Chapter VI (3)

Not only by the New York State law, but by the Massachusetts law, the method of elimination, as well as the apportionment of expense, is specific. The initiative is open to both the railroad and to the community, and the rapid progress of eliminations in these two States may be taken as an endorsement of the wisdom of such legislation, paving the way, as it does, for more progress on the question of eliminations than it is believed would ordinarily take place where no specific rule existed for the undertaking.

While the exact conditions throughout the country are not definitely known, it is believed that progress is being made quite generally in this direction. The influence of grade-crossing elimination upon the safety of operation is of such importance as to deserve serious consideration, as I will further suggest. Perhaps the elimination of grade crossings, thereby separating the public from the railroad except as authorized in connection with their patronage of it, is one of the most important factors as safety.

HUMAN ELEMENT IN OPERATION.

Notwithstanding the great improvements in roadbed, track, bridges, signals, equipment and other respects, all securing increased service and safety in railroad operation, the human element is a vital factor. With a view of raising the standard of individual service, a system of physical and educational examinations has been adopted. In the early days of railroads the individual service was possibly less definitely classified and qualified than must prevail under the exactions of modern conditions. In keeping with the progress in mechanical and safety devices and the necessity of a better system, we have today a preliminary examination, both physical and as to fitness. Employes must pass examinations as to vision, color sense and hearing, and their knowledge of the fundamental rules and regulations, as well as the fundamental knowledge of road, appliances and equipment. These examinations are repeated from time to time as the class of service and further advancement of the employes may require. Many of the large railroads have established schools, with capable instructors, where employes may receive instruction upon the performance of their duties, as well as affording them an opportunity to fit themselves for promotion.

Beginning with the General Time Convention some thirty years ago, the need to standardize railroad practices and systematically qualify employes began to be realized.

The Convention, largely through the efforts of Mr. W. F. Allen, saw that, as time is the term in which railroad schedules are expressed, it was a fundamental necessity that there should be standard time, and that the timepieces of employes which should govern their observance of instructions and schedules must conform to the standard. This led to the present system of standard time; to the system whereby employes must compare watches with standard clocks; must have watches inspected regularly and record taken of same; must compare watches and register before trips.

The General Time Convention led to the formation of the American Railway Association, consisting of the executive and operating officers of the railroads of the United States and Canada. The Association considers problems of railroad operation, construction and equipment, and recommends practices for their solution. Their investigations, conclusions and recommended practices embrace train operation, dispatching, block-signal operation, air-brake operation, physical and educational qualifications of employes, regulations for the transportation of dangerous articles, clearances, rail manufacture, safety appliances, inspection, car construction, track gauge, train heating and lighting, methods of loading, etc. Marked progress has been made in co-ordinating the work of the various organizations of railroad officers with the work of the Association, to secure the benefit of the broadest and most careful consideration of the subjects.

Assurance, therefore, exists that the experience and knowledge of railway management and officers will be brought from time to time into the text and fact of standard practices, promoting convenience by close interline relationships and uniformity of regulation, and causing a uniform, systematic and careful regard for safety.

BY WAY OF RECAPITULATION.

So, to recapitulate:

From a few miles of crude tramways the world has in a century built 500,000 miles of steam operated and 100,000 miles of electrically operated roads; instead of spragging the wheels we rely on the automatic high-speed brake; the coupling of cars has become an imitation of the action of human hands instead of risking their destruction; each train finds the condition of road ahead and protects itself by the agency of electric circuits and semaphores, the sequence of whose operation discloses on behalf of safety any obstruction of the route; four-wheel barrows are replaced by steel cars, larger than the miner's cabin, and carrying more than his month's output; instead of traveling on a tramway stage coach, the passenger finds available for his comfort a modern hotel on wheels, with every luxury known to-day--electrically lighted, steam heated, weather-proof; the old strap iron, which became detached and penetrated the car floor, frequently impinging passengers to the roof, is replaced by the bar of steel weighing 100 pounds to the yard, whose manufacture, installation and maintenance is prescribed with every degree of refinement known to the chemist and engineer; we have learned to treat sub-grade, drainage and ballast as an architectural science, and our bridges, from the single-log span, now make continuous roadbed for high-speed operation, even over the continental rivers.

Some one has said that the builders' art consisted in making the structure proclaim the purpose for which designed, and to my mind there is nothing which quite so dramatically fulfils this as the modern steam locomotive. How many of you have seen a huge Pacific locomotive, drawing a train of 600 tons at a speed of 70 miles an hour, yet under control of one man, just the same as Stephenson's "Rocket," which could have been lifted off its track and set on the ground by four strong men, and which was a world-wonder when for a short distance it attained a speed of twenty miles an hour? We know that our engineman with a Pacific locomotive and the high-speed train can stop his train with the air brake in a definite distance.

These comparisons, briefly as might be, between, we will say, the beginnings of the nineteenth and of the twentieth centuries, show how the commercial growth and increase of trade have produced a demand for transportation to be performed, and with the performance an economic revolution. We have, in a general way, though with far less than the thoroughness of which the subject is worthy, outlined what might be called the "state of the art," of railroad plant and operation, in a relative sense.

Progress of a pronounced character has occurred. That this progress has been accomplished by increased safety is demonstrated by common knowledge and confirmed by the records, both of the railroads and the public authorities. As an illustration, take the statistics of the Interstate Commerce Commission. The increased safety of railroad operation is indicated in part by the following figures:

For the decade following the beginning of the records, namely,
1888 to 1897, the fatalities were 1 in 45,300,000; for the next
decade, bringing it down to the present time, the fatalities
were 1 in 54,900,000; the gain in ratio being, for the nation
at large, fully 20 per cent.

