RAILROAD  BONDS  259

A  few  systems  are  now  paying  large  prices  for  terminal
facilities;1  an  outlay  which  might  have  been  at  least  somewhat
reduced,  had  their  managements  anticipated  the  future  devel-
opment of  the  systems.  If  a  subsidiary  terminal  is  owned  by
a  railroad  or  a  group  of  railroads,  the  payment  of  leases  is  of
relatively  small  concern,  but  if  the  rentals  are  paid  to  a  small
group  of  individuals,  who  own  the  subsidiary,  these  leases
may,  though  legitimate,  be  a  very  high  tax  upon  income.  In
order  to  obtain  a  correct  estimate,  the  long  period  in  which
this  property  has  been  held  until  its  present  value  has  been
reached,  with  the  cost  of  the  investment  for  the  period,  must  be
pitted  against  the  cost  of  the  rentals  at  present.  The  more
costly  result  to  the  railroads  has  been  the  exorbitant  prices
they  have  often  had  to  pay  for  additional  terminal  properties
to  meet  the  necessities  of  expansion.  Inadequate  facilities  are
likely  to  be  even  more  costly  than  high-priced  terminal  facili-
ties. If  a  railroad  has  terminal  facilities  equivalent  to  only
seventy-five  per  cent  of  its  traffic,  it  must  constantly  be  under
strain  because  its  rolling  equipment  will  be  tied  up  by  the
delays  caused  in  unloading.  There  is  no  means  of  measuring
statistically  the  value  of  either  the  terminal  or  terminal  prop-
erties, but  the  gain,  as  a  whole,  is  overwhelmingly  conclusive.
And  it  is  in  this  total  influence  rather  than  any  attempt  at
unit  analysis,  that  both  the  terminal  and  terminal  properties
must  be  considered.
