This section is from the "The Economics Of Railroad Construction" book, by Walter Loring Webb, C.E.. Also see Amazon: The Economics Of Railroad Construction.

All of the remaining items, as stated in Table IX, are of no concern to the locating engineer. They are either general expenses, such as the salaries of general officers, insurance or law expenses, or are special items, such as advertising or the operation of marine equipment which will not be changed by any variations in distance, curvature, or grades which a locating engineer may make. There is therefore no need for their further discussion here.

It has already been shown that the cost of a train-mile is marvelously uniform on roads of varying character. The cost of running a train one mile has therefore been taken as the unit of value on which to base calculations as to the effect of changes in alinement. The general method is to take up each item in turn of the cost of operating trains, and to estimate the effect of a change in alinement on each item of expense. Some of the items are changed very materially. Others are practically unaffected. By careful study of the situation, it is usually possible to estimate with reasonable accuracy that each proposed change in alinement would affect each item by a certain percentage of the average value of that item. If we then multiply the normal percentage of each item by the total percentage by which the item is affected and add the products, we will have the percentage of the average cost of a train-mile which shows the effect of one mile of such change in alinement. If we multiply this percentage by the average cost of a train-mile, we will then have the cost for each train-mile operated of so much change in alinement. Multiplying that value by the number of trains run per day or per year, we will then have the daily or annual cost per mile of that change of alinement for that road. If, for example, we find that a certain change in alinement would make a saving of 24 c. for each train passing over the road, then the annual saving, if there were 3000 trains per year, would be $720. But an annual saving of $720 would justify the expenditure of $14,400 if interest were at 5%. If, therefore, the change can be made for an expenditure of about $14,000, it will probably be justified.

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