Looking at the conditions in the State of New York, where the
density of travel is considerably in excess of that of the
country as a whole, we find a report of the State Engineer in
the year 1862 showing ratio of fatalities of 1 in 28,200,000;
the average for six years, 1902 to 1907, inclusive, shows 1 in
200,000,000; an increase in relative safety of 800 per cent.

We may assume that never before in the history of railroad transportation was there presented a bigger problem than to-day. The weights are greater; the distances are greater; the speed is greater; the population is more dense; prices and wages are higher, and the public service more exacting. A gathering of the official representatives of the nation and of every State, possibly with a desire for uniform and concerted action, even though it may be unofficial, points with emphasis to the attitude from which the public contemplates the employment of the railways in their behalf. It is, I believe, an accepted fact of our political constitution at the present time that the public, through its authorized representatives and through lawful channels, has a right to be reasonably assured in this respect. I believe that the co-operation manifested, as well as the inquiries by the various railway boards, has in a great sense aided in reaching our present standard of excellence, to which we can point with pride in comparison with any other national railway system of the globe. We are becoming more familiar--the railroad management and employes--with the standpoint of the public, and the public is becoming more familiar with the problems of the railroads. The mutual aim is: First, safety and service; and, second, economy. The public concern for the safety and service is for its own protection, and the railroad management must give both with economy.

So far we have been dealing largely with the progressive safety of railroad operation as furthered by the action of the railways, either initiatively or responsively, as the case might be. We have described the improvement in roadway, equipment and appliances; the standardizing of regulations for operation; the selection of employees and their government.

With the better understanding of the problem of the railroad by the public through and in connection with the special boards represented here today, it might not be amiss to express the hope that such needs as cannot be met without the active support of public opinion and perhaps legislation will be clearly brought out. One of the thoughts that occurs to me was suggested by a recent exhibit, from the records, of the loss of life, damage to railroad property, as well as injury to persons and property conveyed, due to the presence of unauthorized persons upon railroad property, whether wilfully or carelessly trespassing. As an illustration of its seriousness: during last year over 5,000 trespassers lost their lives on railroads besides a large number injured. Numerous mishaps have been traced to acts of trespassers, which may be the secret of many unexplained casualties. The railroads are a highway for the migration of tramps and unemployed persons, who commit petty depredations, jeopardize the safety of trains and the lives of employees and passengers. It seems of no avail that thousands of the worst class are arrested by railroad police forces and convictions secured, as the sentences in the majority of cases serve rather to aggravate, than to mitigate, the evil. One line arrested over 9,000 trespassers during the past year, and secured convictions in 75 per cent of the cases; but in half of them sentence was suspended, which usually meant that the offender used the railroad to escape from the scene. I do not wish to be understood to asperse the administration of justice, nor to insist that offences of a serious character are always committed by railroad trespassers, but the hazard involved is one that should not be permitted to exist, the railroad property destroyed or damaged bearing no relation to the risk of persons and property transported, and to the enormous loss of life involved.

I feel that the attention of those accustomed to broadly viewing problems of public concern should be brought to bear upon these facts, with the hope that measures may be taken to insure greater safety in this respect, as well as to save the waste of life and property now resulting from or incident to the practice. I might venture to suggest that the loss of life is far greater than entailed through decades by boiler explosions or rear-end collisions, the seriousness of which I do not wish to deprecate; and the situation might warrant special record of the facts being obtained in behalf of the public through the regular channels.

Wherein lies the increased safety of the future may perhaps be the query in many minds. It is universally sought.

It would be mere conjecture on my part, and, with your indulgence, I am not inclined to prophesy. As I see it, the great problem is to make our progress sure, taking no doubtful measures, adopting no specious devices which may appeal to us at first blush until we have satisfied ourselves that no greater risk is involved by the change.

The multiplication of rules enjoining obedience, together with devices for additional protection, may yield a false sense of security if fundamental obedience to existing rules and efficiency of existing appliances is one bit impaired by the addition. We must not embrace paper reforms, even though clamor and pressure be great. An "ounce of prevention is better than a pound of cure," we grant, but reverse the proverb, and the pound of prevention may over-whelm us. The public official would seem to be in a judicial position, mindful of public justice and safety, basing his judgment and acts upon facts alone. Improvement in general safety and character of railroad operation must be the product not only of an enlightened public opinion and the conservative wisdom of public representatives, but progressive and careful management, coupled with a sense of discipline and responsibility and industry of railroad employees, who must jointly share the obligations of the problem.

Speaking of the compliance we have cheerfully made to the suggestions of the public representatives--the Commissions--in regard to improvements of service, facilities and conditions of operation, etc., we believe in the long run that these things mean a better standard and greater security for railroad property, as well as the enormous benefit that accrues to the public by reason of proper and efficient railway service, and we have only thoughts of admiration for the attitudes of the Commissions as we have found them. They have a large problem. We are glad to avail ourselves of their wisdom, and believe it to be the means whereby the responsibility of the carriers to the public is secured, and through whom the responsibility of the public to the railroads must be voiced.

Gentlemen, I thank you for your kind attention, and the favor, which I acknowledge, of being permitted to address you as best I may upon a subject to which we are all devoted. In the absence of a distinct literature on the subject that your worthy President assigned to me, my efforts are perhaps a bit crudely devised, having no pattern. In another generation we may perhaps evolve a distinct species of railroad statesman and an encyclopedia from which we will be able to point back to the beginnings and the efforts at mutual advice, and to the growth and knowledge that have ensued, just as we have seen the day of small things in railroads to be the beginning of a constant growth to the wonders of today. I am sure that the American people can congratulate themselves upon an institution of the character of your Convention and of your several honorable bodies, and trust that this meeting will be such that you will feel that you have made definite progress in your concurrent aims.

