Railroads: Rates and RegulationsRipley, William Zebina
History
Railroads: Rates and Regulations
Ripley, William Zebina
Railroads -- Freight -- Rates -- United States; Railroads and state -- United States
It should be observed in passing that the relative distribution of
outgo above mentioned, varies greatly both as between different
railroads and, on the same road, as between different years.[33]
During lean seasons the imperative need of reducing expenses generally
induces the heaviest inroads on expenditure for maintenance of way.
Nearly one-third of these expenditures can probably be postponed for
short periods without serious detriment to operation; but, of course,
there is for each property an irreducible minimum at which economy
must halt. On the other hand, the cost of moving each train, that is
to say, the outlay for fuel and wages, cannot be greatly cut, although
some discontinuance of freight trains may take place. The most readily
postponable outlay is therefore found in the department of maintenance
of way. Two hundred ties per mile may be annually renewed instead
of twice that number for a year or two. Heavy decreases in the wage
account for road and track men may be effected, sometimes at the
cost of public safety perhaps, but none the less effectively from an
immediate fiscal point of view. A series of hard years thus always
results in heavy proportional curtailments of maintenance of way
expenses. In 1895, for instance, midway between the two worst years
of the depression of 1893-1897, only 19.82 per cent. of operating
expenses was devoted to maintenance of way, with 15.76 per cent.
expended for maintenance of equipment.[34] Six years later, in the
full tide of prosperity, the outlay for maintenance of way had risen
to 22.27 per cent. With over 350,000 freight cars idle on sidings, as
during the spring of 1908, expenditures on repairs of equipment may
temporarily be postponed. Depreciation rather than wear takes place.
An economy of about five per cent. may temporarily be effected in this
wise. It is only with the return of prosperity that the temporary
postponement of this expenditure makes itself felt. Economy at the
expense of efficiency is poor business policy in the long run. With
the revival of activity on the other hand, as in 1898, there may be
witnessed a sudden concentration of the postponed expenditures of
the preceding years. The Illinois Central was spending $1,400 per
mile on maintenance of way in 1905, as against only $1,150 in 1897.
A succession of fruitful years may, however, find the property so
thoroughly kept up that some measure of relaxation in expenditures
may ensue. During these good years with heavy traffic, it is the
maintenance of equipment charges which tend to rise. Locomotives and
cars are constantly in need of repair owing to hard usage. This was
a noticeable feature during the four years after 1900. The Illinois
Central, expending only $866 per mile for maintenance of equipment in
1897, laid out $2,200 per mile for the same purpose in 1907.
Public-domain text, read in full here on John Shaqi.
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