CHAPTER X

FINANCING HIGHWAYS AND HIGHWAY TRANSPORTATION LINES Highway financing may be divided for consideration into two parts, namely: financing the road and financing the operation of the road. Both are necessary if goods are to be transported from where they are plentiful, grown, manufactured, or stored, to where they are needed for sale, consumption or transshipment. Money is required for both parts and it must be obtained in some legal manner. As has been shown roads developed from mere trails that originally were paths along which by common consent, force, or otherwise the privilege of passing was gained. This, when ownership in land was recognized, became an easement. After the development of civil governments the right to traverse and transport goods over such roadways, that is, the easement, was vouchsafed to the inhabitants and protected by laws. In England the right of way over another’s land became known as the king’s highway, as all public property was held and measures taken in the name of the king. In the United States it is known simply as a public highway. The highway is in reality the right of passage, not the beaten track, for in both England and the United States the laws recognize the privilege the traveler has when for any reason the road becomes blocked or obstructed of taking to the fields and making another track. Equity courts may grant damages for such usage of private land by the public but no court will attempt to prevent it; if necessary they will, however, by writ of mandamus command road officers to repair the established roads so as to make them passable. In England the law allowed the traveler to turn into the adjacent field, whether cultivated or not, whenever the track became worn or rutted. In order to keep the used way within due bounds and at the same time maintain it in a passable condition the freeholders, perhaps at first voluntarily then by force of laws, worked the roads once or twice a year. By doing this they saved their lands and crops from being trampled down. It has also been shown how Edward I took up the question of improving the highways as a police measure in order that it might be safe for man and goods to pass along the road without being attacked from ambush by robbers. Such robberies have taken place in the development of every land, and those who have made a profession of it are variously styled highwaymen, bandits, brigands, and so on. Even to the present day, as has been shown in a preceding chapter, highway robbery still exists, although the profession of highwayman no longer commands the respect of reputable society as was the case during the time of Robin Hood, and Claude Duval of England, and of the Robber Barons of Germany. Thus the public good demanded that the time of the freeholders and the money of the government be expended upon the highways. Of late years in the United States the “working out” of road or poll taxes has been practically abolished and the taxes are collected in money which is expended in road construction and maintenance by persons regularly delegated for that purpose. With the increased use and the building of better types of roadways more and more money is demanded so that the financing of highway improvements has become a matter of vast importance. The money must come from either private sources or from the public. If from the public it results directly from taxation or is borrowed and the obligations paid off by taxation. =Private Financing.=--A few persons of wealth have built roads as a benefaction to the public. Perhaps one of the most ambitious projects of this sort is the DuPont Road, which is located through the state of Delaware from north to south. The intention of the DuPont family is to make this road eventually one of the finest in the world. It has been very carefully laid out and constructed. Later it is to be widened and beautified. Some $3,000,000 have already been expended, and it is contemplated to spend $1,500,000 more. It might be well if more men of wealth would commemorate their names by constructing and endowing roads. In spaces about wharfs and depots, although on privately owned ground and privately constructed, the pavement is often used generally as a highway. Such places are of course primarily for the convenience of the steamship or railway companies and they are maintained at their own expense. However, all such expense forms a part of the cost of operation and no doubt is charged to the patrons in the overhead, or it is intended to be a means of advertising in the hope that it will increase business. In timbered and rough mountainous countries, roads have frequently been built and maintained by the companies interested in lumbering, mining, or other enterprises therein, and thrown open to the general use of the public. Here the companies figure that the benefit to be derived by them more than balances the expense. Furthermore, the use of them by the public, while a minor consideration as far as the road itself is concerned, is a means of maintaining a friendly feeling with the inhabitants. Turnpike or toll roads, as has already been pointed out, were very extensively built in the days preceding the advent of the steam railway. These were built with money raised by the ordinary methods for financing industrial enterprises. A good many thousands of miles of such roads were chartered and constructed by private capital amounting to millions of dollars before the steel tracks put them out of business. Only a few now remain in Pennsylvania and Virginia with now and then scattered short stretches of roadway, and bridges over larger streams elsewhere, and ere long they, too, will be taken over by the states and become a part of the great public highway. As late as 1915 a private toll road in Tuolumne County, California, operated by a mining company was purchased by the state and nation, a portion of it being within the Yosemite National Park, and made a part of the California state system. The people will never be content to go back to the inconvenience of being stopped by a turnpike every 4 or 5 miles to pay a toll amounting in many cases from 1 to 2 cents per ton-mile, when the same amount of money in the form of licenses and taxes will keep up magnificent systems of public “free” highways. =Public Financing.=--Every civic government has its methods for the collection of revenue to pay its necessary expenses. One of the easiest things theoretically to do, then, is to collect by a tax on the property of the district--state, county, township--sufficient money to meet expenses, including the building and maintenance of roads, from the property holders in proportion to their wealth and turn it over to the proper officers for expenditure. When roads were yet simple things, before they had become elaborate and complicated structures, that might have been done. Practically, however, even then the working of the roads was a farce; men sat around, told stories, retailed the neighborhood gossip and smoked their pipes or whittled sticks, while the horses hitched to the scraper or plow stood limp with one hip lower than the other, eyes half shut lazily swishing at the flies with their long tails. Soon the necessary hours were passed, their poll or road tax had been “worked out.” The roadway was left in an almost impassable condition to be gradually worn smooth during the intervening six months until it came time again to work the roads. To most of those old timers the working of the road was a necessary evil and done only because the law required it. When occasionally a road supervisor insisted on a full day’s work for a day’s credit he was a skinflint and at the next election lost his job. The tremendous amount of money necessary to construct present types of roads must, in the long run, be obtained from the citizens through some medium of taxation. A tax is a compulsory contribution levied upon persons, property, business, occupations, privileges, or enjoyment of the people for the support of government or governmental functions. When levied upon persons it is usually called a poll or head tax; when upon property, a property tax; when upon business it may be a capital tax, sales tax or an income tax; when upon occupations, an occupation tax; when upon privileges, a license; and when upon enjoyment, a pleasure tax. A good many of them may be lumped together under the name of revenue taxes. Some are collected personally by a specified officer of the government, while others are collected indirectly by the sale of stamps which are attached to the article or transaction taxed. Taxes may also be classified as direct, indirect and special, all of which are of great importance to the highway. =Direct Taxes.