fc-.y i/JL’V.'.'.i- *. -,?r- -.j s V-*- Established by Railways of the United States for the Scientific Study of Transportation Problems mm logan g. McPherson FRANK HAIGH DIXON CHIEF STATISTICIAN Comparison of Capital Yalues- Agriculture, Manufactures, and the Railways mm IB >K S • >: Bulletin No. 39 WASHINGTON, D. C. 1912 — BULLETINS OF THE BUREAU OF RAILWAY ECONOMICS 1. Summary of Revenues and Expenses of Steam Roads in the United States for July, 1910. (Monthly Report Series, Bulletin No. 1.) 2. Summary of Revenues and Expenses of Steam Roads in the United States for August, 1910. (Monthly Report Series, Bulletin No. 2.) 3. Summary of Revenues and Expenses of Steam Roads in the United States for September, 1910. (Monthly Report Series, Bulletin No. 3.) 4. A Comparative Statement of Physical Valuation and Capitali- zation. 5. Preliminary Bulletin for November, 1910 — Revenues and Ex- penses. 6. Railway Traffic Statistics, 1900-1909. (See No. 31.) 7. Summary of Revenues and Expenses of Steam Roads in the United States for October, 1910. (Monthly Report Series, Bulletin No. 4.) 8. Summary of Revenues and Expenses of Steam Roads in the United States for November, 1910. (Monthly Report Series. Bulletin No. 5.) 9. Summary of Revenues and Expenses of Steam Roads in the United States for December, 1910. (Monthly Report Series, Bulletin No. 6.) 10. Summary of Revenues and Expenses of Steam Roads in the United States for January, 1911. 11. (Out of Print.) Summary of Revenues and Expenses of Steam Roads in the United States for February, 1911. Summary of Revenues and Expenses of Steam Roads in the United States for March, 1911. Summary of Revenues and Expenses of Steam Roads in the United States for April, 1911. The Conflict Between Federal and State Regulation of the Rail- ways. 12 13 14 ' 15 16. Summary of Revenues and Expenses of Steam Roads in the United States for May, 1911. ( Continued on third page of cover.) Comparison of Capital Yalues- Agriculture, Manufactures, and the Railways WASHINGTON, D. C. September, 1912 Digitized by the Internet Archive in 2016 https://archive.org/details/comparisonofcapi01asso CONTENTS. 3 13 °i. 5 2> [3 "Yvo . 3°/ / 0 ?' Os’ Page - - Summary 5 Introduction 7 National Wealth of the United States 10 Capital Values of the Agricultural, Manufacturing, and Railway Industries 12 Agricultural Capital by Geographical Divisions and States 17 Manufacturing Capital by Geographical Divisions and States 17 Capitalization by Interstate Commerce Commission Groups 24 Comparison of Capital in Railways and in the Principal Manu- facturing Industries 27 Return on Manufacturing and Railway Capital 28 Appendix Agriculture 32 Manufactures 33 Railways 35 Commercial Value of the Railways by Geographical Divisions and States 37 P 61 116 f „"rrrr«-^ SUMMARY. According to the estimates of the national wealth of the United States made by the Bureau of the Census the value of the railways increased but little more than half as fast as the value of all prop- erty from 1890 to 1904. The capital value of agriculture includes all farm property, land, buildings, implements, machinery, and live stock. The capital value of manufactures includes the value of property employed for the purposes of production, excepting rented property, but does not include any allowance for patent rights or good will. The capital value of the railways used in this comparison is the “cost of road and equipment” as it stands on their books. From 1900 to 1910 the capital value of agriculture increased from $20,439,901,164 to $40,991,449,090; the capital value of manufac- tures from $8,975,256,000 to $18,428,270,000; the cost of road and equipment of the railways from $10,263,313,400 to $14,387,816,099. The gross value of the products of manufacture increased from $11,406,927,000 in 1900 to $20,672,052,000 in 1910. The total oper- ating revenues of the railways increased from $1,487,044,814 to $2,750,667,435. Thus the increase of 81.2 per cent in the gross value of manufactured products was accompanied by an increase of 105.3 P er cent in manufacturing capital; while the increase of 85 per cent in the total operating revenues of the railways was ac- companied by an increase of only 40.2 per cent in their cost of road and equipment. The report of the Bureau of the Census for 1900 indicated that the gross capitalization of the industrial combinations then in exist- ence was more than twice as great as their capital value. The gross capitalization of the railways was about 12 per cent greater than the cost of road and equipment in 1900 and 28 per cent greater in 1910. The net capitalization of the railways, which is the amount for which they are responsible to the public, almost exactly coin- cided in 1910 with the cost of road and equipment. Because of the peculiar nature of the industry, it is impracticable to arrive at a satisfactory and comparable estimate of the net return on the capital in agriculture. The greater similarity of the manu- ( 5 ) P 6 1 1 1 6 6 facturing and railway industries permits estimates of the return on capital that in a broad and general way are comparable. Approxi- mately, the percentage of net return on the capital value of manu- factures in 1900 was 17.119 per cent and that on the cost of road and equipment of the railways 4.650 per cent. In 1910, when the capital value of manufactures had increased 105.3 P er cent, the per- centage of net return was 12.041 per cent, while on the cost of road and equipment of the railways, which had increased 40.2 per cent, the percentage of net return was 5.729 per cent. That is, in 1900 the percentage of net return on capital in manufactures was nearly four times as great as that on the cost of road and equipment of the railways; in 1910 it was over twice as great. In both cases the interest on capital is included in net return. While these comparisons are subject to qualification, it is not be- lieved that, were absolutely accurate and comparable data available, there would be any substantial change in the general conclusions. COMPARISON OF CAPITAL VALUES— AGRICULTURE, MANUFACTURES, AND THE RAILWAYS. Introduction. Agriculture, which includes the production of the food supply and in a measure that of the' raw material of manufacture; manufactur- ing, which is the transformation of raw material into a partly finished state, or into the finished product itself ; and transportation, which is the conveyance of materials and products, of passengers and the mails, are the principal industries of the United States, and in this country the most important factor in transportation is the railway system. It is of the first importance to know what are the amounts of capital invested respectively in agriculture, manufactures, and railways, and the amount and rate of return upon such capital. The impossibility, however, of ascertaining with absolute exactness the amount of the investments that have been made in these widespread and ramifying industries becomes apparent at the beginning of the inquiry, as does also the inability to make a precise distinction between the amount of investment and present capital value. This is especially true of a new and growing country like the United States, where values often have literally sprung from the ground almost without the investment of capital, and where natural increment has accounted in large part for the current value of land. Even so, the study of capital investment and return, carried out with care and a full appreciation of the diffi- culties involved, leads to significant results. First of all must be considered certain essential differences in the character of the capital of these respective industries. Although buildings, improvements such as fences, drains, etc., and appliances, such as implements and machinery, are indispensable for farm cultivation, the productivity of farm land in the United States depends in greater measure upon the fertility of the soil than upon the utilization of invested capital. As a growing population demands more and more of farm products, the value of farm land rises as the population increases, especially if it lies contiguous to populous centres. Although the use of continually improving methods of cultivation in- ( 7 ) 8 creases the production of a given area and gives it a greater earning capacity, the declining yield after years of tillage makes necessary the increasing use of fertilizer, and thus tends to offset the larger earn- ings. Clearly, the land itself is the largest factor in the value of a farm, and the owner does not bring about that increase in value due to the growth of population, which is commonly designated as the “un- earned increment.” Investment in a manufacturing plant includes the price paid for the land which forms the site, but the principal investment in the case of a plant of any magnitude is in the buildings and appliances in which and by means of which the processes of manufacture are carried on. In no small measure the return upon capital in manufacture depends upon efficient and economical methods, and upon skill in the designing and marketing of products for which there is demand. The value of the land may increase as other land in the vicinity becomes more val- uable, and to this extent the value of a manufacturing plant may be enhanced by unearned increment. The buildings and appliances, how- ever, tend to deteriorate as they are used, involving more rapid depre- ciation than is suffered by farm land because of tillage. With a railway, as with a manufacturing plant, the land is an indis- pensable factor, and its value also enhances by unearned increment unless it be considered that it is largely because of transportation serv- ice that the value of adjoining land is enhanced, and that therefore in a measure the rising value of railway real estate is a reflex of the service performed by the