RAILWAY MAIL PAY

BY

JULIUS KRUTTSCHNITT,

DIRECTOR OF MAINTENANCE AND OPERATION OF THE UNION PACIFIC SYSTEM AND SOUTHERN PACIFIC COMPANY.

The question of compensation to the railroads of the United States for carrying the mails has been under review before Congress at different times during the past ten years. The subject was exhaustively investigated by a Joint Commission of the Senate and House of Representatives in 1898 and 1899, which reached the following conclusion after full consideration and taking of a mass of testimony on all sides of the question:

"Upon a careful consideration of all the evidence and the
statements and arguments submitted, and in view of all the
services rendered by the railroads, we are of the opinion
that the prices now paid to the railroad companies for the
transportation of the mails are not excessive, and recommend
that no reduction thereof be made at this time."

(See Report 2284, House of Representatives, 56th Congress, 2d Session.)

This Commission also concluded as to the pay for railway postoffice cars:

"Taking in view all these facts as disclosed by the testimony
filed herewith, we are of the opinion that the prices paid as
compensation for the postal car service are not excessive, and
recommend that no reduction be made therein so long as the
methods, conditions and requirements of the postal service
continue the same as at present."

Since the above recommendations were made, the operating costs on railroads, and, consequently, the cost of handling the mail, as hereafter shown, have been largely increased, through higher prices for both material and labor, so that if the railways were not over-paid ten years ago, the present rates, being lower than those paid at that time, would be too low and should really be increased to give the railroads a reasonable return. Far from doing this, legislation enacted in the past few years has had the effect of cutting down the mail pay of the railroads, whilst the special requirements as to service and equipment have been made more severe and exacting.

Recent acts of Congress or orders of the Postoffice Department, which have the force of law, that have caused reduction of railroad revenues, are the following:

1. Act of Congress of March 2, 1907, reduced pay on all routes moving in excess of 5,000 pounds per day. This reduced the pay for handling mails $1,740,494.63, or 3½ per cent. of the total earnings. The same act reduced the rental rates for railway postal cars $935,974.09 per annum, or 16 per cent. The total reduction in pay to the railroads under this act was $2,676,468.72, or 6 per cent. of the total compensation for both classes of service.

2. Act of Congress of June 26, 1906, effective July 1, 1906, withdrew from the mails empty mail bags and certain supplies, to be thereafter shipped as freight or express. It may be conservatively estimated that the annual loss in mail revenue to the railroads by withdrawing these shipments from the mails is at least $1,000,000, with practically no reduction in space furnished because of this change.

3. Order of Postmaster-General of June 7, 1907, changing with each mail weighing thereafter the method of computing average weights on which pay is based from that always previously used and theretofore regarded as the proper interpretation of the law. The effect of this on the mail weighings of 1907 and 1908 was to reduce railway mail pay in two sections of the country, $2,222,108.92, or 9½ per cent., or at the rate of $4,500,000 per annum for all roads of the country.

4. Orders of Postmaster-General reducing railway postal car pay by allowing "shorter-car" pay on certain lines than heretofore authorized and changing certain full lines to half lines; that is, reducing pay for return movement, thus causing an annual loss to the railroads of $345,287.06. (Second Assistant Postmaster-General's Annual Report 1908, page 13.)

The effect of all of these reductions on the mail revenue of the railroads aggregate $8,500,000 per annum, or 17 per cent. of the total pay received by them in the year ending June 30, 1908, for handling the mail and furnishing railway postal cars.

These reductions were made without justification and for the purpose of reducing railroad revenues--and, incidentally, the expenses of the Postoffice Department, at a time when the net earnings of the carriers seemed large to the public mind, although under these favorable conditions the returns to the shareholders approximated but 4 per cent., whilst farmers were receiving 10 per cent., manufacturers 15 per cent. and National banks 18 to 20 per cent.

It is true that there has been a large increase in the gross revenue of the railroads in the last ten years, but this has accrued from traffic other than carriage of the mails and has been accompanied by great increase in operating expenses. In fact, were it not for the economies of the carriers, effected by the use of more powerful locomotives and larger freight cars, the increase in operating expenses would, without doubt, have fully neutralized the growth in revenue. In the months preceding the panic of October, 1907, the railroads were quite generally showing decreases in net earnings in face of the largest gross earnings in their history. It was costing them much more than a dollar to handle every dollar increase in gross earnings.

Since the hasty enactment of ill-considered legislation reducing mail pay, the revenues of the roads have been seriously affected by a change in business conditions which has reduced traffic without reducing prices of materials and labor. At the same time, legislation has increased labor costs by reducing hours of service.

In 1898 rates for transporting the mails were too low to cover the cost of service, they are much too low now, and the losses on the mail service as a whole--there are some routes that pay--are borne by freight traffic entirely.

RECEIPTS FROM MAIL AND OTHER RAILROAD TRAFFIC.

The latest statistics of operations of all railroads of the United States are for the year ending June 30, 1907, issued by the Interstate Commerce Commission, July 9, 1908. From them we compile the following exhibit comparing results of 1907 with 1898--when a Commission of Congress, after complete investigation of the subject, recommended that mail rates be not reduced.

