Part 39

================================+=================+================ | | Item | 1909 | 1908 | Bureau Figures |Official Figures --------------------------------+-----------------+---------------- Miles operated | 221,132 | 230,494 Number of tons carried | 1,441,012,426 | 1,532,981,790 Tons carried 1 mile | 217,756,776,000 | 218,381,554,802 Freight revenue | $1,643,028,564 | $1,655,419,108 Mileage of freight trains | 560,602,557 | 587,218,454 Number of cars in train | 29.7 | 28.3 Average number of tons in train | 388 | 351.80 Average haul per ton (miles) | 151.1 | 143.83 Average receipts per ton mile | | (mills) | 7.54 | 7.54 --------------------------------+-----------------+----------------

Experience has shown that in comparing these statements of averages for passenger and freight traffic, allowance has to be made for the fact that the Bureau's figures include all the great systems and are exclusive of some 13,000 miles of minor lines. It is difficult to estimate the effect of these discrepancies with anything like exactness. But complete returns invariably show a shorter mean haul and journey for the entire country than the Bureau's figures indicate and also a less train load of passengers and freight, the result being a slightly higher average for passenger and freight ton receipts per mile.

Last year from its returns the Bureau computed the passenger mile receipts at 1.933 cents and the ton mile receipts at 7.53 mills. The Commission's final figures were 1.937 cents and 7.54 mills respectively.

FREIGHT TRAFFIC 1909 TO 1888.

In the next summary is presented a condensed statement of the significant data relating to the freight traffic for the twenty-two years that the Commission has been compiling statistics.

SUMMARY OF TONS CARRIED, TON MILEAGE, MILEAGE OF FREIGHT TRAINS, AVERAGE TONS IN TRAIN, FREIGHT REVENUES AND AVERAGE RECEIPTS PER TON MILE.

=====+==========+==========+========+=======+========+========+======== | | Tons |Mileage | | Average| |Receipts | Tons | Carried |Freight |Average|Haul per|Freight |per Ton Year | Carried | One Mile |Trains |Tons in| Ton |Revenue | Mile |(Millions)|(Millions)|(Mill.) | Train |(Miles) |(Mill.) |(Cents) -----+----------+----------+--------+-------+--------+--------+-------- 1909 |(a)1,486 | 222,900 | 579 | 388 | 151 | $1,682 | .755 1908 | 1,532 | 218,381 | 597 | 360 | 143 | 1,655 | .754 1907 | 1,796 | 236,601 | 629 | 357 | 131 | 1,823 | .759 1906 | 1,631 | 215,877 | 594 | 344 | 132 | 1,640 | .748 1905 | 1,427 | 186,463 | 546 | 322 | 130 | 1,450 | .766 1904 | 1,309 | 174,522 | 535 | 307 | 133 | 1,379 | .780 1903 | 1,304 | 173,221 | 526 | 310 | 132 | 1,338 | .763 1902 | 1,200 | 157,289 | 499 | 296 | 131 | 1,207 | .757 1901 | 1,089 | 147,077 | 491 | 281 | 135 | 1,118 | .750 1900 | 1,081 | 141,596 | 492 | 270 | 130 | 1,049 | .729 1899 | 943 | 123,667 |(b)507 | 243 | 131 | 913 | .724 1898 | 863 | 114,077 | 503 | 226 | 132 | 876 | .753 1897 | 728 | 95,139 | 464 | 204 | 130 | 772 | .798 1896 | 765 | 95,328 | 479 | 198 | 124 | 786 | .806 1895 | 696 | 85,227 | 449 | 189 | 122 | 729 | .839 1894 | 638 | 80,335 | 446 | 179 | 125 | 699 | .860 1893 | 745 | 93,588 | 508 | 183 | 125 | 829 | .878 1892 | 706 | 88,241 | 485 | 181 | 124 | 799 | .898 1891 | 675 | 81,073 | 446 | 181 | 120 | 736 | .895 1890 | 636 | 76,207 | 435 | 175 | 119 | 714 | .941 1889 | 539 | 68,727 | 383 | 179 | 127 | 644 | .922 1888 | 480 | 61,329 | 348 | 176 | 128 | 613 | 1.001 +----------+----------+--------+-------+--------+--------+-------- Increase 1888 to| | | | | | 1909 209% | 263% | 66% | 120% | 18% | 174% | =Decrease= | | | | | | =24.0=% ----------------+----------+--------+-------+--------+--------+--------

(a) Figures for 1909 computed on basis of returns to this Bureau.

