The railroad of today is no sooner completed as a single track, than it becomes necessary to provide industrial spurs; additional or enlarged terminals; replace its temporary structures by permanent ones; widen its excavations; strengthen its embankments; provide passing tracks, additional shop facilities, enlarged passenger and freight stations, warehouses, elevators, docks and wharves at water terminals, additional tracks, heavier rail, rock ballast, elimination of curves, reduction of grades, block signals, elimination of grade crossings, heavier engines, larger and better cars, to the end that the constantly growing requirements and exactions of modern traffic conditions may be met; all of which requires increased expenditures, which it is easily seen could not in any event be provided for out of earnings. During the next ten years the railroads of the South will require $1,000,000,000 to enable them to fully provide for the increased demands for transportation facilities, an average of $100,000,000 per annum. Including the estimated increased mileage and the present capital investment, the resulting average capitalization would amount to $53,000 per mile, being $20,000 per mile under the present average capitalization of all the railroads of the United States today, which is $73,000 per mile.[B] Meeting the requirements of the railroad situation in the South by the expenditure of a round billion dollars during the next ten years, as outlined herein, would make the total investment in southern railways at the end of that period three billions of dollars on an estimated mileage of 56,000. It would require average earnings of $9,000 gross per mile per annum, with operating expenses at 70 per cent of the gross, to yield sufficient net income to provide a return of 5 per cent on this total investment. When these figures are compared with the present average gross earnings of the railroads of the United States, $11,400 per mile per annum, with an average cost of operation of $7,757 per annum, resulting in a ratio of operating expenses to gross earnings of 68 per cent, the above estimates appear reasonable and conservative. Even if this expenditure is made and the results predicted obtained at the end of the ten-year period, southern railroads will still fall approximately 25 per cent short of yielding the present average gross earnings per mile per annum of the railroads of the United States today. To provide funds to meet these ever-growing and incessant demands for additional facilities, the railroad companies must necessarily be large borrowers. The prosperity of the South in the next decade, and in those to follow after, depends upon the ability of the owners and managers of southern railways to foresee and provide for future necessities, and upon the promptness with which the work is accomplished.