Pct. Pct.
Year ending June 30th-- 1907. 1898. Inc. Dec.

Earnings from passengers $ 564,606,343 $266,970,490 111 --
Earnings from express $ 57,332,931 $ 25,908,075 121 --
Earnings from mails $ 50,378,964 $ 34,608,352 46 --
Earnings from freight $1,823,651,998 $876,727,719 108 --
Operating expenses $1,748,515,814 $817,973,276 114 --
Passenger train mileage 541,439,176(a) 341,526,769 58 --
Freight train mileage 662,106,857(a) 503,766,258 31 --

(a) Including mixed trains.

Earnings per passenger train mile (cents):
Pct. Pct.
1907. 1898 Inc. Dec.

From passengers 105.7 79.4 31 --
From express 10.7 7.7 38 --
From mails 9.4 10.3 10
----- ---- -- --
Total 125.8 97.4 29 --
Number passengers carried per train 51 39 31 --
Tons of mail carried per train .86 .80 7 --
Earnings per freight train mile (cents):
Earned from freight 274.0 173.1 58 --
Tons of freight carried per train 357.35 226.45 58 --
Operating expenses per total train mile
(cents) 147.0 95.6 54 --
Net earnings per train mile (cents):
Passenger trains 21.2 (Loss) 1.8
Freight 127.0 77.5 64 --
Passenger earnings per passenger mile
(cents) 2.014 1.973 2 --
Mail earnings per mail ton mile (cents) 10.66 12.57 -- 15
Freight earnings per freight ton mile 0.759 0.753 1 --
(cents)

Note.--Bear in mind these figures do not, of course, show
effect of cut of $8,500,000 in mail pay effective July 1,
1907, or losses in net revenue through depression in business
conditions commencing in latter part of 1907. As an index of
the latter, the Commercial and Financial Chronicle of September
5, 1908, showed that 141 roads, aggregating 168,839 miles or 70
per cent. of all roads in the country, had suffered a loss of
$63,484,902, or 24.97 per cent., in net earnings in the first
half of the calendar year 1908, as compared with same period of
previous year.

The foregoing statement clearly shows the difference between the revenue obtained from passenger trains as compared with freight trains. The control of the former is largely out of the hands of railroad operating officers, as to meet competitive and traffic conditions, heavier and more luxurious passenger cars must constantly be furnished, which, of course, means largely increased expense with very little increase in the paying train load. In fact, as to the mails, notwithstanding an increase in tonnage carried on the average train, the mail earnings per passenger train mile were actually less in 1907 than in 1898, due largely to the automatic reduction of railway mail pay per ton mile. Considering the freight train mile, the composition of which is almost entirely within the control of the railroads, which institute methods for reducing cost of transportation, it will be observed that by such methods the railroads have been enabled to place 58 per cent. more tonnage in a train, bring them 58 per cent. more earnings, which can be applied as an offset to the increase of 54 per cent. in the cost of running a train one mile.

This increase in operating expenses per train mile last referred to has been brought about largely because of the increased cost of labor and materials, which, as is well known, has been general throughout the country.

Comparing results of operation of all railroads of the United States for the year ending June 30, 1907, with 1898, when this question was last up, it is shown by reports of the Interstate Commerce Commission that gross revenue from operations, as well as income from investments, increased $1,380,000,000. This is a very large sum, but let us see what becomes of it. Increased wages paid to employes consumed $577,000,000, or 42 per cent., purchase of material included in operating expenses, $354,000,000, or 26 per cent. of the increased income, and these material purchases represented largely labor involved in their production. Increases in betterments and miscellaneous deductions consumed $77,000,000, or 6 per cent. of the increased income. Larger payments for interest on funded debt and current liabilities consumed $96,000,000, or 7 per cent., and larger taxes 2.5 per cent., leaving $240,000,000, or 16.5 per cent. of the increased income for the owners of the properties, the stockholders. In 1898 dividends were less than 2 per cent. of the capital stock, and in 1907, even with the large increase noted, they were only 4 per cent. Contrast this with the manufacturers' returns of 15 per cent., the farmers' of 10 per cent., and the National banks' of 18 to 20 per cent. on their capitalization.

Reduction in railway mail pay was not justified in 1898; it was far less justified in 1907. On the contrary, there has been a large fall in mail pay per ton mile, and conditions under which mails are transported are becoming more and more onerous. The cost of building a railway postoffice car to the present plans and specifications of the Postoffice Department is at least 50 per cent. more than it was in 1898, although pay received for handling these cars, that weigh from 25 to 30 per cent. more than formerly, has been arbitrarily cut over 16 per cent. by the Act of Congress of 1907, and has since been further cut through readjustment of routes. For the year ending June 30, 1908, the railroads received gross $48,155,379, including railway postoffice pay, for carrying 80 per cent. greater tonnage of mails than in 1898, a sum $12,747,629 less than it would have been but for the reduction of rate from 12.59 cents in 1898 to 9.94 cents in 1908. In face of this, as we have shown, arbitrary cuts of $8,500,000 more have been made, a grand total of over $21,000,000 less paid now than ten years ago.