railways. With a railway, as with a manu- facturing enterprise, the principal investment is in the plant ; in the case of the railway it is in the roadbed, cars and locomotives, buildings, and appliances. With a railway, as with a manufacturing plant, the return upon capital depends in no small measure upon efficient and economical methods of operation, and also upon the vigor with which traffic is secured and developed ; and there is rapid depreciation. Therefore there is a greater similarity between the railway and manufacturing industries than between either of these and the agri- cultural industry. A respect in which the agricultural distinctly differs from the manufacturing or railway industry is in the comparatively slight extent to which establishment as a “going concern" affects the capital value of the farm as contrasted with the considerable value which establishment as a going concern attaches to a manufacturing plant or a railway. A farm may change the character of its product 9 or even lie fallow for a year or more without great deterioration in its capital value. This applies in far less degree to a manufacturing establishment, and it does not apply at all to a railway, which is obliged to continue in transportation service without cessation. The continu- ing organization necessary to such permanence as a going concern is alone a considerable factor in its value. Certain localities, and even particular farms, may gain a distinctive reputation for the production of certain grades of fruits, of vegeta- bles, of live stock, or even of grains which command preferential prices, but in the main the bulk of the products of agriculture are marketed without regard to the immediate locality or the particular farm whence they came. In the case of most manufacturing estab- lishments the distinctive reputation for a particular kind and grade of production is an asset of great value. So also with a railway company. While' a considerable share of the traffic of every railway is non-competitive, there are but few of the railway systems of the United States which are not dependent upon competitive traffic. In securing such traffic, and especially com- petitive passenger traffic, the reputation of a railway for efficient transportation is an asset of the highest value, and this reputation can only be gained through the development of an organization that must increase in efficiency. Value as a “going concern” is therefore no doubt of some impor- tance in the agricultural industry, but it is a prime factor in the aggre- gate value of a manufacturing establishment or of a railway. The amounts representing capital value used in this study, however, are the book values of the actual investment only, and contain no allowance for the value of patents, trade-marks, good will, or establishment as a going concern. This study of capital values in the agricultural, manufacturing, and railway industries has been prepared with a keen appreciation of the differences in the nature of the capital in those industries, as well as of other difficulties, already discussed, that are inherent in the com- parison of capital values. For the reasons that are set forth in the appendix this study has been limited in the case of the railways and of agriculture to the twenty-year period extending from 1890 to 1910, and in the case of manufactures to the ten-year period from 1900 to 1910. 10 National Wealth of the United States. Because of its significance in relation to this study there is here pre- sented a comparative statement of the national wealth of the United States in 1890, 1900, and 1904 as estimated by the Bureau of the Cen- sus. The Census Bureau does not purpose to extend this investigation in the near future to include a period later than 1904. Estimate of 'Wealth: United States 2 Subject 1890. 1900. 1904. Real property and improve- ments — taxed $35,711,209,108 $46,324,839,234 $ 55 , 5 K>. 22 S ,057 Real property and improve- ments — exempt 3 , 833 , 335,225 6,212,788,930 6,831,244,570 Farm implements and ma- chinery 494.247,467 749,775,970 844,989,863 Live stock 2,308,767,573* 3,306,473,278 4 , 073 , 791,736 Manufacturing machinery, tools and implements. . . . 3 . 058, 593 , 44 i c 2,541,046,639 3 , 297 , 754 ,i 8 o Gold and silver coin and bullion 1 . 158 , 774,948 1,677,379,825 1,998,603,303 Railroads and their equip- ment 8,296,050,034 9,035,732,000 1,576,197, 160 11,244,752,000 Street railways 389,357,289 2,219,966,000 Telegraphs 1 ( 211,650,000 227,400,000 Telephones y 701,755,712 \ 400,324,000 585,840,000 Shipping and canals J i 537,849,478 846 , 489 , 804 Pullman and private cars . . All other 9, 185,000,400 98 , 836 , 600 15,844,413,661 I 23 , OOO , OOO J 9 , 3 °o, 132,897 Total $65,137,091,197** $88,517,306,775 $107,104,192,410 a Special Report of the Census Bureau on Wealth, Debt, and Taxation. 1907. pp. 27-29. b This does not include the value of live stock in cities towns, and villages. The value of such live stock is included in the value of live stock for 1900 and 1904, amounting to about one- tenth of the total value. c Including product on hand, raw and manufactured. These items are partially covered under the heading “all other ’’ in 1900 and 1904. d This total exceeds the total given on page 29 oi the Census rerort by $100,000,000. The dis- crepancy is due to an error of addition in the original table prepared by the Census Bureau in 1S90. Inasmuch as the classification of items followed by the Census Bureau in preparing these estimates of national wealth varied some- what for the respective years, the rates of increase are not strictly comparable throughout. They suffice, however, for the purpose of a broad and general comparison. 11 Therefore it may be noted that the augmentation in the total esti- mated wealth of the United States between 1890 and 1904 was $41,967,101,213. This was an increase of 64.4 per cent, or nearly two- thirds, while the increase in the value of railroads and their equipment for the same period was $2,948,701,966, or 35.5 per cent. The rate of increase in the value of taxed real property and improvements from 1890 to 1904 was 55.4 per cent ; in the value of untaxed real property and improvements, 78.2 per cent; in the value of farm implements and machinery, 71.0 per cent, and in the value of street railways, in- cluding interurban railways operated by electricity, 470.2 per cent. It will be noted that the value of the railroads, as shown by these reports of the Census, increased from 1890 to 1904 but little more than half as fast as the value of all property, and that the rate of increase in the value of every other form of property for which comparable values are available was considerably greater than in that of the railways. 12 Capital Values of the Agricultural, Manufacturing, and Railway Industries. That the term “capital’’ as used in the reports of the Bureau of the Census on manufactures refers to the estimated or book value of the property employed in the business is made clear by the explanation of the term in the instructions to the Census enumerators. In 1910, for example, the instructions read as follows : “Capital invested. The purpose of this inquiry is to determine the value of property employed by the establishment for the purposes of its productive operation, but not including rented property. Patent rights and good will must not be considered as a part of the capital.” In its reports upon agriculture the Census Bureau uses the term “value of farm property” throughout, in preference to “capital” or “capital value.” The value of farm property is the value placed upon it by the owner thereof, modified or adjusted in accordance with preva- lent standard values. The Interstate Commerce Commission has not attempted either to compute or to estimate the value of American railway property, but in its annual reports has shown the gross capitalization, the net capital- ization, and the cost of road and equipment as reported by the rail- ways. By “gross capitalization” is meant the total par value of out- standing stocks and bonds. “Net capitalization” is gross capitaliza- tion less such part of it as is held by the railways themselves. In other words, net capitalization is the total par value of stocks and bonds owned and held by the general public ; that is, the amount of railway capitalization for which the railways are responsible to the public. Net capitalization stands therefore as a far better criterion of railway values than gross capitalization. The “cost of road and equip- ment” of the railways is the book value of road and equipment. No one of these three aggregates has exactly the same basis as the capital value reported for manufactures or the value of farm property re- ported for agriculture. As is pointed out in the following extracts from the statistical re- ports of the Interstate Commerce Commission, 0 the amount of “cost of road and equipment” of the railways is not a wholly satisfactory criterion of the value of railway property: “Statistics of Railways in the United States, 1888, pp. 5-6; 1890, pp. 97-98. 13 “Is it . possible to discover ‘the cost and value of the carrier’s prop- erty, franchises, and equipment?’ The papers giving evidence respecting these facts may have been destroyed, or in the fierce struggle of rival managements for control of territory by means of the absorption of lines already built the records of the original companies may have been lost, the consolidated companies caring nothing for records except such as proved their right to the property absorbed. But of greater significance is the fact that in many instances the books of rail- way corporations do not go beyond settlement with the construction companies. . . . Moreover, since the inception of the railway system in the United States, the changes in mechanical appliances and the constant fluctuation in the prices of railway supplies are so great that the cost of railway property, even though it could be taken from the books of a company, would be useless as showing the present value of the property.” Notwithstanding these qualifications, the amount of “cost of road and equipment'’ of the railways shown in the reports of the Inter- state Commerce Commission for 1890, 1900, and 1904 is so close to the value of railroads and their equipment as reported by the Bureau of the Census for the same years that it may be used as roughly approximating the tangible value of American railway property, and therefore may be taken as the aggregate more nearly analogous to the capital value of manufactures and the value of farm property as reported by the Bureau of the Census than the aggregates either of gross or of net capitalization. The close correspondence of the value of the railways as reported by the Census Bureau for the years 1890, 1900, and 1904 and as shown by the aggregate of their reports of “cost of road and equip- ment to the Interstate Commerce Commission for the same years is made clear in the following table. It will be perceived that the valua- tion for 1904 is indicated at an almost identical amount by the re- spective authorities. 0 Year. 1890 1900 1904 Estimate of Census Bureau. $8,296,050,000 9 , 035 , 732,000 11,244,852,000 Reports of the railways' to the Interstate Commerce Commission # 7 , 755 , 387,000 10 . 263. 313. 000 1 1. 5 1 1. 537. 000 0 It may be pointed out in this connection that the estimate made by the Census Bureau of railway valuation in 1904 was prepared under the supervision of joint officials of the Census Bureau and the Interstate Commerce Commission. This fact does not explain the close relationship between the cost of road and equip- ment of railways as returned to the Commission in 1904 and the valuation of rail- way property as computed by the Census Bureau for the same year. The former represents the value of railway property on the books of the railways them- selves; the latter is a wholly original computation of the commercial valuation of railway operating property, arrived at by capitalizing the average net earnings of individual railways and railway systems. The complete difference of method utilized in reaching the respective aggregates for 1904 makes their close corre- spondence both striking and significant. 14 The capital values of the agricultural, manufacturing, and railway industries in 1890, 1900, 1905, and 1910, except as noted, are given in the next table. 3 It must be borne in mind that the significance of these amounts is limited by the qualifications that have bee’n specified. As explained in the appendix, it is not possible to show manufacturing cap- ital for 1890 on a comparable basis with that of 1900, 1905, and 1910; returns for that year in the case of manufactures are therefore omitted. The reports of the Bureau of the Census are the source of the amounts for agriculture and manufactures; the reports of the Interstate Com- merce Commission for the items in regard to the railways. For the railways there are given cost of road and equipment, gross capitaliza- tion, and net capitalization. It will be perceived that in each case the cost of road and equipment exceeds the net capitalization, which is the amount of capitalization for which the railways are responsible to the public. The two amounts for 1910 are almost identical. Because of its correlative interest, the population of continental United States in each of the census years 1890, 1900, and 1910 is shown in the table. A census was not taken of either agriculture or the population in 1905. Capital Value of Agriculture, Manufactures axd Railways of the United States. 1890, 1900. 1905. Agriculture..,, 116,082,267,689 120,439,901,164 Manufactures .. 8,975,256,000 $12,675,581,000 Railways : Cost of road and equip- ment 7,755,387,381 10,263,313,400 11,951,348,949 Gross capitali- zation 9,437,343,420 11,491,034,960 13,805,258,121 Net capitaliza- tion * 7,126,673,041 8,803,156,067 9,940,853,945 Population 62,947,714 75,994,575 I9IO. $40,991,449,090 18,428,270,000 14,387,816,099 18,417,132,238 i 4 , 375 , 529 , 74 S 91,972,266 The relative importance of the three industries is indicated by this table. In 1910, for example, using round numbers, the aggregate value of American farm property, including real estate, implements and a In the tables of this study giving capital values the statistics presented tor agriculture in 1890 and 1900 relate to June 1, and in 1910 to April 15. The statistics for manufactures in each case refer as nearly as possible to January 1, and the statistics for the railways to June 30. b Up to 1906 the amounts representing net capitalization published by the Inter- state Commerce Commission were incomplete to the extent that they did not include income bonds, equipment trust obligations, and miscellaneous obliga- tions in the hands of the public. 15 machinery, and live stock, was reported at $41,000,000,000; the amount of capital invested in manufactures was reported as $18,500,000,000; while the total cost of road and equipment of the railways was re- ported as $14,400,000,000. 'I'he rates of increase in the capital values thus reported, and of the population, are shown in the following table : Percentage of Increase; in Capital Value. Agriculture 1900 over 1890. 27.I 1905 over 1900. 1910 over 1905. 1910 over 1900. IOO.5 Manufactures 41.2 45-4 105.3 Railways : Cost of road and equipment • 3 2 • 3 16.4 20.4 40.2 Gross capitalization . 21.8 20.1 33-4 60.3 Net capitalization • 23.5 I2.9 44.6 63-3 Population 20.7 21.0 For the ten-year period, 1900 to 1910, the rate of increase in the capital value of agricultural property was 100.5 per cent, the rate of increase of capital invested in manufactures 105.3 P er cent, and the rate of increase in the cost of road and equipment of the railways 40.2 per cent. Gross capitalization of the railways increased 60.3 per cent, and the net capitalization 63.3 per cent. The greater percentage of increase in capitalization than in cost of road and equipment was largely due to the fact that railways to a large extent have not written up on their books the values of their real properties as they increased, and that they have invested large amounts in their properties which they did not charge to property account. For the preceding decade, 1890 to 1900, the capital value of agriculture increased at the rate of 27.1 per cent, and the cost of road and equipment of the railways at the rate of 32.3 per cent. That is, during the earlier decade agricul- tural value increased in a somewhat lower ratio than railway invest- ment, while during the second decade the rate of increase was two and a half times as high for agriculture and over two and a half times as high for manufactures as for railways. The increases in the capital values of agriculture and of manufactures in this second decade were each more than 50 per cent greater than even the increase in the capi- talization of the railways. As an indication of the extent to which the capitalization of indus- tries, i. e., their outstanding stock and bond issues, exceeds their capital value as reported to the Census Bureau and embodied in this study the following comparison has been made by that Bureau of the two items for all the industrial combinations existent in the United States in 1900 : a Total capitalization authorized and outstanding $3,093,096,000 Total capital, as reported to the Census Bureau 1,461,632,000 Thus the capitalization of these combinations was more than twice as great in amount as the capital value, represented by land, buildings, machinery, tools, and implements, cash, bills receivable, etc. The gross capitalization of the railways was about 12 per cent greater than the cost of road and equipment in 1900, and 28 per cent greater in 1910. a See the report of the Census Bureau on manufactures, 1900, Part I, pp. LXXVIII-LXXIX. Agricultural Capital by Geographical Divisions and States. The value of agricultural property in the larger geographical di- visions of the United States and in the several States for 1890, 1900, and 1910, and the increase in value during these two decades, are given in the following Table No. 1. The amounts shown cover the value of farm land and buildings, but do not include farm implements and machinery and live stock. In other words, the table applies to real estate as distinguished from personal property. This Table No. 1 covers only land and buildings, the value of which is governed in large measure, as has been pointed out, by the general development of the community. For comparison with the increase in values of manufacturing and railway properties, the following Table No. 2 is presented, covering all farm property, including land and build- ings, implements and machinery, and live stock. Manufacturing Capital by Geographical Divisions and States. The amount of capital invested in manufactures in the larger geo- graphical divisions and in the several States is shown in the following Table No. 3 for the years 1900, 1905, and 1910, together with the rate of increase for each five-year period and for the decade as a whole. Table No. 1 . Value of Farm Land and Buildings (Reports of the Twelfth Census, 1900, Vol. v, pp. 696-7, Bulletin of Division or State. 