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Putting money in an investment then not seeing it pan out is common. Just ask people who have bought treadmills and other expensive home exercise equipment.

The same dynamics apply to the locks at the Falls of St. Anthony on the Mississippi River through Minneapolis. These falls were described as a natural marvel by early explorers and were the source of waterpower for sawmills and wheat milling that created the Twin Cities. Built at great public expense 60 years ago by the Army Corps of Engineers, these locks to get barges past the falls are now closed to prevent Asian carp and other invasive aquatic species from moving further up the river.

There are proposals to breach the dams and let the river flow free as it did before 1900.

Did this infrastructure investment really generate net benefits for our country or our state or even our cities? If not, was it only due to an unforeseeable environmental peril? Or was taming the river a bad idea from the start? And what lessons, if any, can we learn from all of this?

The St. Anthony Falls lower and upper locks were federally funded. But private businesses make similar long-term investments that don’t seem to pan out. Take railroads. Riding on the success of the first transcontinental rail line in 1869, there was a frenzy of railroad building for the next half-century. Minnesota had 3,100 miles of track by 1880 and triple that by 1920. North Dakota had 5,300 miles in 1920.

Most towns in the Upper Midwest were on a rail lines. Indeed, nearly all were established 8 to 12 miles apart as rails extended west. One could ship grain or livestock from any of these towns or get on a passenger car and eventually reach Minneapolis, Chicago, New York or Seattle.

Some 30 percent of that trackage is now gone from North Dakota and half from Minnesota. The number of places one can board a passenger train in either state can be counted on one’s fingers. No livestock is moved to slaughter by rail. Loading a single boxcar of corn or wheat has been a historical relic for 40 years or more. A few old depots are museums, the rest long gone. A few rights-of-way have become bike trails, but most grades have been leveled to grow crops.

Yet millions of tons of farm products, fertilizer, iron ore, lumber, plastic pellets and myriad other materials move by rail. And it is not just bulk materials. Every day, many long trains of double-stack container cars trundle through our cities, whether Bismarck, Grand Forks or St. Paul. Many originated in Portland, Ore., Tacoma or even Vancouver and are destined for sites well east of Chicago. Today’s ton-miles would be staggering to railroaders at the trackage peak of 1920, when thousands of people worked in railroading in any of these states. Now the headcounts are a tenth of then.

Farming has had a similar pattern of boom and bust. Driving across mixed farming areas, one sees myriad concrete stave silos, erected to store chopped whole corn or forage plants so that they would ferment to provide feed for cattle and sheep.

Farms were diversified and, if they did not have milk cows, they usually had cattle being fattened for slaughter. Silage was key in the diets of both. Farming boomed in the 1970s following the end of the Bretton Woods system of fixed exchange rates that had disadvantaged agriculture for two decades. Farmers made heavy investments in livestock facilities, including thousands of new silos typically holding 450 tons or more. Silo manufacturers in Iowa, Wisconsin, Minnesota and in the eastern Dakotas each had hundreds of men on the payroll.

After the boom came the bust. The high interest rates and concomitant strong dollar of the early 1980s poleaxed agriculture. Farmers had overinvested and were overleveraged. Thousands went bankrupt in the “farm crisis” of the 1980s.

In the shakeout and with ongoing structural and technological change in the sector, thousands of barely used silos became obsolete. It was physically impossible to get the feed out of the silo fast enough to match the capacity of the machinery to get it to animals. Large bunker silos or the new plastic film bags, a European technology, allowed one to fill large feeder wagons with front end loaders in a couple of minutes with amounts that could only come down a narrow silo chute in an hour.

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So are there any economic lessons in such examples of bad long-term investments?

One is that it is hard to quantify benefits to society. Small railroad lines were not particularly profitable and railroad bankruptcies were common. But these lines often were constructed cheaply and did earn some return for 60 to 80 years. Moreover, most of the benefits probably flowed to society as a whole as they allowed agriculture and towns to develop in ways that would have been impossible without rail transport. There were government subsidies in the form of land grants to rail builders, but the opportunity cost of the land given was low without transport.

Many of the thousands of silos built in the 1970s never paid for themselves. They were investments made in the assumption that an ephemeral boom would last and that technology and the structure of agriculture would not change so radically. The losses in most cases probably were born by the lenders who financed them. Billions of dollars in farm debt were written off in the 1980s and silos were only a fraction.

The river locks probably had the worst social return, though not as bad as some other federal water projects. They were constructed in great part out of Minneapolis boosterism, based on the assumption, tenuous even then, that allowing barges to go just a few more miles upriver would turbocharge employment and economic activity on the north end of that city. A solid after-the-fact benefit-cost study would probably show how false that idea was. A study of the Tennessee-Tombigbee waterway a couple of decades after its completion showed a return of some 11 cents on the dollar. I doubt the St. Anthony Falls locks surpassed that, unless one assigns an enormous value to the fun of locking through with pleasure boats. The dreams of local shipping advocates were as unrealistic as those of people now using fancy electronic home treadmills as expensive clothes racks.

Long-term investments are fraught with uncertainty. And it often takes more than willpower to make them pay off. That may just be part of life.

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St. Paul economist and writer Edward Lotterman can be reached at bismarck@edlotterman.com.

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