(b) Includes 75% of mixed train mileage, that being the practice prior to 1900.

Mark the one column which shows a decrease. This means a remission of almost exactly a quarter of a cent per ton mile in the average receipts from freight. On the tonnage carried in 1909 it meant a saving of over $540,000,000 to the shippers. In the presence of the present high price of everything carried by the railways, there is no ground for assuming that any portion of this half billion dollars withheld from the railways ever reached the ultimate consumer. On the contrary the presumption is unavoidable that it has been absorbed by the shippers and consignors, whose profits are greater than ever.

PROPORTION OF COMMODITIES MOVED 1899-1909.

Referring to the movement of different classes of commodities in his report for 1904, the Official Statistician said: "A slight change in the ratio of freight carried for any one of the classes named may have decided results, not only upon the earnings of the roads, _but upon the average rate per ton mile_." But without knowing the length of the haul of the respective classes, any estimate of the effect of such variation must be largely speculative.

In 1909, for the first time the Bureau undertook to collect the information as to the tonnage of the main divisions of commodities carried. Its inquiries were limited to the tonnage originating on the several roads, and the next statement presents the results in comparison with the official figures for 1907, which are the last available:

TONNAGE AND PROPORTION OF DIFFERENT CLASSES OF COMMODITIES MOVED 1909 AND 1907.

=======================+=======================+======================= | 1909 | 1907 +-------------+---------+-------------+--------- Class of Commodity | Tonnage | | Tonnage | | Reported as |Per Cent | Reported as |Per Cent | Originating | of | Originating | of | on Line |Aggregate| on Line |Aggregate -----------------------+-------------+---------+-------------+--------- Products of agriculture| 76,955,131 | 9.49 | 77,030,071 | 8.62 Products of animals | 21,807,486 | 2.69 | 20,473,486 | 2.29 Products of mines | 449,938,248 | 55.50 | 476,899,638 | 53.39 Products of forests | 83,679,179 | 10.33 | 101,617,724 | 11.38 | | | | Manufactures | 109,625,669 | 13.52 | 137,621,443 | 15.41 Merchandise | 35,500,833 | 4.38 | 34,718,487 | 3.89 Miscellaneous | 33,318,272 | 4.09 | 44,824,123 | 5.02 +-------------+---------+-------------+--------- Total | 810,784,818 | 100.00 | 893,184,972 | 100.00 -----------------------+-------------+---------+-------------+---------

NOTE.--These tables fail to include nearly 200,000,000 tons unassigned.

The most significant feature of this statement is the marked decrease, absolutely and relatively, in the tonnage of manufactures carried. Great as was the decrease in the tonnage of animals carried there was an increase relatively.

The next statement shows the percentages of commodity tonnage moved since the Commission has compiled the information divided between low and high rate freight.

SUMMARY SHOWING PERCENTAGE OF FREIGHT TRAFFIC MOVEMENT BY CLASSES OF COMMODITIES, 1907 TO 1899.

Table headings: Col A: Products of Agriculture Col B: Animals Col C: Mines Col D: Forest Col E: Total Col F: Manufactures Col G: Merchandise Col H: Miscellaneous Col I: Total

=====+======================================+============================ | Low Rate Freight | High Rate Freight | Percentage of Aggregate | Percentage of Aggregate Year +-------+------+-------+-------+-------+-------+------+------+------ | A | B | C | D | E | F | G | H | I -----+-------+------+-------+-------+-------+-------+------+------+------ 1899 | 11.33 | 3.12 | 51.47 | 10.89 | 76.81 | 13.45 | 4.49 | 5.25 | 23.19 1900 | 10.35 | 2.87 | 52.59 | 11.61 | 77.42 | 13.41 | 4.26 | 4.91 | 22.58 1901 | 10.76 | 2.91 | 51.67 | 11.67 | 77.01 | 13.75 | 4.16 | 5.08 | 22.99 1902 | 9.23 | 2.64 | 52.36 | 11.64 | 75.87 | 14.49 | 4.37 | 5.27 | 24.13 1903 | 9.56 | 2.63 | 51.56 | 11.67 | 75.42 | 14.39 | 4.69 | 5.50 | 24.58 1904 | 9.59 | 2.74 | 51.56 | 12.53 | 76.42 | 13.41 | 4.83 | 5.34 | 23.58 1905 | 9.03 | 2.54 | 53.59 | 11.24 | 76.40 | 13.60 | 4.32 | 5.68 | 23.60 1906 | 8.56 | 2.32 | 53.09 | 11.24 | 75.21 | 14.81 | 4.06 | 5.92 | 24.79 1907 | 8.62 | 2.29 | 53.39 | 11.38 | 75.68 | 15.41 | 3.89 | 5.02 | 24.32 1908 | 8.74 | 2.46 | 55.72 | 11.35 | 78.27 | 13.15 | 4.04 | 4.54 | 21.73 1909 | 9.49 | 2.69 | 55.50 | 10.33 | 78.01 | 13.52 | 4.38 | 4.09 | 21.99 -----+-------+------+-------+-------+-------+-------+------+------+------