1890. ^OO. Amount. Amount. The United States $13,279,252,649 $16,614,647,491 North Atlantic division 2,539,200,537 2,477,265,688 South Atlantic division 1,135-319,670 1,206,349,618 North Central division 7,069,767,154 9,563,880,438 South Central division 1,440,022,598 2,072,671,891 Western division 1,094,942,690 1,294,479,856 Alabama $111,051,390 $134,618,183 Arizona 7,222,230 13,682,960 Arkansas • 1 18,574,422 135,182,170 California 697,116,630 707,912,960 Colorado 85,035,180 106,344,035 Connecticut 95,000,595 97,425,068 Delaware 39,586,080 34,436,040 District of Columbia 6,471,120 11,273,990 Florida 72,745,180 40,799,838 Georgia 152,006,230 183,370,120 Idaho 17,431,580 42,318,183 Illinois 1,262,870,587 1,765,581,550 Indiana 754,789,110 841,735,340 Iowa 857,581,022 1,497,554,790 Kansas 559,726,046 643,652,770 Kentucky 346,339,360 382,004,890 Louisiana 85,381,270 141,130,610 Maine 98,567,730 96,502,150 Maryland 175,058,550 175,178,310 Massachusetts 127,538,284 158,019,290 Michigan 556,190,670 582,517,710 Minnesota 340,059,470 669,522,315 Mississippi 127,423,157 152,007,000 Missouri 625,858,361 843,979,213 Montana 25,512,340 62,026,090 Nebraska 402,358,913 577,660,020 Nevada 12,339,410 15 , 615,710 New Hampshire 66,162,600 70,124360 New Tersey 159,262,840 l62,S9I,OIO New Mexico 8,140,800 20,888,814 New York 968,127,286 888,134,180 North Carolina 183,977,010 194 , 655.920 North Dakota 75 , 310,305 198,780,700 Ohio 1,050,031,828 1,036,615,180 Oklahoma a 8,581,170 170,804,675 Oregon 115,819,200 132 , 337,514 Pennsylvania 922,240,233 898,272,750 Rhode Island 21,873,479 23.125,260 South Carolina 99,104.600 126,761,530 South Dakota 107.466.335 220 .I 33 .I 90 Tennessee 242,700,540 265,150,750 Texas 399,971,289 691 . 773,613 Utah 28,402,780 50.778,350 Vermont 80,427,490 83.07i.62O Virginia 254,490,600 271 . 378.200 Washington 83,461.660 Ii3.609.7iO West Virginia I S 1,880.300 168,293.670 Wisconsin 477.524.5O7 686.i47.660 Wyoming I4,460,880 26,965,530 0 Includes returns for Indian Territory in 1890 and 1900. (IS) by States : 1890, 1900, and 1910. the Thirteenth Census on Agriculture — United States, 1910, pp. 12-13.) 1900. 1910. Increase over 1890. Increase over 1900. Amount. Amount. Per cent. Amount. 1 Per cent. $3,335,394,842 25-1 $34,801,125,697 $18,186,478,206 109-5 d 61,934,849 d 2.4 3 , i6 i, 493,9 ii 684,228,223 27.6 71,029,948 6.3 2,486,436,474 1,280,086,856 106. 1 2,494,113,284 35-3 20,488,657,464 10,924,777,026 114.2 632,649.293 43-9 4,866,994,721 2,794,322,830 134-8 199,537,166 18.2 3,797,543,127 2,503,063,271 193-4 $23,566,793 21.2 $288,253,591 $153,635,408 114.1 6,460,730 89.5 47,285,310 33,602,350 245.6 16,607,74 j8 14.0 309,166,813 173,984,643 128.7 10,796,330 i-5 1,450,601,488 742,688,528 104.9 21,308,855 251 408,518,861 302,174,826 284. 1 2,424,473 2.6 138,319,221 40,894,153 42.0 d 5,150,040 d 13.0 53,155,983 18,719,943 54-4 4,802,870 74.2 8,231,343 d 3,042,647 d 27 .0 d 31 , 945,342 d 43-9 118,145,989 77, 346,151 189.6 31,363,890 20.6 479,204,332 295,834,212 161.3 24,886,603 142.8 245,065,825 202,747,642 479-1 502,710,963 39-8 3,522,792,570 1,757,211,020 99-5 86,946,230 H-5 1,594,275,596 752,540,256 89.4 639,973.768 74-6 3,257,379,400 1,759,824,610 II7-5 83,926,724 15.0 1,737,556,172 1.093,903,402 170.0 35,665,530 ■ 10.3 635,459,3 72 253,454,482 66.3 55,749.340 65-3 237,544,450 96,413,840 68.3 d 2,065,580 d 2 . l 159,619,626 63,117,476 65-4 119,760 0. 1 241,737,123 66,558,813 38.0 30,481,006 23.9 194,168,765 36,149,475 22.9 26,327,040 4.7 901,138,299 318,620,589 54-7 329,462,845 96.9 1,262,441,4 26 592,919,111 88.6 24,583,843 19-3 334,162,289 182,155,289 119.8 218,120,852 34-9 1,716,204,386 872,225,173 103.3 36,513,750 143- 1 251,625,930 189,599,840 305-7 175,301,107 43-6 1,813,346,935 1,235,686,915 213.9 3,276,300 26.6 39,609,339 23,993,629 153-7 3,961,760 6.0 85,916,061 15,791,701 22.5 3,328,170 2'. I 217,134,519 54,543,509 33-5 12,748,014 I56.6 111,830,999 90,942,185 435-4 d 79 , 993,106 d 8.3 1,184,745,829 296,611,649 33-4 10,678,910 5-8 456,624,607 261,968,687 134.6 123,470,395 163.9 822,656,744 623,876,044 31.3-9 d 13,416,648 d 1.3 1,654,152,40 6 617,537,226 59-6 162,223,505 1890.5 738,677,224 567,872,549 332.5 16,518,314 14-3 455.576,309 323,238,795 244-3 d 23 , 967,483 d 2.6 1,041,068,755 142,796,005 15-9 1,251,781 5-7 27,932,860 4,807,600 20.8 27,656,930 27.9 332,888,081 206,126,551 162.6 112,666,855 104.8 1,005,080,807 784,947.617 356.6 22,450,210 9-3 480,522,587 215,371.837 81 .2 291,802,324 73-0 1,843,208,395 1,151,434,782 166.4 22,375,570 78.8 117.545,332 66,766,982 I3I.5 2,644.130 3-3 112,588,275 29,516,655 35-5 17,087,600 6.7 532,058,062 260,479.862 95-9 32,148.050 38.5 571,968,457 456,358.7-17 394-7 16,415,370 10.8 264,390,954 96,095,284 57-1 208,623,153 43-7 1,201,632,723 515,485,063 75-1 12,504,650 86.5 07,915.277 70,949.747 263.1 d Decrease. ( 19 ) Table No. 2. Value of Farm Property (Including Land, (Reports of the Twelfth Census, 1900, Vol. v, pp. 694-5, Bulletin of Division or State. 1890. J$CO. Amount. A mount. The United States $16,082,267,689 $20,439,901,164 North Atlantic division 2,969,971,293 2,950,532,628 South Atlantic division 1.333,395489 1454,031,316 North Central division 8,517,696,731 11,504,919,848 South Central division 1,890,521,698 2,815,823,403 Western division 1,370,682,478 1,714.593,969 Alabama $146,339,765 $179,399,882 Arizona ; 20,646,263 29,993,847 Arkansas 155,019,702 181,416,001 California 777,381,767 796,527.955 Colorado 117,439,558 161,045,101 Connecticut 108,050,708 113,305,580 Delaware 45,620,460 40,697,654 District of Columbia 6,680,000 11,535,376 Florida 81,046,200 53,929,064 Georgia 189,249,198 228,374,637 Idaho 25.857,530 67,271,202 Illinois 1,477,759,187 2,004,316,897 Indiana 869,322,787 978,616,471 Iowa 1,100,682,579 1,834,345,546 Kansas 706,664,141 864,100,286 Kentucky 428,170,266 471,045,856 Louisiana 1 10,447,005 198,536,906 Maine 122,347,283 122,410,904 Maryland 200,792,960 204,645,407 Massachusetts 147,677.402 182,646,704 Michigan 047,938,255 690,355,734 Minnesota 414,701,626 788,684,642 Mississippi 167,328,457 204,221 027 Missouri 786,390,253 1,033,121,897 Montana 60,135,102 117,859,823 Nebraska 511,799,810 747,950,057 Nevada 18,678,710 28,673,835 New Hampshire 80,207,575 85,842,096 New Jersey 182,452,914 189,533,660 New Mexico 33,543,141 53,767,824 New York 1,139,310,716 1,069,723,895 North Carolina 216,707,500 233.834.693 North Dakota 100,745.779 255,266,751 Ohio 1.195,688,864 1,198.923.946 Oklahoma ( a ) 18.197,749 277,525.433 Oregon 143,024.800 172,761.287 Pennsylvania 1.062,939,846 1,051,629,173 Rhode Island 25,179,479 26.989.189 South Carolina 119,849,272 153.591,159 South Dakota 145.527.556 297.525,302 Tennessee 312,891,650 341,202,025 Texas 552,127,104 962,476,273 Utah 39,482,206 75,175,141 Vermont 101,805.370 108,451,427 Virginia 294,488,569 323.515.977 Washington 100,724,970 144,040,547 West Virginia 178,961.330 203.907.349 Wisconsin 560,475,894 8n.712.319 Wyoming 33,768,431 67.477,407 a Includes returns for Indian Territory in 1890 and 1900. ( 20) Buildings, Implements and Machinerv, and Live Stock) by States. the Thirteenth Census of Agriculture — United States, 1910, pp. 12-13.) 1900. 1910. Increase over 1890. Increase over 1500. Amount. Amount. Per cent. Amount Per cent. $4,357,633,475 27.I $40,991,449,090 $ 20 , 551 , 547,926 100.5 4 19,438,665 d -7 3,826,829,479 876,296,851 29.7 120,635,827 9.0 2,951,200,775 1 , 497 , 169,457 103.0 2,987,223,117 35-1 23,654,437,577 12,149,517,729 105.6 925,301,705 48.9 6,020,926,116 3 , 205 , 102,713 113-8 343,911,491 25-1 4,538,055,145 2,823,461,176 164.7 $33,060,117 22.6 $370,138,429 $ 190 , 738,547 106.3 9,347,584 45-3 75,123,970 45 , 130,123 150.5 26,396,299 17.0 400,089,303 218,673,302 120.5 19,146,188 2-5 1,614,694,584 818,166,629 102.7 43.605.543 37 -i 491,471,806 330 , 426,705 205.2 5,254.872 4-9 159,399,771 46,094,191 40.7 4 4,922,806 d 10.8 63,179,201 22,481,547 55-2 4,855,3 76 72.7 8,476,533 d 3 , 058,843 d 26.5 d 27,117,136 d 33-5 143,183,183 89 , 254 .H 9 165.5 39,125,439 20.7 580,546,381 352,171,744 154.2 41,413,672 160.2 305,317,185 238,045,983 353-9 526,557,710 35-6 3,905,321,075 1,901,004,178 94-8 109,293,684 12.6 1,809,135,238 830,518,767 84.9 733,662,967 66 .7 3,745,860,544 1 , 911 , 514,998 104.2 157,436,145 22.3 2,039,389,910 1,175,289,624 136.0 42,875,590 10. 0 773,797,880 302 , 752,024 64.3 88,089,901 79-8 301,220,988 102,684,082 5 i -7 63,621 b 199,271,998 76,861,094 62.8 3,852,447 1.9 286,167,028 8l,52I,62I 39-8 34,969,302 23-7 226,474,025 43 , 827,321 24.0 42,417,479 6.5 1,088,858,379 398 , 502,645 57-7 373,983,016 90.2 1,476,411,737 687 , 727,095 87.2 36,892,570 22.0 426,314,634 222 , 093,607 108.8 246,731,644 31-4 2,052,917,488 1 , 019 , 795,591 98.7 57,724,721 96.0 347,828,770 229,968,947 195 - 1 236,150,247 46. 1 2,079,818,64 7 1 , 331 , 868,590 178.1 9,995,125 53-5 60,399,365 31 , 725,530 no. 6 5,634,521 7.0 103,704,196 17,862,100 20.8 7,080,746 3-9 254,832,665 65 , 299,005 34-5 20,224683 60.3 159,447,990 105,680,166 196.6 d 69,586,821 d 6.1 1,451,481,495 381,757,600 35-7 17,127,193 7-9 537,716,210 303 , 881,517 130.0 154,520,972 153-4 974,814,205 719 , 547,454 281.9 3,235,082 ■ 3 1,902,694,589 703 , 770,643 58.7 259,327,684 1425 . 1 918,198,882 640 , 673,449 230.9 29,736,487 20.8 528,243,782 355482,495 205.8 d 11,310,673 d 1. 1 1,253,274,862 201,645,689 19.2 1,809,710 7.2 32,990,739 6,001,550 22.2 33 , 741,887 28.2 392,128,314 238,537455 155-3 151,997,746 104.4 1,166,096,980 868,571,678 291.9 28,310,375 9.0 612,520,836 27I,3l8,8lI 79-5 410,349,169 74-3 2,218,645,164 1,256,168,891 130.5 35 , 692,935 90.4 150,795,201 75,620,060 100.6 6,646,057 6.5 145,399,728 36,948,301 34-1 29,027,408 9-9 625,065,383 301,549,406 93-2 43 , 315,577 43-0 637,543,411 493 , 502,864 342.6 24,946,019 13-9 314,738.540 110,831,191 54-4 251,236,425 44.8 1,413,118,785 601,406,466 74-1 33 , 708,976 998 167,189,081 99 , 711,674 147.8 b Less than one-tenth of one per cent. d Decrease. ( 21 ) Table No. 3 . Capital Invested in Manufactures, (From 13th Census Bulletin on Manufactures — U. S., Table IT, pp. 85-87 ; includes Total capital, 1905. Division or State. Total capital, 1900. Amount. Increase over 1900. Amount. Per ctut The United States $8,975,256,000 $12,675,581,000 $3,700,325,000 41.2 North Atlantic division 4,958,249,000 6,613,352,000 1,655,103,000 33-4 South Atlantic division. 583,328,000 930,420,000 347,092,000 59-5 North Central division. 