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Economics of the Stone Road

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ECONOMICS OF THE STONE ROAD. For a few remarks on the advantage of a permanently hard road surface, see § 265, which statements concerning gravel roads apply with equal force to stone roads.

There is a certain financial advantage in a crushed-stone road, but whether its construction will be true economy is a problem that can be solved, even approximately, only for each individual case. The solution of the problem requires the correct determina tion of the following items: the cost of construction of the new road, the cost of maintenance for the old road and also for the new, the cost of transportation on the old and the new road, the amount of traffic both before and after the improvement, and the rate of interest. To illustrate the method of using such data, an example will be assumed.

It is assumed (1) that the cost of construction is $5,000.00 per mile; (2) that the annual interest is 5 per cent; (3) that the annual traffic is 5,000 tons in full loads; (4) that the average cost of main tenance of the present earth road is $40.00 per annum; (5) that the annual cost of maintaining the proposed stone road is $200.00 per annum; (6) that the cost of transportation in full loads on the present earth road is 15 cents per ton mile; (7) that the cost of transportation on the proposed stone road is 5 cents per ton mile. The account would then stand about as follows: The annual cost of a mile of the stone road is equal to the interest on $5,000 at 5 per cent or $250 plus the difference in cost of maintenance ($200 $40) = $160; and the total cost is $250 + $160 = $410. The annual saving by the stone road is 10 cents per ton mile on 5,000 tons, or $500 per annum. This example shows a saving of $90 (= $500 — $410) per annum per mile by the construction of the stone road. In connection with the above computation the following limiting conditions should be remembered: 1. The cost of the stone surface will depend upon the locality, the width of the road, and the character of the construction. Con siderable expense may be required to reduce the grades; for unless the grades of stone roads are light, the cost of transportation is not much less than that on an earth road. The cost of construction should include the cost of building new bridges or of strengthening old ones, to permit the passage of the heavier loads incident to the economic use of the stone road.

2. Five per cent interest is too small for some localities, but. is too great for many communities; and it may reasonably be assumed that in the future interest rates will gradually decrease. The lower the interest the better the opportunity to secure im proved roads. If the road is to be financially profitable, the orig inal cost must be considered a business investment which will pay dividends.

3. In considering the financial value of the proposed improve ment, only full loads should be included in computing the saving in cost of transportation; but in any probable case there will also. be a miscellaneous traffic which will be benefited by the better road. The benefit to any but full loads will be chiefly in the saving of time; but the value of this saving can not be computed, since it will depend upon the value of small fractions of time for other purposes.

4. The cost of maintenance of the present earth road and also of the proposed stone one should include the periodic repairs or renewals of bridges and culverts.

5. The cost of maintenance of the stone road should include not only the cost of petty repairs during the first few years of the life of the road, but also the cost of periodically renewing the surface. The cost of maintenance will vary with the climatic con ditions, the nature of the soil, the character of the road material, the amount of traffic, the price of labor, etc.

6. The cost of transportation on either the earth or the stone road depends upon whether it is done by a freighter or a farmer (see § 4-7), and also upon the climate, the nature of the soil, the grades, etc.

7. If the hauling is done upon wagons used chiefly in genera) farm work or upon earth roads, the capacity of the wagon will limit.

the load, and hence the full economic advantage of the hard road surface can not be secured.

Further, there is some financial advantage in being able to use the roads at any season of the year, but such an advantage can not be computed for a general case nor usually in a particular case. Finally, there is a social advantage in permanently good roads (see 1) that should not be overlooked in considering any pro posed road improvement.