About eighteen months ago the conclusion was reached that heavier and stronger cars were demanded by changed conditions resulting in heavier trains, greater speed and increased frequency and consequent risk of accident to clerks and mail in collisions and wrecks. After careful investigation and expert testimony the specifications were revised so that full 60-foot cars would weigh about 100,000 pounds instead of 80,000 pounds, and be greatly strengthened by the free use of steel plates and oak timbers. To meet the views of car builders, east and west, two plans and specifications, slightly differing, were adopted as standard, and railroads were given the option of conforming to one or the other. The best known anti-telescoping features were adopted in both plans, producing in the judgment of responsible car builders a car of exceptional resisting and carrying power. When new lines of cars are authorized by the Department, or new cars are ordered to take the place of old cars in service, companies operating the routes are furnished copies of these specifications and the superintendent of division is instructed to see that cars are built in conformity therewith. Inspections are made while the car is in the shop, and when it is completed a full report is made and forwarded to the Department. A decision is then reached as to whether the car is satisfactory and can be accepted.

(Annual Report Postmaster-General for 1905.)

This increase in weight of a postal car might not be thought of much moment, but it means to the railroads the movement of 1,000,000 additional gross ton miles per car per year, costing them $10,000 per annum in operating expenses, whilst, as shown, they receive 16 per cent. less railway postoffice pay now than formerly.

United States Postal Laws and Regulations, Section 1164, provide that the average weight of the mails used in fixing rates shall be established by the actual weighing of the mails for a period of not less than thirty days and "_not less frequently_ than one in every four years." The construction placed upon this by the Department has been the one which reduced to the minimum the pay which the railroads receive for services rendered. If mail traffic were stationary, weighing every four years would not matter much, but the increase of mail matter throughout the United States has been very great, and, because of the policy of the Department, to weigh the mails not more frequently than every four years, heavy losses have resulted through the railroads having to haul tonnage for three successive years following each weighing for which they receive no pay.

As a result of this policy of quadrennial weighings, the roads in Interstate Commerce Groups 7, 8, 9 and 10 (including the territory west of the Missouri river and the Mississippi below St. Louis) between 1878 and 1905 suffered a loss of $19,200,000, or 12 per cent. of the aggregate railway mail pay, compared with what they should have received if the mails had been weighed annually. In other words, this loss is equivalent to a reduction in the rate received per ton mile in these groups of states of 12 per cent. The loss to roads in the western part of the United States is most striking, due as it is to the rapid growth of that section. The same reduction, though to a slightly less degree, obtains in other parts of the United States.

COMPARATIVE RETURNS TO THE RAILROADS FROM CONDUCTING MAIL. PASSENGER AND FREIGHT SERVICE IN THE UNITED STATES.

In order to make a fair comparison of operating results from different classes of traffic, it is necessary to consider them under substantially similar conditions. The best measure of railroad service is work done, or weight multiplied by distance carried; in other words, the ton mileage. A comparison of services differing so widely as the mail, passenger and freight on the basis of ton mileage of such business is, however, unfair, because in the two former an excessive proportion of dead weight must be transported for each ton of paying load, whilst with freight traffic the proportion of dead weight is small. The hauling power of a locomotive is measured not by revenue ton miles, but by ton miles of gross weight, it making little difference to the locomotive as to what this gross ton mileage is composed of, the gross tonnage and the speed at which it must be moved being the factors that consume the energy of the locomotive.

A computation has been made of ton mileage on each individual mail route by multiplying weight carried by length of route; to the sum of these we add the dead weight of cars. The report of the Second Assistant Postmaster-General for year ending June 30, 1908, page 32, gives the number of cars engaged in mail service, which we have multiplied by the average mileage made by the average car, based on experience of the Union Pacific and Southern Pacific Systems, to ascertain total car mileage for the United States. Multiplying this by the dead weight of a car gives the ton mileage of dead weight, which, added to the ton mileage of mails, gives the gross ton mileage, measure of work and cost imposed on the railroads in return for the pay they receive for handling the mails. These computations are shown in the following statements, the results being conservative, as for want of accurate data it has been necessary to omit some work which the railroads do, which, if ascertainable, would increase the cost. For example, we have made no charge for the dead weight of that portion of baggage cars devoted to the handling of pouch mail, such pouch service, according to the Postmaster-General's report, covering annually on railroads and express trains 122,027,597 miles; nor for the dead weight of storage mail cars provided by the railroads. Neither has any account been taken of the value of transportation given mail clerks, which, based on the Postmaster-General's report of 1908, amounted to 629,778,443 miles, which at 2 cents a mile would be $12,500,000; nor for the value of transportation or postal commissions of Postoffice Department officials; nor does it take into account special service rendered by the railroads, such as delivering mail at stations, value of space furnished by the railroads and required of them by the Postoffice Department at important junction and terminal points for mail distribution and accommodation of government transfer clerks.

The statistics of passenger service in the following statements are based on the 1907 Annual Report of Statistics of Railways published by the Interstate Commerce Commission (1908 figures, which would show higher operating cost, not available), with the exception that the average mileage per car per annum run by passenger cars is based on the experience of the Union Pacific and Southern Pacific Systems.

Statistics of freight service are likewise based on the 1907 Report of Statistics of Railways, freight car mileage being actually reported by the Interstate Commerce Commission, dead weight per car being computed from all freight cars handled on Union Pacific and Southern Pacific Systems.

MAIL SERVICE.

Year Ending June 30, 1908.