=--Direct taxes are levied directly upon property or persons. State laws usually prescribe that general property taxes shall be levied uniformly over the assessed values of the district concerned. A poll tax is levied on all persons of a particular age or class, as all able-bodied males between the ages of twenty-one and fifty years. An income tax is levied according to some prescribed rule on the annual incomes of persons and corporations. An income tax is really a tax on business, either present or past. In either case, whether the levy is on his poll, upon the assessed valuation of his property, or upon his declared income, the taxpayer contributes, theoretically at least, in direct proportion to his ability to pay. The amount of the tax is definitely ascertained some little time in advance of payment and is collected directly by an officer of government. The levying of labor or poll taxes on persons living within a particular road district easily expanded to the levying of property taxes to care for the local roads. However, as the cost of road building and maintenance increased the fronting or contiguous property could not stand the entire burden, the zone of taxation was widened to include larger areas, the township, the county or the state, depending on the importance of the highway. =Indirect Taxes.=--Indirect taxes are those not levied upon the various persons or the property of the district, but are placed upon some article of consumption or some article of manufacture, upon imports and exports, or some privilege or pleasure. The government does not look to each individual for its money, but to the seller or manufacturer or importer of the article taxed, or the licensee, or the operator of the theater or other pleasure resort. The amount of the tax is added to the price at which the article is sold or to the fee charged so that it is at last borne by the ultimate consumer, in proportion to his consumption of the article taxed, or the privilege enjoyed. Federal aid moneys all come from indirect taxes, for the Constitution forbids the national government to levy direct taxes. In Alaska 65 per cent. of the “Alaska Fund,” a fund derived from all returns from liquor, occupation or trade licenses obtained outside incorporated towns, must by Congressional law of 1905-1906; be spent in Alaska for roads, trails, and bridges. License fees on motor cars and sales taxes on gasoline belong to the class of indirect taxes, and are attempts to charge the user of the road in proportion to the wear and tear produced by him or his consumption of it. If the motor car is an express truck, a bus, or a taxicab the tax is passed on to the patron, and this patron charges it to the cost of living and attempts to pass it on to his employer through increased wages or those who do business with him. It is finally paid for by that visionary personage the ultimate consumer--everybody. =Special Taxes.=--Special taxes are those levied upon property for a particular improvement that is demanded by public interest. They are not uniform but must be levied in proportion to the benefits accruing to the property from the improvement. This class of taxes is very popular for financing the building of roads and the paving of streets as well as other public construction. The area adjacent to the road or pavement for a certain specified distance back, or possibly, halfway to the next thoroughfare, is assessed for the improvement and in road work is technically known as “fronting property.” Each piece of fronting property is required to pay toward the whole cost of improvement an amount proportional to the benefits derived from the improvement. These benefits evidently decrease as the distance from the improvement increases. They may not always vary in the same ratio, but appraisers will usually follow some definite rule and deviate from it only in extreme cases and as local conditions demand. That they should not decrease directly as the distance but in some geometrical ratio, most engineers agree. Law courts have frequently upheld assessments made upon some such basis. For the purpose of initiating an improvement by petition it is customary to adopt a fixed scale for the measure of the benefits, based upon distance, that will probably be derived from the improvement. Some legislative bodies have enacted definite rules for evaluating “influence” in petitioning. Generally the rule is based upon some mathematical variation. For example that the assessed value or influence of property of uniform width extending back from the roadway shall vary as the square root of the maximum distance back. In the figure on page 313, a lot of one-unit area fronting the street is given a value of 31.62. This is from the mathematical formula _y_² = 1000_x_ where _y_ represents the assessed value or influence in petitioning, and _x_, the distance back, considering the value of _y_ = 100 for _x_ = 10. To draw the curve mark off on a straight line ten equal distances; at the mid-point of these distances or units erect perpendiculars. From the formula calculate values for _y_ as shown in the table; lay these off on the verticals and plot the curve through their extremities. To clarify this some, suppose that upon the center of the first space, there being one unit area or lot here, there is stacked up the value of the assessed benefits 32 (31.62) silver dollars. On the next space, since there are two lots extending back from the street, the stack would contain 45 (44.72) silver dollars--continue this for each space and for the number of lots extending back. A curved line passing through the tops of the stacks representing the assessed values will be the influence curve plotted. [Illustration: +---+------+------+ |_x_| _y_² | _y_ | +---+------+------+ | 1 | 1,000| 31.62| | 2 | 2,000| 44.72| | 3 | 3,000| 54.77| | 4 | 4,000| 63.25| | 5 | 5,000| 70.71| | 6 | 6,000| 77.46| | 7 | 7,000| 83.67| | 8 | 8,000| 89.44| | 9 | 9,000| 94.87| |10 |10,000|100.00| +---+------+------+ Assessment curve.] For the purpose of initiating an improvement the unit in which the prospective benefits are to be measured is usually adopted by the governing or assessing authorities. Dollars will not do because the cost will not be known until after the improvement has been finished. In the case of roads and streets the unit quite generally used is the “front-foot.” The number of front-feet in any paving district will be the same as the number of abutting feet along the street to be improved. A different definition for “front-foot” is given on page