In 1901 the net capitalization of our railroads was, in round figures, $11,700,000,000. Six years later, or at the end of the greatest period of material prosperity that the United States has ever known, this capitalization had increased to $16,100,000,000--approximately thirty-seven per cent. A great deal has been written about railroad capitalization--a great deal without knowledge of the real facts in the case, and a great deal more with knowledge but also with malicious intent. These figures speak for themselves. Translated, they represent the expenditures of the railroads for permanent improvements and expansions during that busy seven-year period. At first glance an expenditure of more than $4,000,000,000 is staggering. Yet what are the facts? The facts are that hardly one of these roads expended enough that memorable season to keep pace with the vast demands of the freight and passenger traffic--particularly the freight--upon them. We experienced great railroad congestions during the winters of 1903, 1905, 1906, and 1907. And the loss to the large users of railroad facilities because of these earlier congestions is no vague thing; it can be figured high in the millions of dollars. And furthermore it can be said that there is no period of expansion in recent American commercial history that has not been both limited and hampered by the lack of transportation facilities. What a commentary this, on our so-called national efficiency! * * * * * Today we are just crossing the threshold of what seems to be an even greater period in the industrial expansion of the nation.[1] Yet how are our railroads prepared to meet their great problem? In 1901, as we have already seen, they met it by an expansion of their physical facilities. But in 1901 the railroads had credit. In 1916 the credit of many of them had become a rather doubtful matter. And this, of course, has been a serious detriment to their expansion--to put it mildly. An analysis of the service, both freight and passenger, of the railroads in the year 1907, the last of the "big years" in railroad traffic, compared with that of 1914--the most recent year whose figures are available--is illuminating in estimating railroad credit today, or the lack of it. The passenger-mile--representing the progress of one train over one mile of track--is the unit of that form of traffic. In 1914 the total passenger-miles had increased to 35,100,000,000 from the total of 27,700,000,000 in 1907--or 25.7 per cent. Similarly the ton-mile is the unit of freight transportation. As the name indicates, it represents the carrying of one ton of goods of any description for a mile. In 1914 the ton-miles had grown to 288,700,000,000 from 236,600,000,000--or twenty-two per cent.