Paid to the railroads for railway postoffice cars $ 4,567,366
Paid to the railroads for mail transportation 43,588,013
-----------
Total $48,155,379

Ton mileage of mails handled by railroads 484,683,135
Pay per revenue ton mile, including railway
postal pay car 9.94c
Pay per revenue ton mile, excluding railway
postal car pay 8.99c

R.P.O. Apartment. Total.
Number of cars (Postoffice Department
Report) 1,342 3,568 4,910
Average length (special mail weighing
1907), feet of mail apartment 59 27 --
Equivalent full R.P.O. cars 1,342 1,633 2,975
Miles run per car per annum (experience
of U. P. System and Southern
Pacific Company) 100,000 60,000 --
Total equivalent R.P.O. car miles 134,200,000 97,980,000 232,180,000

Miles traveled by R.P.O. clerks
(miles reported as traveled by crews
multiplied by average number of men
per crews) -- 629,778,443

Gross ton mileage--
Equivalent railway postal clerks, 232,180,000 miles, at
45 tons per car 10,448,100,000
Ton miles of clerks at 160 pounds per man 50,382,275
Revenue ton miles of mail, including pouch mail 484,683,135
--------------
Total gross ton miles(a) 10,983,165,410

Average weight of mail per equivalent full R.P.O. car (tons)(a) 2.09
Average weight of clerks per equivalent full R.P.O. car (tons) .22
Average weight of car per equivalent full R.P.O. car (tons) 45.00
Rate of mail and R.P.O. car pay per gross ton mile (cents) 0.438
Ratio of paying to dead load(a) 1 to 21.7

(a) No portion of mileage or weight of storage cars or cars handling
pouch mail has been considered.

PASSENGER SERVICE OTHER THAN MAILS.

Miles run Total car
Number per car miles run
of cars. per annum. per annum.
(a) (b)
Baggage and express, excluding 2,975
equivalent postal cars 7,404 60,000 444,240,000
Sleepers, diners and parlor cars 2,000 100,000 200,000,000
Coaches, etc. 31,594 40,000 1,263,760,000
------ -------------
Total 40,998 1,908,000,000

Passenger train miles, including mixed trains 541,439,176
Cars per train mile--
Mail 0.43
Others 3.52
----
Total 3.95

Gross ton mileage--
Baggage and express cars, 444,240,000x30 tons 13,327,000,000
Sleepers, diners and parlor cars, 200,000,000x50 tons 10,000,000,000
Coaches, etc., 1,263,000,000x40 tons 50,550,400,000
--------------
Total ton miles dead weight 73,877,400,000
--------------
Ton miles of passengers, 27,718,030 (a) passenger
miles at 150 pounds per passenger 2,078,891,552
Ton miles of baggage and express, 444,240,000 car miles
estimated at only 3 tons average load in a car 1,332,700,000
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Total ton miles revenue load 3,411,591,552
Total gross ton miles 77,288,991,552
Total revenue received from passengers and express $621,939,274
Total revenue received per gross ton mile (cents) 0.805
Total revenue received per revenue ton mile (cents) 18.23
Ratio of paying weight to dead load 1 to 21.7

FREIGHT SERVICE.

Total miles run by freight cars (a) 17,122,259,754
Total ton miles dead weight, each car estimated
at 15 tons (b) 256,833,896,310
Total ton miles revenue freight (a) 236,601,390,413
---------------
Total gross ton miles 510,557,546,477

Ratio of paying to dead load 1 to 1.1
Total revenue received for transporting freight $1,823,651,998
Total revenue received per gross ton mile (cents) 0.369
Total revenue received per revenue ton mile (cents), (a) 0.759
Tons per car revenue freight (loaded and empty) 13.8
Revenue per car mile (cents) 10.5

(a) Statistics of Railways of United States, 1907.

(b) Experience of Union Pacific and Southern Pacific Systems.

RELATIVE COST OF SERVICE.

To determine the relative costs to the railroads of performing mail, passenger and freight service, we must allocate the expenses to freight and passenger service as a whole, afterwards apportioning the latter to mails and other service. Railroad operating expenses apply jointly to both passenger and freight trains, so that, with few exceptions, it is impossible to determine exactly from any published statistics the cost of passenger train service as distinguished from freight. There are some items of train mile expense directly connected with movement which are less for passenger than for freight trains, whilst, on the other hand, many other expenses are greater for passenger than for freight, such as danger from casualties, necessity of expensive terminals, delays to other traffic through preference given to passenger trains, additional main tracks, and, particularly, higher standards of maintenance of roadbed required for high speed passenger train movement.

On account of the impossibility of separating the expenses, we assume that the above factors about balance each other and that the average cost of running _all_ trains can be taken as either passenger or freight train mile cost, respectively, without serious error.

We allocate a proportion of the passenger train cost to the mails on the basis of the gross ton miles handled in each class of passenger traffic.

The relative revenues and expenses are shown on opposite page, mail revenues being as shown by 1908 Report of Postoffice Department, and other statistics as given in the 1907 Statistics of Railways of the United States, published by the Interstate Commerce Commission, or are computed therefrom.

ALL RAILROADS IN UNITED STATES.

Summary of Mail, Passenger and Freight Service.

Other Total
Mails. Passenger. Passenger. Freight.

Gross revenue $ 48,155,379 621,939,274 670,094,653 1,823,651,998
Operating expenses $ 96,322,357 677,614,637 773,936,994 974,577,820
Taxes and interest on
bonds $ 23,503,973 165,582,552 189,086,525 235,468,467
Total expenses $119,826,330 843,197,189 963,023,519 1,210,046,281
Surplus -- -- -- 613,605,711
Deficit $ 71,670,951 221,257,915 292,928,866 --
Ton mileage (thousands)--
Revenue weight 484,683 3,411,592 3,896,275 236,601,390
Dead weight 10,498,482 73,877,400 84,375,882 256,833,896
Total gross 10,983,165 77,288,992 88,272,157 493,435,286
Tons dead weight per
ton revenue 21.7 21.7 21.7 1.1
Per gross ton mile (cents)--
Gross earnings 0.438 0.805 0.759 0.369
Operating expenses 0.877 0.877 0.877 0.197
Earnings over operating
expenses -- -- -- 0.172
Operating expenses over
earnings 0.439 0.072 0.118 --
Taxes and interest on
bonds 0.214 0.214 0.214 0.048
Surplus -- -- -- 0.124
Deficit 0.653 0.286 0.332 --
Per cent of operating
expenses to earnings 200 109 115 53
Gross expenses to earnings 249 135 144 67

Figures exclude dividends, betterments and additions, etc.

