Railroads: Rates and RegulationsRipley, William Zebina
History
Railroads: Rates and Regulations
Ripley, William Zebina
Railroads -- Freight -- Rates -- United States; Railroads and state -- United States
Up to this point it has appeared as if, in making distinction between
the constant and variable expenditures of a railroad, it was the
latter only which grew as the volume of traffic increased. This is
not absolutely, but only relatively true, not only of the so-called
constant operating expenses, but of fixed charges as well.[39]
Everything depends upon the length of time under consideration. Many
expenses follow the fluctuations of business, not evenly but by
jerks. Up to the full limit of utilization of the existing plant,
each increment of traffic seems to necessitate but a very small
increase in the so-called variable expenses, with hardly any change
at all in the constant ones. A branch road can haul more and more
tons of freight with a given outfit of cars and locomotives by merely
increasing slightly its outlay for fuel, train service, wages and
supplies. But after a certain point more rolling stock must be provided
to accommodate the growing business. As each of these additions to
property occur, they contribute new quotas to the fixed charges and
to the so-called constant expenses of operation, such as maintenance
of roadway and the like. Nor can these new expenses be allocated to
the new business alone. The moment the old traffic has outgrown the
existing plant, the new expenditure becomes chargeable to all the
business alike. The new outgo must be distributed evenly over the
entire volume of traffic thereafter handled. Each ton, both of old and
of new traffic, beyond the haulage capacity of the locomotives then
in service, is equally responsible for the expense of new equipment
purchased. Although the old business could have been handled without
a million dollars spent for double-tracking or terminal enlargement,
this addition to the expense of maintenance of way or to the fixed
charges is equally attributable to every ton of traffic hauled.
Public-domain text, read in full here on John Shaqi.
Reviews
Reviews
No reviews yet
Be the first to share your thoughts on this work.
Join the Discussion
Join the discussion
Sign in to leave a comment or review.
Sign InorCreate an account