2,633,570,000 3 , 7 53,350,000 1,119,780,000 42-5 South Central division. 427,983,000 734,267,000 306,284,000 71.6 Western division 372,126,000 644,192,000 272,066,000 73-1 Alabama $60,166,000 $105,383,000 $45,217,000 75-2 Arizona 9,517,000 14,396,000 4,879,000 51.3 Arkansas 25,385,000 46,306,000 20,921,000 82.4 California 175,468,000 282,647,000 107,179,000 61. 1 Colorado 58,173,000 107,664,000 49,491,000 85.1 Connecticut 299,207,000 373, 283,000 74,076,000 24.8 Delaware 38,791,000 50,926,000 12,135,000 31-3 District of Columbia 17,961,000 20,200,000 2,239,000 12.5 Florida 25,682,000 32,972,000 7,290,000 28.4 Georgia 79,303,000 135,211,000 55,908,000 70.5 Idaho 2,130,000 9,689,000 7 , 559 , 000 354-9 Illinois 732,830,000 975,845,000 243,015,000 33-2 Indiana 219,321,000 312,071,000 92,750,000 42.3 Iowa 85,668,000 111,428.000 25,760,000 30.1 Kansas 59,458,000 88,680,000 29,222,000 49 - 1 Kentucky 87,996,000 147,282,000 59,286,000 67.4 Louisiana 100,875,000 150,811,000 49,936,000 49-5 Maine 1 14,008,000 143,708,000 29,700,000 26. 1 Maryland 149,155,000 201,878,000 52,723,000 35-3 Massachusetts 781,868,000 965,949,000 184,081,000 23-5 Michigan 246,996,000 337,894,000 90,898,000 36.8 Minnesota 133,077,000 184,903,000 51,826,000 38.9 Mississippi 22,712,000 50,256,000 27,544.000 121.3 Missouri 223,781,000 379,369,000 155,588,000 69.5 Montana 38,225,000 52,590,000 14,365.000 37-6 Nebraska 65,906,000 80.235,000 14,329.000 21.7 Nevada 1,251,000 2.892,000 1,641,000 131.2 New Hampshire 92,146,000 109,495.000 17,349,000 18.8 New Jersey 477,301,000 715,060,000 237 . 759 .ooo 49.8 New Mexico 2,161,000 4,638.000 2,477,000 114.6 New York 1,523,503,000 2.031,460,000 507 , 957 .ooo 33-3 North Carolina 68,283,000 141,001,000 72,718,000 106.5 North Dakota 3,512,000 5,704.000 2,192,000 62.4 Ohio 570,909,000 856,989.000 286,080,000 50.1 Oklahoma 4,054,000 16,124,000 12.070,000 297.7 Oregon 28,359,000 44,023.000 15,664,000 55 - 2 Pennsylvania 1,449,815,000 1,995,837,000 546,022.000 37 • 7 Rhode Island 176,901,000 215,901,000 39,000,000 22.0 South Carolina 62,750,000 113,422,000 50,672,000 80. s South Dakota 6,051,000 7,585.000 1.534,000 25 -4 Tennessee 63,140,000 102,440,000 39,300.000 62.2 Texas. . . .' 63.655,000 115,665,000 52,010,000 81.7 Utah 13,219,000 26,004,000 12,785,000 96.7 Vermont 43,500.000 62,659.000 19.159.000 44-0 Virginia 92,300.000 147,989.000 55,689,000 60.3 Washington 41,575.000 96,953,000 55.378,000 133-2 West Virginia 49,103.000 86.821,000 37,718,000 76. S Wisconsin 286,061,000 412,647.000 126,586.000 44-3 Wyoming 2,048,000 2,696,000 648,000 31 .6 d Decrease. by States : 1900, 1905, and 1910. lands, buildings, machinery, tools, and implements, cash and sundries.) Total capital, 1910. Amount. Increase over 1905. Increase over 1900. Amount. Per cent. Amount. Per cent. $18,428,270,000 $5,752,689,000 45-4 $9,453,014,000 105-3 9,009,529,000 2,396,177,000 36.2 4,051,280,000 81.7 1,368,475,000 438,055,000 47-1 785,147,000 134-6 5,718,797,000 1,965,447,000 52.4 3,085,227,000 117.1 1,134,015,000 399,748,000 54-4 706,032,000 165.0 1,197,454,000 553,262,000 85-9 825,328,000 221 .8 $173,180,000 $67,797,000 64-3 $113,014,000 187.8 32,873,000 18,477,000 128.3 23,356,000 245-4 70,174,000 23,868,000 5i-5 44,789,000 176.4 537,134,000 254,487,000 90.0 361,666,000 206.1 162,668,000 55,004,000 5 1 ■ 1 104,495,000 179.6 517,546,000 144,263,000 38.6 218,359,000 73-0 60,906,000 9,980,000 19.6 22,115,000 57-0 30,553,000 10,353,000 5i-3 12,592,000 70.1 65,291,000 32,319,000 98.0 39,609,000 154-2 202,778,000 67,567,000 50.0 123,475,000 155-7 32,477,000 22,788,000 235-2 30,347,000 1,424.7 1,548,171,000 572,326,000 58.6 815,341,000 hi. 3 508,717,000 196,646,000 63.0 289,396,000 132.0 171,219,000 59,791,000 53-7 85.551,000 99-9 156,090,000 67,410,000 76.0 96,632,000 162.5 172,779,000 25,497.000 17-3 84,783.000 96.3 221,816,000 71,005,000 47-i 120,941,000 119.9 202,260,000 58,552,000 40.7 88,252,000 77-4 251,227,000 49,349,000 24.4 102,072,000 68.4 1,279,687,000 313,738,000 32.5 497,819,000 6 3-7 583,947,000 246,053,000 72.8 336,951,000 136.4 275,416,000 90,513,000 49.0 142,339,000 107.0 72, 393,000 22,137,000 44-0 49,681,000 218.7 444,343,000 64,974,000 17. 1 22 0,562,000 98.6 44,588,000 d 8,002,000 d 15.2 6,363,000 16.6 99,901,000 19,666,000 24-5 33,995,000 51.6 9,806,000 6,914,000 239.1 8,555,000 683.9 139,990,000 30,495,000 27.9 47,844,000 5i-9 977,172,000 262,112,000 36.7 499,871,000 104.7 7,743,000 3,105,000 66.9 5,582,000 258.3 2,779,497,000 748,037,000 36.8 1,255,994,000 82.4 217,185,000 76,184,000 54-0 148,902,000 218. 1 11,585,000 5,881,000 103. 1 8,073,000 229.9 1,300,733,000 443,744-000 51-8 729,824,000 127.8 38,873,000 22,749,000 141.1 34,819,000 858.9 89,082,000 45,059,000 102.4 60.723,000 214. 1 2,749,006,000 753,169,000 37-7 1,299,191,000 89.6 290,901,000 75,000,000 34-7 114,000,000 64.4 173,221,000 59,799,000 52-7 110,471,000 176.0 13,018,000 5,433,000 71.6 6,967,000 1 15 1 167,924,000 65,484,000 63-9 104,784,000 166.0 216,876,000 101,211,000 87-5 153,221,000 240.7 52,627,000 26,623,000 102.4 39408,000 298.1 73,470,000 10,811,000 17-3 29,970,000 68.9 216,392,000 68,403,000 46.2 124,092,000 134-4 222,261,000 125,308,000 129.2 180,686,000 434-6 150,922,000 64,101,000 73-8 101,819,000 207.4 605,657,000 193,010,000 46.8 319,596,000 in .7 6,195,000 3,499,000 129.8 4,147,000 202.5 24 Capital by Interstate Commerce Commission Groups. Statistics as to the cost of road and equipment of the railways are not available for the several States, nor for any geographical area less extensive than the United States as a whole. Statistics of the com- mercial value of the railways of each State were compiled by the Census Bureau in 1904, and will be found in the appendix to this study. The Interstate Commerce Commission publishes annually the gross capitalization of the railways for each of the ten territorial groups defined at the time it undertook the compilation of railway statistics. These groups are numbered consecutively and comprise respectively the areas indicated in the following map : The gross capitalization of the railways of each of these ten terri- torial groups was as follows in 1890, 1900, and 1910: Railway Gross Capitalization by Interstate Commerce Commission Groups. I. II. III. IV. V. VI. VII. VIII. IX X. 1890. $377,477,302 2,032,242,616 1,309,390,715 410,704,029 742,670,372 1 ,818,588,^65 443,136,450 1,047,274,401 372,982,285 882,876,385 1900. $472,329,210 2,337,374,067 1,490,997,662 631 ,863,020 903,681,993 2,024,541,064 560,763,313 1,395.350,723 511,034, 132 1,162,599.776 1910. $799,627, 536 3,543,053,383 2.414.370, 374 Q 6 O, I S3, 3SO 1,346,913, 136 3,102,203, 094 1,047,244,431 2.260.370, 943 808,905, 131 2,134.260, 830 Group. 25 To secure statistics of the amount of capital invested in manufac- tures and of the value of agricultural property that may be com- pared with these aggregates of gross railway capitalization by groups, it will be necessary to combine into corresponding groups the returns of agricultural and manufacturing values shown by States in the pre- ceding tables. While the group lines do not in every instance follow State boundaries, yet it will be possible to obtain a very close approxi- mation to the several groups by including the returns of any State, parts of which are in different groups, in the returns of the group in which lies the greater part of its area. The results of this approxima- tion are presented in the next two tables. The first gives the value of the farm property of each group in 1890, 1900, and 1910. This table covers farm property of all kinds, including land, buildings, imple- ments, machinery, and live stock. I. ir. ill. IV. v. VI. VII. VIII. IX.. X Value of Farm Property by Corresponding Groups. Group. 1890. 1585,267,817 2,637,796,896 ■J. 2,712,949,906 810,006,671 1,325,025,536 3,654,365,065 751,230,899 1,783,711,403 662,574,109 1,159,339,387 1900. 1639,645,900 2,567,765,165 2,867,896,151 914,849,178 1,473,172,491 5,694, 326, 155 1,230,812,589 2,517,208,71s 1,161,013,179 1,368,211,638 1910. $867,240,457 3,317,411,784 4,800,688,206 I , 869 , 648 , 447 2,906,501,343 11,515,526,346 3,760,933,478 5,902,067,389 2,519,866,152 3,531,565,488 The amounts of capital invested in the manufacturing industries of each group in 1900 and 1910 are shown in the following table : I II III IV V VI VII VIII IX X Capitae Invested. in Manufactures by Corresponding Groups. Group. 1900. $1,507,630,000 3,656,526,000 1,037,226,000 272,436,000 338,999,000 1,241,148,000 112,230,000 370,851,000 164,530,000 273,680,000 1910. $2,503,854,000 6.848.361 .000 2.393.397.000 757.720.000 854.345.000 2.612. 048 . 000 1 63 . 702 . 000 872.148.000 438.692.000 984 . 003 . 000 26 The following table gives the rates of increase of the capital amounts set forth in the three preceding tables : Percentage Rate oe Increase. Group. 1890 to 1900. 1900 to 1910. Agriculture. Railways. Agriculture. Manufactures. Railways. I 9-3 25- 1 35-6 66.1 693 II d 2 .7 15-0 29.2 87.3 51.6 Ill 5-7 13-9 67.4 130.7 61.9 IV 12. Q 53-8 104 4 178.1 52.0 V I 1.6 21.7 96.6 152.0 49.O VI 55.8 ir -3 102.2 110.5 53-2 VII 63.8 26.5 205.6 45-9 86.8 VIII 41. 1 33 2 134-5 1 . 35-2 62.0 IX 75-2 37-0 117.0 166.6 58.3 X 18.0 3 i -7 158.1 259-5 83.6 d Decrease. It will be borne in mind that these tables by groups give railway gross capitalization only. Neither net capitalization nor the cost of road and equipment are ascertainable for the respective groups. From 1890 to 1900 the gross capitalization of the railways increased in six of the ten groups at a higher ratio than the value of agricultural prop- erty. From 1900 to 1910, however, in all except Groups I, II, and III, where agriculture has not kept pace with other activities, the rate of increase in gross capitalization of the railways has been approximately one-half the rate of increase in the value of farm property. From 1900 to 1910 gross railway capitalization has increased in much lower ratio than the capital value of manufacturing, which is far less than the gross capitalization of the manufacturing industries. An exception is in Group I, and the only other exception in Group ATI, where the development of railways has been especially necessary to serve the agricultural industries. Comparison of Capital in Railways and in the Principal Manufacturing Industries. The following table compares railway capital with the capital in each of 21 principal manufacturing industries, and shows the respective rates of increase from 1900 to 1910: Increase, 1900. 