The above shows that whilst passenger service as a whole is unremunerative, the mail earnings are hardly what they should be to pay a fair share of the railroad operating expenses only, regardless of taxes and interest.

Or, put in another way, our computations have shown that in each passenger train run the railroads haul an average of 43/100 of a mail car, and the contents of this car yielded average earnings of 9.4 cents for each mile run. The computation just made shows that each freight car run, loaded or empty, yields a revenue to the carrier of 10.5 cents per mile. Incredible as this may seem, it is understandable when we reflect that the railroads transport 1.1 tons of dead weight for each ton of freight for which they are paid; with mail they transport 21.7 tons, or twenty times as much. The freight rate is .759c per ton mile, the mail rate 9.94c, or only thirteen times as much.

Arguing in still another way: Average number of cars in each passenger train handled in United States is 3.95, of which mail cars amount to 0.43, or 11 per cent. Eleven per cent. of the average earnings of a passenger train is 13.8 cents, but mail contributed only 9.4 cents. That is, it should pay 47 per cent. more than it does to be made to contribute a fair share to the insufficient earnings of a passenger train. Mails are fairly responsible on basis of space used for 11 per cent. of the cost of running a passenger train, or 16.17 cents, and as dead weight per foot of space is greater with mails, their proportion of train mile cost is even larger. They pay little more than one-half this cost.

By building larger capacity cars and larger engines, the cost of handling freight traffic, entirely in the control of the carrier, has been reduced to follow rate reductions and increased expenses.

On the other hand, because methods of conducting passenger traffic are largely--and mail traffic entirely--beyond their control the cost of handling mail and passengers has been steadily increasing, and, as revenue has not increased, the net revenue or margin of profit has been cut to a point where it is unremunerative.

The argument advanced by advocates of reduced mail pay, that increasing density permitted economies and that lower rates would yield more net, is not applicable when the carriers' hands are tied and measures of economy so successfully applied to handling freight are prohibited. The following will illustrate this:

On routes where pouch service is used mail is handled with express and baggage without much increase of cost over other passenger traffic. A somewhat greater mail traffic obliges the railroads to furnish apartment cars, at increased expense and dead weight for the postoffice feature, but still permitting the railroads to carry other traffic in the same car. A still further increase in weight means the establishment of full R. P. O. lines for which the railroads receive extra, but inadequate, compensation, these cars being used for no other class of traffic and adding largely to the weight and cost of train service. Even after the route has been made an R. P. O. route, the railroads are not permitted to economize by carrying more mail in the car, and as traffic density grows the roads must under the requirements of the Department add more cars, almost in proportion to the business, as the loads carried in R. P. O. cars, as shown by recent special weighing, average only 2¾ tons, and many of them return empty--for which empty haul the railroads often receive no pay. When the mail business has assumed very large proportions and the R. P. O. cars have multiplied in ratio therewith, special trains are then added to carry the bulk of the mail, being run at very high speed and adding to the railroad expense account in a far higher degree per unit of business than any other class of traffic.

In contrast to the above, baggage and express are very generally hauled in the same and a much lighter and less costly car than the mail car, and increase in tonnage is accommodated by hauling greater loads per car. In the case of freight, increased density means larger car and train loads and greatly reduced costs of operating per ton mile.

Despite these differences in conditions, the automatic scale has secured to the Government a larger reduction in mail rates per ton mile in the last ten years than the percentage of fall in freight rates, despite higher labor and material costs of railroad operating. As a result, the mail business--which, according to evidence introduced before the Congressional Committee of 1899, was unprofitable at that time, has been made more unprofitable at the present time by the heavy rate reductions of 1906-7.

As the greatest reduction made deals with mail routes on which traffic is heaviest, a consideration should be given to the following conditions of handling mail on such routes:

HEAVY TRAFFIC MAIL ROUTES.

On very many of the heavy traffic routes where the principal reduction in pay occurred a large part of the mail is now handled in special mail trains run at excessively high rates of speed. Such trains introduce the following conditions:

1. A very much greater liability to accident. A large proportion of the deplorable accidents that have occurred on the American railroads in recent years have occurred to excessively high speed trains, accidents to such trains being almost invariably destructive to life and property. An examination of serious accidents on the Union Pacific System and Southern Pacific Company for the calendar year 1906 shows that 36 per cent. of the property damage from all causes, including negligence, as traceable to trains not under control and excessive speed, whilst 30 per cent. additional damage was due to causes that might prevent inferior trains getting out of their way, such as keeping main line on time of superior trains, failure to observe signals or orders, etc.

2. Mail trains run at excessive high speed are much more expensive to operate than other trains, for the following reasons:

(_a_) Fuel consumption per traffic unit is very much greater at
high speed because of diminished tractive power of locomotives.

(_b_) A relative greater hauling capacity of locomotives must
be consumed in moving trains at higher speeds.

(_c_) Excessive speed requires higher standards of track
maintenance, double-tracking, block signals, heavy rail, better
ballasted roadbed, etc., etc.

(_d_) High speed means increased wear and tear on equipment and
track.

