue, we shall be as equitable as possible. At once a new set of questions presents itself for examination. What is the effect of highway improvement upon agricultural valuations? What is the effect of highway improvement upon urban valuations? What is the effect of highway improvement upon the operating costs of the user, the agent of the public? The answers will vary according to the typographical conditions, economic conditions, the extent and character of the traffic. Each state will have to meet this situation as its own needs demand and these needs can only be finally determined by specific inquiry and investigation upon a very broad scale. There are few to-day, however, who will deny the influence of highway development upon the farmer. The truck gardener, the dairy products man, and even the producer of heavy staples, has found his markets favorably affected by highway improvement. Perhaps more important, the educational and social advantages derived from highway extension have opened a new vista to all. Likewise, the development of urban properties and particularly of suburban properties has been perceptibly affected. No one who drives a motor vehicle or a horse will question the beneficial effect of highway improve ments. How far the use of large units made possible by road improvement has affected the economics of all three groups mentioned, is a point which few can discuss fully yet, particularly with regard to road improvement costs, but here again there is a definite problem to be worked out. So that while the relative amounts may differ, it seems that any fair plan for construction should be based upon general taxes for construction purposes, since all classes are enumerated in the three broad divisions mentioned. When maintenance is considered, however, a different answer presents itself. The damage to the wearing surface is done by traffic. Traffic benefits first by maintenance in lowered operating costs, so traffic should be expected to meet this levy. Yet at once the question arises as to what is maintenance? Shall we say that a manufacturer building a new plant or installing new machinery to take care of increased business, should consider that an item of current expense? Could the farmer or business man who attempted to assess such costs against his crop or output in a single year, expect the buyer to pay it cheerfully? Likewise would the extension of a highway or of widening be an item in maintenance or construction? There seems to be a close parallel in these two instances and undoubtedly where cases of this kind occur, ordinary business practice will prevail. The same problem presents itself when a road is lifted from a low to a higher type to the extent of the difference in cost. REGULATION MUST BE FLEXIBLE Another consideration which must be made a matter for thorough study is found in regulation of traffic on the highways. The whole question of finance is tied up in this point, because, after all, the only justification for any highway improvement, as I have already noted, is the service which the highway renders and that service should be permitted to grow without restraint as long as it is sound economically. If we restrict traffic unwisely, maintenance costs may be less, but transport operating costs may be swelled out of all propor tion, and since the public pays the bill in any case, we should seek to make highway transport in its entirety function at the lowest possible cost. Here we can suggest a prolific field for investigation. Overloading apparently damages both road and vehicle. Seasonal limitations appear to be necessary under certain conditions, and still with a railroad congestion such as obtains to-day, which is of the greater public moment-the maintenance of a low grade highway surface, or its destruction by goods which must be moved? There should be definite restrictions on maximum loads, of course, at least until the highway builder can catch up with the highway user-a goal still far in the future-but it is not necessary to consider that phase in detail now. I only wish to point out that unwise regulation, just as abuse of the road by the user, may operate to the detriment of the public interest, and therefore both should be carefully guarded against, particularly where we are concerned with the general aspects of a broad financial program predicated upon the need for traffic development. SUGGESTED FINANCIAL POLICY Summing up the points made, then, I would like to suggest that out of the questions presented for your analysis we have indicated the need for a very definite policy of highway finance. Personally, I should say that subject to varying conditions of highway development, of valuations, population and traffic in the several states, the program resolves itself into this: FIRST: The preparation of a "construction budget" by every state, estimating the cost of the primary and secondary roads to be built, year by year, for the next ten years. SECOND: That based upon the stage of development of that program at this time, the cost of construction-all or partshall be met by bond issues, except in those states where the construction program is practically complete. THIRD: That a budget of current operating costs be set up to defray-interest on bonds, amortization charges, and main tenance. The amount necessary to pay interest and amortization should be included in the general tax levy. The cost of maintenance should be assessed against the user. FOURTH: That all expenditures should be under the control of the state highway departments. FIFTH: That regulatory powers should be as flexible as possible and lodged only within the state highway department, to be administered in accordance with the needs of the public. SOUND BOND METHODS As a summary for consideration where state highway bond issues are necessary, I suggest that: FIRST: Bond issues should be serial in form and issued for as long a period as fifty years. The fund should be expended under rigid engineering control, and provision must be made for sufficient current income to pay interest, amortization charges and adequate maintenance. SECOND: Interest on bonds and amortization should be paid for from general taxation. Maintenance costs should be charged against traffic. THIRD: Maintenance shall include all charges up to and including reconstruction, save extensions or added replacement costs where an inferior is replaced by a superior type of surface. FOURTH Only that type of road shall be constructed which is adequate for the needs of present and future traffic. This shall be determined by careful surveys both of traffic and of economic possibilities. In conclusion, may I express the opinion of a business man that, after all, this question is a business problem-that, if you please, of manufacturing transportation. It must be dealt with from that viewpoint alone, if the interests of the public are to be conserved. ANDREW CARNEGIE THE COMMON INTEREST OF LABOR AND CAPITAL 1 The career of Andrew Carnegie is one of the most extraordinary in our history. He was born in Dunfermline, Scotland, in 1835. He came with his family to the United States when a boy of thirteen and went to work as a weaver's assistant in a cotton factory in Allegheny, Pa. Mr. Carnegie in his later life was proud to relate the story of thrift and industry which led to his final success. He learned telegraphy, entered the employ of the Pennsylvania R. R. and became telegraph operator, advancing until he became superintendent of a division of the Pennsylvania system. During the Civil War he served as superintendent of military railways and government telegraph lines in the East. Before this he had laid the basis of his fortune through the organization of the Woodruff Sleeping Car Co. After the war he developed iron works of various kinds and introduced into this country the Bessemer process of making steel. He became principal owner of the Homestead and Edgar Thomson Steel Works and later of the Carnegie Steel Company which in 1901 was merged in the United States Steel Corporation when Mr. Carnegie retired from business. He was then probably the richest man in the world, and he had already begun his long series of philanthropies. His enormous fortune was distributed in princely benefactions. He gave over two thousand libraries to towns and cities in the United States and Great Britain. He established the Carnegie Institute in Pittsburg, the Carnegie Institution in Washington, the Carnegie Foundation for pensioning teachers, gave large sums to Scotch Universities and to many other organizations and causes. At his death the remainder of his fortune was put into a trust to aid further in support of the foundations which he had already established and of other charities. Mr. Carnegie was the author of many books and a speaker on many 'Reprinted from the The Empire of Business by special permission of Mrs. Carnegie. |