1905. 19.0. T 9 oo° Ver Per cent. Railways : Gross capitalization. . . $11,491,035,000 $13,805,258,000 $18,417,132,000 60.3 Net capitalization .... 8,803,156,000 Cost of road and equip- ment 10,263,313,000 Agricultural implements 157,708,000 Roots and shoes 110,363,000 Bread and other bakery products So, 902, 000 Clothing (men’s) 140,191,000 Copper, tin, and sheet iron 49,679,000 Cotton goods 467,240,000 Electric machinery, ap- paratus and supplies. . S3, 660, 000 Flour and grist mill products 189,281,000 Foundry and machine shop products 790,741,000 Furniture and refrigera- tors 109,267,000 Gas, illumination and heating 567,001,000 Iron and steel, blast fur- naces 143,159,000 Iron and steel, rolling mills 430,232,000 Leather 173,977 000 Liquors, malt 413,767,000 Lumber and timber products 541,595,000 Paper and wood pulp. . . 167.508,000 Printing and publishing. 333,003,000 Slaughtering and meat packing 190,209,000 Tobacco manufactures. . 111,517,000 Woolen, worsted and felt goods, and wool hats . 265,730,000 9,940,854,000 I 4 , 375 , 53 o,ooo 633 11,951, 349. 000 196.741.000 136.802.000 14,387,816,000 256.281.000 222.324.000 40.2 62.5 101. 4 122.353.000 176.557.000 212.910.000 275.320.000 163.2 96.4 147.608.000 613.111.000 21 7. 532.000 822.238.000 337-9 76.0 174,066,000 267,844,000 220.2 265, ri7,ooo 349,152,000 84.5 1,034,135,000 1,514,332,000 91-5 158,986,000 227,134,000 107.9 725,035,000 9 i 5 , 537 ,ooo 61.5 236, 146,000 487,581,000 240.6 700.182.000 242.584.000 515.630.000 1,004,735,000 332.727.000 671.158.000 I 33 -5 91 . 2 62.2 733.708.000 277.444.000 432.854.000 1,176,675,000 409.348.000 588.346.000 H 7-3 144.4 76.7 240.419.000 323.982.000 383.249.000 245.660.000 101.5 120.3 314,081.000 43 °, 5 79 , 000 62.0 This table shows that from 1900 to 1910 the amount of capital Invested in the principal manufacturing industries of the United States increased at a higher rate than either the gross capitalization, the net capitalization, or the cost of road and equipment of the rail- ways. This higher rate of increase for the principal manufacturing" industries is shown by the fact that the aggregate combined capital of the twenty-one industries — which is far less than their gross capitaliza- tion — increased 99.6 per cent from 1900 to 1910, whereas the gross capitalization of the railways increased 60.3 per cent, the net capital- ization 63.3 per cent, and the cost of road and equipment but 40.2 per cent. Return on Manufacturing and Railway Capital. Even more difficult and uncertain than a comparison of the capital values of the agricultural, manufacturing, and railway industries is a comparison of the annual returns upon these capital values. Indeed, it has been found impracticable even to attempt an estimate of the returns from agriculture that would be suitable for such a comparison." In the case of manufactures and railways, however, the operating or running expenses and the taxes may be ascertained, and thus an ap- proximation may be had to the net returns on capital. In this manner, for the following tables the gross and net value of the products of the two industries have been computed upon as nearly a comparable basis as possible. The net return has been ascertained by deducting from the respective gross value of products in the case of manufactures, and from gross earnings in the case of the railways, all operating expenses, a The returns of gross value of agricultural products, as compiled by the Census Bureau in 1910, contain considerable duplications, due for the most part to the inclusion of both the value of all live stock products and the value of all crops. A large proportion of the crops being fed to the live stock, the value of live stock is thereby enhanced, and there occurs a duplication of value — the value of the crops so fed being included in the value of all crops and in the value of all live stock. The Census Bureau discusses this duplication in the following words : “The Census Bureau has made no attempt to ascertain the total net value of farm products for 1909, including both that of crops and that of animal products. To add the value of these two groups of products together involves extensive duplication, since large quantities of crops reported are fed to the animals on the farms. It is impossible to ascertain accurately the amount of such duplication, and the attempt to do so, which was made at the Twelfth Census, was not considered satisfactory in its results. Moreover the amount spent by farmers for animals purchased in 1909 has not been subtracted from the value of animals sold and slaughtered in 1909. The gross total of $8,498,311,413 for 1909 is not closely comparable with that reported for 1899, $4,739,118,752, because of differences in the method of reporting the value of live stock products.” In addition to the difficulties presented by this duplication, it is impossible to make a satisfactory estimate regarding the taxes paid on agricultural property, the value of the labor of farm proprietors and their families, the amount of certain minor expenditures, such as for twine, oil, etc., and the cost of depreciation on buildings, implements, and appliances. 29 including taxes. In each case, interest on capital is included in the net return . 0 Gross and Net Returns from Manufactures. 1900. Gross returns : Gross value of products. . . . 111,406,927,000 Expenses : b Cost of materials 6,575,851,000 Salaries and wages 2,389,132,000 Miscellaneous expenses, in- cluding taxes 905,442,000 i 9 ° 5 - 1 1 4, 793 >903, 000 8.500.208.000 3.184.884.000 1.453.168.000 1910. $20,672,052,000 12,141,791,000 4.365.613.000 1.945.676.000 Total $9,870,425,000 $13,138,260,000 $18,453,080,000 Net return $1,536,502,000 $1,655,643,000 $2,218,972,000 Gross and Net Returns from Railway Operation. 1890 1900 1905 1910 Total operating rev- enues $1,051,877,632 $1,487,044,814 $2,082,482,406 $2,750,667,435 Expenses : Total operating expenses, includ- ing wages 692,093,971 961,428,511 1390,602,152 1,822,630,433 Taxes 31,207,469 48,332,273 63,474,679 i o 3 , 795 , 7 oi Total $723,301,440 $1,009,760,784 $1,454,076,831 $1,926,426,134 Net return, including interest on capital $328,576,192 $477,284,030 $628,405,575 $824,241,301 a In the following discussion of net returns, the statistics of manufacturing products cover as nearly as possible the calendar year preceding the census year, while the statistics of railway operating returns apply to the fiscal year ending June 30 of the census year. Thus the product manufactured during the calendar year 1909 was that covered by the census of 1910, and is here discussed under the latter year; with the manufacturing returns for the calendar year 1909 are compared the railway returns for the fiscal year ending June 30, 1910. b It should be pointed out that the item “salaries and wages’’ does not include salaries paid to proprietors or firm members interested in non-corporate manu- facturing establishments. There were 273,265 of these proprietors and firm members in 1910 for whom no definite salaries were reported. The railways are virtually all owned by corporations, all employees from president down being paid a definite salary or wage. To some extent, therefore, the expenses shown for the manufacturing and railway industries are not comparable. On the other hand, non-corporate manufacturers produced in 1910 only one-fifth of the total value of products manufactured in that year, while the average size and im- portance of the individual non-corporate establishment was so small that the return to the proprietor or firm owner could not be differentiated between wage and profit. Depreciation of the road and equipment of railways is, under the accounting system prescribed by the Interstate Commerce Commission, provided for through the operating expense account. The practice of manufacturing establishments in regard to depreciation of plant is not uniform, but it may be supposed that prudent management will, in the long run, charge the cost of repairs and replace- ment (which may be said to stand for a depreciation account where no such definite account is maintained) to running expenses. 