Social economists and railroad capitalists are apt to consider the desirability of constructing the railroad from two different points of view. The social economist considers chiefly the effect of the road in building up the wealth of the community through which it passes. The railroad capitalist looks on the whole project as a business enterprise and as a project for making money. It may readily be demonstrated that in the long run the two objects are really identical and require identical methods to arrive at the result. Of course there are cases where a railroad enterprise has been launched for the purpose of blackmailirg another competing line, and there are likewise many cases where the promoters intend to unload their securities at the first favorable opportunity, and have no thought of the future history of the road or the ultimate value of its securities. Disregarding such methods, which may be characterized as gigantic swindles, we may consider that the normal project of constructing a railroad consists in developing a transportation agency which will not only increase the wealth of the country, but which will itself derive profit from the increasing wealth of the country, and that the wealth of each will increase the wealth of the other almost without definite limit. The prosperity of the railroad project and of the country through which it passes will be mutually dependent. We may therefore disregard at the outset the idea that any policy of construction or management which would be beneficial to the road will be injurious to the community. Of course it may readily happen, and instances are numerous, especially with roads of considerable length, that the cities and industries of one section of the road will be built up at the expense of those of another, and that the policy which is really the most advantageous for the railroad as a whole may be injurious to the interests of a small section of the country through which it passes. Even here, we should not forget that the railroad has lost something, although it may have gained more. It has lost a portion of traffic which it might have obtained by the building-up of the section which has been slighted and perhaps really injured.

The organization of a railroad always begins essentially with the idea that a road built through a certain stretch of country will be a paying investment. It also proceeds on the basis, which is often not realized, that it should and will be a paying investment to the original promoters. It is unfortunately true that but few railroads which are old enough to have had a history have escaped a receivership, or at least serious financial difficulties, at some time in their history. Nevertheless, the fundamental idea of the enterprise is that it shall be financially profitable to the promoters of the road.