Part 16

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 ------------- 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.