Railroads are Big

It's not immediately apparent how big a railroad is. Try to pick up a piece of rail and you start to get the picture. But the real bigness of the railroad lies in the right of way and the structures, much of it critically important to transport by rail, and won hardly over a century of struggle.

Taken all together, it's quite an investment- in fact, it's too much investment to ever pay a competitive return. And, with a few exceptions, this has been the case for the entire history of railroading. Each road built on the bankrupt wreck of two or three or even sometimes a dozen failed progenitors, and each in turn destined to fail.

The simple fact is that the investment is too large to pay over 5% on investment in a nation where 6% is the ante. Other nations have dealt with this by constructing state railways, by constructing the railway and leasing it to a private company to run, or by nationalizing formerly private roads.

It would take some mighty fancy economics to determine the ins-and-outs of societal and railroad finance. With practice this science will improve , but in the meantime we'll experiment and learn from others. At least we've learned that healthy railroads, competing in the capital markets for private investment, with dividends over 5%, ain't gonna happen.

They're just too darn big.