(_e_) High speed trains are expensive, delaying and adding to
the cost of other traffic.

3. Speed of trains carrying mails has been constantly increased, a study made of the speed per hour made on fastest trains on which R. P. O. cars are handled on seventeen of the principal mail routes giving the following results:

Average of fastest train on seventeen mail routes:

Speed
Year. (Miles per Hour.) Relative.

1905 42.21 136
1899 39.23 126
1890 34.35 110
1885 31.34 100
Average increase per year 0.55

With the above increase in speed, rates paid the railroads have automatically decreased whilst expenses have largely increased to provide for the above greater speed and because of increase in prices of labor and materials of all kinds in the past five or six years. This increase in speed has been made coincident with growth of freight traffic, which is the railroads' profitable business, _the non-profitable high speed trains delaying the profitable ones, increasing their cost and incurring liability to accident_.

4. Earnings of mail trains supposedly high are not higher than other passenger trains, which, as a whole, earn very much less per mile run than freight, relative figures being as shown by last report of the Interstate Commerce Commission--as 100 is to 218, whilst the cost of running passenger trains is as much, if not more. This is particularly the case with high speed passenger trains, which is the most unprofitable business in which railroads are engaged. (On Union Pacific System last year earnings per passenger train mile were $1.71, per freight train mile $4.31.)

5. Passenger engines in hauling fast passenger trains on principal main lines at the present time have assumed, on account of increased weight of equipment and excessive speed required, enormous proportions. We now have in such service on our lines engines weighing exclusive of tender 222,000 pounds, this power being 60 per cent. heavier and twice as costly as locomotives used in the same class of service ten years ago, burning double the amount of fuel. Engineers running these locomotives receive higher pay because of the greater size of these engines--to say nothing of recent increases made in their schedules. Such heavy power moving at fast speed is extremely destructive to the roadbed, requiring a much higher standard of maintenance than formerly, maintenance of way cost in the past few years having gone up 50 per cent. Engine failures are largely confined to fast passenger trains, and, in general, expenses are increased all along the line because of their introduction.

6. As illustrating the additions to expenses because of increased track maintenance on account of fast passenger and mail trains, we have made a study of statistics, using the Interstate Commerce report of 1906 as a basis, of seven roads having a large proportion of fast passenger service and seven roads having a moderate speed passenger service, but with a large proportion of freight service. On the roads first named the average cost of maintenance of way per mile was $2,951, and on roads in the latter class $1,565. The operating expenses per train mile in the former class were $1.47, and in the latter $1.33. The roads in the former class, on account of large number of excessively high-speed trains, were obliged to double-track their lines, which directly increased maintenance expenses.

PAY FOR RAILWAY POSTAL CARS.

The large reduction made by Act of March 2, 1907, in pay for railway postal cars was made in face of large increase in the cost of constructing such cars, due to higher prices of labor and material and greater cost of meeting the more exacting specifications of the Postoffice Department. Changing to steel construction, increases in weight, and generally heavier operating expenses, have created an extremely large increase in cost of moving these cars. The standard railway postal car of only a few years ago, 60 feet long, weighed 80,000 pounds and cost about $5,500. The standard railway postoffice cars, 60 feet long, of wooden construction, used on the railroads with which I am connected, weigh over 100,000 pounds each, or one-fourth more weight, and costs 40 per cent. more, whilst our new standard postal cars of steel construction weigh 108,000 pounds and cost over $9,000, or 60 per cent. more than the car of a few years ago.

An argument sometimes made in favor of a lowering of R. P. O. car pay is that for apartment cars used in runs where mail density does not require a full car, no additional compensation is allowed. But we feel that a fair consideration of the circumstances under which mail is handled as compared with other traffic will justify the conclusion that this is not an argument in favor of reducing R. P. O. pay, but rather for allowing the railroad additional compensation for the apartment cars as well. Both services require the furnishing of special features in the way of traveling postoffices not required except for the convenience of the Postoffice Department to enable it to do work while mail is in transit, such as ordinarily performed in office buildings. The full postal car is more expensive to the roads, as it always means additional car service, whilst in some cases of apartment cars the space not occupied by the traveling postoffice is adequate to take care of baggage and express, though very frequently this service also means additional car movement that would not be necessary but for the postoffice feature.

The saving to the railroads from reduction in car mileage that would be possible if it were not obliged to furnish traveling postoffices, but could use the space occupied by racks and other postoffice features by loading additional mail in cars, would be many times the revenue allowed by the railway postal cars.

To illustrate: The car mileage of postal cars (changing apartment cars to full cars on basis of length) is 232,180,000 per annum; the ton mileage of mail 484,683,135, or 2.09 tons per car. From figures obtained from the Postoffice Department, average car weights shown on page 59, table "EE," special mail weighing of 1907, it is ascertained that storage mail cars, which, of course, contain no postoffice features, carry an average of 7.04 tons of mail. At this rate the whole mail business could be carried by the movement of 68,844,000 car miles, or 163,336,000 less than actually employed, due to the postoffice features. The total railway postal car pay is only $4,567,366, or only 2.8 cents per additional car mile, whilst the operating expenses chargeable to running these 163,336,000 car miles, of 70 per cent. of the total movement, amount to $67,000,000.

But for the postoffice feature, the combined weight of an entire route could many times be handled in a single car such as is used for express instead of several heavy and expensive postoffice cars, whilst often extra cars for storage mail must be added, for which no extra pay is allowed, the cost of running these storage cars also not being included in the computation of cost of service, as no accurate statistics of their number or car mileage are available.