Re: Monorail. Monorail! Monoraaaail!

On Sat, 18 Feb 2006 13:25:19 -0800, David Friedman <ddfr@xxxxxxxxxxxxxxxxxxxxxxxxx> wrote:
In article <slrndveerj.glr.dmsilev@xxxxxxxxxxxxx>,
Daniel Silevitch <dmsilev@xxxxxxxxxxxx> wrote:

On Fri, 17 Feb 2006 20:08:14 -0800, David Friedman
<ddfr@xxxxxxxxxxxxxxxxxxxxxxxxx> wrote:
In article <slrndvcd89.f0e.dmsilev@xxxxxxxxxxxxxxxxxxxx>,
Daniel Silevitch <dmsilev@xxxxxxxxxxxx> wrote:

Let me rephrase: If the government had told the UP and CP railroads "You
can buy right-of-way and ajdoining land from us at (low) market
prices.[1] Good luck", that would have been a subsidy-free process.
Instead, government land and money were given to the two companies to
provide the incentive to build the line; these monies for a while formed
the majority of the revenue of the roads. I would call that a subsidy.

Interesting question. My guess is that if the government had offered to
let the railroads buy as much land as they wanted at the per acre price
the land would command if there were no railroad, the railroads could
have done better than they actually did--by buying up all of the land
along the route of way at a very low price, and then reselling it at a
high price once the line went in.

But the obstacle to that plan is that the railroads would need enough
financing to both buy the land (fairly cheap) and build rails through
the middle of nowhere (not cheap). Absent government money, neither the
CP nor the UP could have operated during the construction phase. So,
absent the government, the transcontinental would have to wait until a
big enough company, or a company backed by a big enough bank, would take
on the job. It would be a good investment _if_ enough money to complete
the line was available. If not, it would be about as valuable as shares
in the French Panama Canal company.

My impression is that, in the 19th century, private investors were able,
given the incentive, to put together quite large amounts of money. I
seem to remember reading that the original (pre-automobile) Pennsylvania
Turnpike was a private enterprise, in part because the government
couldn't raise capital on the needed scale.

And I gather the Suez Canal was done by a private company, although of
course with cooperation from the relevant governments.

Suez is a good counter-example. I don't know its history in enough
detail to comment usefully on how the funds were raised, but it was a
publically traded company. On the other hand, one of the things that
crippled the same people in Panama was insufficient money. After the
original funds from the IPO ran low, they had to try to raise funds on
progressively worse and worse terms until the whole shell collapsed.

An alternate timeline where deLesseps et al. either got more cash from
the outset or were bailed out by the French government would be another
interesting application for a cross-time viewer. My guess: They still
fail, but it takes longer and they come a bit closer to the goal.[1]

But I don't know how one could check that.

Reboot the world to 1860?

That's the first step. Then you have to persuade the government to make
the alternative offer.

Alternatively, just obtain a trans-timeline viewer, and look for a line
where it was done that way. The potential value of that approach for
social science research is surely obvious.

I'll get right on that, just as soon as I build all the equipment that
the experimental cosmologists have been asking for.

-dms

[1] If we replace the upper management with people a bit more
reality-grounded than deLesseps, they have a chance. It took many years
to convince deL that a sea level canal ala Suez was a Bad Idea in
Panama. By that point, much money and many lives had been pissed away.
.

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