Having decided on some estimate for the receipts per head of tributary population, even if it is only for a preliminary and rough estimate, the next step is to determine the number of the tributary population. A large map with a scale of say one mile to the inch is of considerable assistance in determining this. On this map, which may be one of the easily obtainable railroad maps or a set of maps such as are published by the U. S. Geological Survey, we may see the location of all existing railroads. The proposed road will probably pass to some extent through territory considered exclusively its own. If it passes through a valley, so that it is separated on either side by high hills from the valleys occupied by other railroad lines which are perhaps ten miles away, it may reasonably claim all of the population within the valley through which it passes. The population of this area may be determined with sufficient accuracy from census records or other sources. Where the road passes through towns which are already served by one or more lines, it is not right to consider that the entire population of that town will contribute per annum the average per-capita quota. In fact it would be more nearly true to say that the per-capita quota multiplied by the population of the town will be distributed among all the roads concerned in the relative proportion of their importance. Or, in other words, if we divide the population of the town into parts which are proportional to the relative importance of the roads, we may consider that the income from that town will equal that proportion of the total population multiplied by the average per-capita figure. By thus computing the tributary population for each section of the road we may multiply the sum total by the assumed per-capita figure and obtain a rough estimate of the gross receipts.

43. Estimate By Comparison With Other Roads

Still another method of estimating the gross revenue from operation is to obtain the figures of the gross revenue of an existing road which is operating under conditions which are similar to those of the proposed line. This might be done by saying that since the existing line has gross receipts of so much per mile, and since the proposed line will have very similar advantages, the receipts per mile of road should be substantially the same. Perhaps a still better method than the above-would be to estimate the tributary population of the existing road by the method indicated in the last section. An estimate should then be made of the population which would be tributary to the proposed line. Dividing the gross receipts of the existing line by its tributary population would give a fairly reliable estimate of per-capita receipts from such a community. Multiplying this figure by the tributary population of the proposed line would then give a fairly close estimate of its probable revenue. Probably the greatest danger underlying the above method comes from the inaccuracy of the assumption that the existing road and the proposed road will operate under similar conditions or that their tributary populations will have equal revenue-producing capacities. An experienced man may however use this method by making a suitable allowance when he considers that the proposed road will be more valuable or less valuable than the line with which it is compared. Even though this method is confessedly inaccurate and subject to error, it should generally be utilized, because it is nearly always possible to obtain sufficient data for the purpose with but little trouble, and the results obtained are a valuable check on the results which will be computed by the other methods.