30 As has been specified in these pages, and especially in the appendix, there have been variations in the requirements of the Bureau of the Census at different times for ascertaining the capital value of manu- factures. Moreover, in computing such vast aggregates there is always the necessity for adjustments of one kind and another so that different persons may not always arrive at identically the same results in handling the intricate data. Indeed the same person may be obliged at one time to give consideration to various factors that bring about results varying from those of a similar adjustment at another time. Further- more, the income account here shown for manufactures differs from that of the railways in the fact that the reported railway returns repre- sent cash actually received, while the reported value of products manu- factured in any year is not only partially made up of cash already taken in, but is also in part an estimate of the probable market value of such portion of the product as is not yet sold, and in part consists of outstanding accounts the settlement of which may entail loss. In other words, the manufacturing returns are partially at least based on estimates. It therefore cannot be too strongly insisted that the tables and the deductions therefrom on the preceding pages are of broad and general significance only. It is believed, however, that possible varia- tions, to whatever cause they may be due, do not impair such broad and general significance. If it be necessary to bear in mind these qualifications as pertaining to the fundamental statements of capital values and of the return thereon, it will be all the more necessary to bear in mind the limita- tions that must govern any attempt at comparison of the relative re- turn on capital. Yet in this country the dollar is the common denomi- nator of values. The dollar measures the values of things utterly dissimilar. of all things which enter into purchase and sale. Dissim- ilar in many respects in their essential nature and in their relations as are the products of manufacture and the service of transportation, they are measured by dollars when they are sold, and the net return upon capital values is measured in dollars. It is the expression of these net returns in dollars that guides the investor in placing his money in one or another industry. In the table on page 14 were given, subject to the qualifications that repeatedly have been expressed in these pages, the capital values of manufacturing and the railways. On page 29, subject to the quali- fications that likewise repeatedly have been expressed, are tables giv- ing the gross and net returns from manufactures and from railway 31 transportation. It therefore may be possible in terms of the dollar to arrive at the ratio of the net returns on the capital of each industry and to compare the net returns on the capital of one industry with the net returns on capital in the other. In the next table are set forth the capital values of the two indus- tries, the return on capital as expressed in the preceding tables, and the percentage of that return. It will be perceived that the years for which there is available complete information that is approximately comparable for each industry are those designated as 1900 and 1910. These may be considered to mark the beginning and the end of a decade which comprised a fairly distinct industrial era. In 1900 the country was on the high tide of recovery from prolonged industrial depression ; in 1910 it was enjoying exceeding prosperity, both the gross and the net earnings of the railways attaining a higher mark than for any pre- ceding or subsequent year. It will be noted that in the case of the railways the percentage of net return is computed on the cost of road and equipment, which is the item comparable with the capital value of manufactures as given. Comparison or Net Returns on Capital. igoo. Manufactures : Capital $S , 975 , 256 , 000 Net return on capital . 1,536,502,000 Per cent of net return . 17.119 Railways : Cost of road and equip- ment $10,263,313,400 Net return 477,284,030 Per cent of net return . 4 650 i 9 ° 5 - $12,675,581,000 1,655,643,000 13.062 |n,95C348,949 628,405,575 5-258 I9IO. $ l8 , 428,270,000 2,218,972,000 12.041 $14,387,816,099 $24. 241 ,301 5.729 In 1900 the percentage of net return upon capital in manufactures was nearly four times as great as that on the cost of road and equip- ment of the railways. In 1905 it was two and one-half times as great. From 1900 to 1910 the capital in manufactures increased 105 per cent, and the cost of road and equipment of the railways increased 40.2 per cent. In the latter year the percentage of net return on capital in manufacture was two and one-tenth times as great as that of the railways. While these comparisons are subject to qualification, it is not be- lieved that were absolutely accurate and comparable data available there would be more than a negligible change in the relation of these ratios of return. 32 APPENDIX. A careful study of the census reports discloses that the variations specified below affect the comparability of the data as to the capital value of the agricultural and manufacturing industries as set forth by the Census Bureau even for 1890 and in subsequent reports. They demonstrate clearly that the data included in the reports prior to 1890 are entirely unavailable for comparative purposes. Agriculture. Census statistics extending back to 1850 show for each State the value of land and buildings employed in agriculture and the value of implements and machinery and live stock. The Census of Agriculture of i860 included all farms with an annual marketed product to the value of $100 or more. This mini- mum was changed in 1870 to farms containing three acres in area or marketing annually $500 of product, with the proviso that no farm be enumerated unless it utilize the labor of at least one able-bodied man. This limit for 1870 was retained in the enumerations of 1880 and 1890. but for that of 1900 it was modified to take in any farm not otherwise included, provided the operation of such a farm required the constant attention and services of one man. The census of 1870, although intended to cover the year ending June 1st, actually presented data relating in part to 1869 and in part to 1870. The same difficulty of securing returns all relating to the same specific year was met in 1880. The enhancement in the value of farm property shown by the re- turns of 1870 over those of i860 was in part due to the premium of .25 per cent on gold in 1870. Moreover, the returns for 1870 were regarded by the census au- thorities themselves as defective and incomplete. Many farms were omitted in the South, in Massachusetts, and elsewhere. There was the same difficulty in 1880, many farms and western ranges failing •of enumeration, although in some other respects the census of 1880 was the most nearly complete of any prior to 1900. It is pointed out in the census report for 1900 that the data as to •capital return for agriculture and for manufactures do not correspond. The only forms of agricultural capital reported by the census were land, buildings, improvements, implements, machinery, and live stock which correspond to fixed capital in manufacture. Live or free manu- facturing capital, such as cash and sundries, has its counterpart in agriculture in the items “value of farm products on hand,” money due from sale of products, or in bank for supplementary use on the farm, and value of growing crops, but as to the value of these items definite information was not obtained. The same qualifications as to the com- parability of agricultural and manufacturing capital values apply to the census returns for 1910. Manufactures The schedules for the earlier censuses of manufactures were changed from census to census, the data therefore not being com- parable. From the census of 1870 “many industries from which it was difficult to obtain satisfactory statistics” were omitted. Likewise in 1880 some manufactures were not included, and in lesser degree this was also the case in 1890. Twenty industries or branches of industries omitted in 1880 were included in 1890. The census report of 1870 admitted the returns for that year to be “entirely untrustworthy and delusive,” owing to the difficulty of secur- ing uniform or complete statements from industrial units. The re- port expresses the opinion that not over a fourth of the capital actually invested was returned. Moreover, all values reported in 1870 were expressed in terms of currency, which was then 25 per cent in excess of values in gold. The report of 1890 was elaborated to include under capital such items as borrowed cash, of which cognizance had not theretofore been taken, and allowance was made for rented capital, such as rented buildings. Not until the census of 1900 had there been used the same schedule as of the previous census. The schedule of 1890 was adopted for 1900, and substantially this same schedule was used in 1905 and 1910, but with changes in the definition of what constitutes a factory and in the classification of factories. The census of 1900 stated that returns of capital in manufactures prior to 1890 “have no real statistical value, owing to the vague and general character of the form of inquiry.” The statement that statistics as to manufactures for periods earlier than 1890 are practically useless for comparative purposes is repeated in the census for 1905. 34 Even as late as 1905 the census report emphatically declares that it is impossible to so define the word “capital” for statistical purposes as to make the thing measured tangible, restricted, and uniform. For the census of 1905 the definition of a factory was considerably restricted as compared with that of 1900 and earlier census years. A retabulation of the data for 1900 was made to accord with the classifi- cation of factories established for 1905, but this retabulation applied to the capital as a whole, not being carried out to include its component parts. It is therefore feasible to show only the total capital invested in manufactures by States on a comparable basis for 1900, 1905, and 1910. To a better understanding of the change in definition of a factory and classification of factories made by the Census Bureau in 1905 it is necessary briefly to consider the prior practice. From 1850 to 1890 the census law provided for a census of establishments “of productive industry.” The law authorizing the census of 1900 provided more specifically for a census of the “manufacturing and mechanical prod- ucts” of the country. These terms were broad enough to include all industry that could be reached by the census agents. In 1905 the law distinctly restricted the census of manufactures “to manufacturing establishments conducted under what is known as the factory system exclusive of the so-called neighborhood and mechanical industries.” This definition, which was also followed in 1910, restricted the in- quiries of the census agents to factory establishments with a product to the value of at least $500 a year. Neighborhood and local me- chanical industries were excluded, as well as manufacturing in edu- cational, eleemosynary, and penal institutions. The difference between the results obtained under the definition of a factory followed in 1900 and that which obtained in 1905 is shown in the following table, which shows the number of establish- ments, the capital, and the value of products returned and promul- gated by the census of 1900 and the returns of that census under the revision made in 1905 in order' that the returns might be comparable with those for the latter year : 1900, 1900. original. revised. 5I2 ? 254 $9,317. 434, 709 13,004,400.143 207,562 $3,978,825,200 11,411, 121, 122 Number of establishments Capital Value of products . Railways. There is no attempt in this study to settle the controverted question as to what properly constitutes the capital value of the railways. Gross capitalization, net capitalization, and the cost of road and equip- ment, the three capital items set forth in the reports of the Interstate Commerce Commission, have all been utilized, and it has been pointed out that cost of road and equipment is perhaps more nearly analogous to the capital values used for agriculture and for manufactures. A comparative study of railway investment extending back over any considerable period must rest on one or another of these items. Clearly it cannot rest on bases that have but recently entered into con- sideration. Thus studies of physical valuation and the theory of basing railway capitalization upon physical valuation are of com- paratively recent origin. “Cost of road and equipment” is an item that did not appear in official governmental reports until 1890, when it was embodied in the annual statistical report of the Interstate Com- merce Commission, but the term was used as early as 1863 by Samuel Hallett & Company, New York bankers, in a report on the resources of the United States. Data as to capitalization are available to a cer- tain extent for the period prior to 1890, but the earliest statistics that have been found deal with cost of construction of road, as distin- guished from cost of equipment. Thus David Stevenson, an English civil engineer, who discussed American engineering in 1837, cited the cost per mile of seven different pieces of railway lying in Maryland, Pennsylvania, New York, and South Carolina. The weighted average of these costs, which are given by him for an aggregate of 468.33 miles, is $19,009.50 per mile If this cost be assumed as applicable to all the railway mileage in the United States in that year, we have for a total of 1.652.25 miles, also cited by Stevenson, a cost of $31,408,000. F. Von Gerstner, in a German work published in 1843. estimated the railway mileage in the United States as 9,220.96 miles. For 8,488.46 miles of this he gives data as to cost which average S20.437 per mile. At this rate per mile the cost of all the railways in the United States at that time was about $188,448,000. The American Almanack for 1847, discussing the cost of 4,760.75 miles of railway in the United States, set the aggregate for 1845 at $129,177,000. Although admittedly incomplete both as to mileage and as to cost, the reduction of the aggregates to a per mile basis sheds 36 light on the cost of railway construction at that time. The average cost per mile was $27,138. Hinton R. Helper, in “The Impending Crisis,” estimated the mileage of American railways in 1857 at 24,714 miles. The aggregate cost of the railways was $633,566,000, but as this amount relates to 1855 and a somewhat different mileage than that of 1857, no average per mile can be computed. Henry H. Flint, writing in his “Railroads of the United States” of 1857, estimated the cost of the American railways existing in that year at $920,000,000. As this estimate covered 26,000 miles, their average cost per mile was not far from $35,400. Appleton’s Annual Cyclopedia estimated the cost of the railway mileage of the United States in 1868-9 at $1,517,500,000. Flint's esti- mate for 1868 is not far from this — $1,532,500,000. Poor’s Manual for 1868-9 gives a slightly higher amount, $1,600,000,000. This last estimate is based on the capital account which Mr. Poor remarked as considerably exceeding the money actually expended. The costs per mile based on these estimates appear to be as follows: Appleton. $41,- 022; Flint, $40,300; Poor, $41,000. President Hadley’s estimate of cost for January 1, 1884, was $7,320,000,000, while the Interstate Commerce Commission in its statistical report for 1890 returned the cost of road as $7,333,096,000. This was exclusive of cost of equipment It will be seen from this that statistics of cost of railway plant and equipment prior to 1890, when the Interstate Commerce Commission first presented complete official reports of such costs, are scattering, incomplete, and far from reliable. That is, they were based on in- dividual estimates and opinions which, however careful and intelli- gent, are not in the nature of things as accurate as official compila- tions. Even the amounts showing cost of road in the reports of the Interstate Commerce Commission are open to the criticism that the returns of individual railways from which they are compiled rest in part on the estimates and opinions of railway officials and not on written records. This criticism is especially applicable to the data published by the Commission in 1890, which embodies for the first time these reports of the railways, but it is applicable also in greater or less degree to subsequent data which are built upon the returns for 1890. 37 Commercial Value of the Railways by Geographical Divisions and States. The United States Census Bureau made a careful investigation in 1904 into the commercial value of the American railways, distributed according to States, and the result of its investigation is given in the following table. Commercial Value of Railway Operating Property by States: 1904. (Census Bureau Bulletin 21, 1905, page 8.) State. The United States North Atlantic Division South Atlantic Division North Central Division. South Central Division. Western Division Alabama Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Commercial value of railway operating property as of June 30, 1904. . . . $11,244,752,000 3.230.781.000 994.035.000 . . . 4,346,413,000 1.188.851.000 [,484,672,000 $150,211,000 68.356.000 124.626.000 350.694.000 198.261.000 105.369.000 17.285.000 5,578,000 80.467.000 156.603.000 91.877.000 805.057.000 375.541.000 344.847.000 356.356.000 155.772.000 123.401.000 80.146.000 132.342.000 250.052.000 277.597.000 466.734.000 107.884.000 309.768.000 196.209.000 263.170.000 43.745.000 79.786.000 313.568000 86.400.0co 898.222.000 n.3.146,000 123,390,090 Commercial Value of Railivay Operating Property by States: 1904 — Continued. state. Ohio Oklahoma Oregon Pennsylvania. . . Rhode Island.. South Carolina South Dakota.. Tennessee Texas Utah Vermont Virginia Washington West Virginia. Wisconsin Wyoming Commercial value of railway operating property as of June 30, 1904. 689.797.000 158.073.000 75,661 000 1,420,608,000 25.719.000 75.500.000 49.646.000 131.166.000 237.718.000 90.325.000 37.311.000 211.315.000 182.837.000 201.799.000 284.510.000 100.307.000 385 B952B no. 39 P61116 BULLETINS OF THE BUREAU OF RAILWAY ECONOMICS ( Continued .) 1 7. (Out of Print.) 18. Capitalization and Dividends of the Railways of Texas, Year Ending June 30, 1909. 19. Summary of Revenues and Expenses of Steam Roads in the United States for June, 1911. 20. Summary of Revenues and Expenses of Steam Roads in the United States for July, 1911. 21. The Cost of Transportation on the Erie Canal and by Rail. 22. Summary of Revenues and Expenses of Steam Roads in the United States for August, 1911. 23. Analysis of the Accident Statistics of the Interstate Commerce Commission for the Year Ending June 30, 1911. 24. Comparative Railway Statistics of the United States, the United Kingdom, France, and Germany. 25. Summary of Revenues and Expenses of Steam Roads in the United States for September, 1911. 26. Summary of Revenues and Expenses of Steam Roads in the United States for October, 1911. 27. Summary of Revenues and Expenses of Steam Roads in the United States for November, 1911. 28. Effect of Recent Wage Advances upon Railway Employees’ Com- pensation during the Year Ending June 30, 1911. Variations in the Number of Railway Employees, 1909-1910-1911. Relation of the Number of Employees and their Compensation to Traffic and Revenue, 1909-1910-1911. 29. Summary of Revenues and Expenses of Steam Roads in the United States for December, 1911. 30. Summary of Revenues and Expenses of Steam Roads in the United States for January, 1912. 31. Railway Traffic Statistics, 1900- 1910. 32. Summary of Revenues and Expenses of Steam Roads in the United States for February, 1912. 33. Summary of Revenues and Expenses of Steam Roads in the United States for March, 1912. ( Continued on fourth page of cover.) BULLETINS OF THE BUREAU OF RAILWAY ECONOMICS ( Continued .) 34. A Comparative Study of Railway Wages and the Cost of Living - in the United States, the United Kingdom, and the Principal Countries of Continental Europe. 35. Summary of Revenues and Expenses of Steam Roads in the United States for April, 1912. 36. Summary of Revenues and Expenses of Steam Roads in the United States for May, 1912. 37. Summary of Revenues and Expenses of Steam Roads in the United States for June, 1912. 38. Summary of Revenues and Expenses of Steam Roads in the United States for July, 1912. 39. Comparison of Capital Values — Agriculture, Manufactures, and the Railways. e • senj en jejtdea >o uost saiaaasn AiissaniNn aana 6E -ou a2S68 see shfiDShaota