It will be observed that the percentage of low rate freight carried in 1909 was greater than for any other year covered by these statistics. This was due more to the falling off in manufactures and miscellaneous freight than to any increased movement of low class freight.

CAR SERVICE OPERATIONS.

What the Department of Commerce and Labor calls "a convenient index to the traffic activities of the country" is found in the following comparative statement of cars handled by the various car service associations and demurrage bureaus, 1905-1909.

NUMBER OF CARS HANDLED BY 36 CAR SERVICE ASSOCIATIONS AND DEMURRAGE BUREAUS DURING TWELVE MONTHS ENDING DECEMBER, 1905-1909.

==========================+===================================== | Twelve Months Ending December +------------+------------+----------- Names of Associations and | | | Bureaus | 1905 | 1906 | 1907 --------------------------+------------+------------+----------- Alabama | 752,982 | 744,548 | 779,402 Central New York | 611,601 | 654,861 | 753,269 Central (St. Louis) | 863,788 | 908,096 | 919,130 Chicago | 2,166,910 | 2,251,763 | 2,282,191 Cincinnati | 675,117 | 748,763 | 771,990 | | | Cleveland (a) | 640,364 | 796,687 | 1,016,003 Colorado | 425,140 | 455,540 | 445,900 Columbus | 394,152 | 443,638 | 469,773 East Tennessee | 320,855 | 358,733 | 388,066 Indiana | 912,827 | 962,941 | 1,104,855 | | | Intermountain | 116,533 | 158,231 | 184,577 Lake Superior | 332,633 | 371,312 | 415,642 Louisville Car | 495,095 | 541,945 | 506,528 Memphis | 235,569 | 258,316 | 255,169 Michigan | 687,428 | 766,950 | 838,928 | | | Missabe Range | 30,241 | 37,613 | 42,786 Missouri Valley | 1,538,087 | 1,665,882 | 1,910,139 Nashville | 300,602 | 336,110 | 351,572 New York and New Jersey | 997,304 | 1,100,067 | 1,409,161 North Carolina | 357,474 | 374,710 | 407,257 | | | Northeastern Pennsylvania | 802,072 | 836,443 | 917,936 Northern | 1,467,041 | 1,722,345 | 1,736,981 Pacific | 761,382 | 972,398 | 1,166,886 Pacific Northwest | 647,726 | 727,474 | 888,093 Philadelphia | 2,056,744 | 2,218,755 | 2,326,723 | | | Pittsburg | 3,375,530 | 3,295,463 | 2,935,299 Southeastern | 813,444 | 862,379 | 853,720 Southern | 273,273 | 301,273 | 492,914 Texas | 932,992 | 977,630 | 986,475 Toledo | 262,875 | 312,329 | 530,617 | | | Virginia and West Virginia| 818,915 | 866,861 | 893,905 Western New York | 812,409 | 881,640 | 986,962 Western (Omaha) | 622,868 | 718,872 | 770,470 Wisconsin | 1,157,036 | 1,119,326 | 1,118,720 +------------+------------+----------- Total reported by 34 | | | associations and | | | bureaus (b) | 27,659,009 | 29,749,894 | 31,858,039 +------------+------------+------------ Baltimore and Washington | | | Demurrage Bureau | (c)721,428 | (c)740,903 | (c)735,103 | | | Illinois and Iowa | | | Demurrage Bureau | (d) | 3,054,315 | 3,258,770 --------------------------+-------------------------+------------

{table continued} =================================================== | Twelve Months Ending | December +------------+----------- Names of Associations and | | Bureaus | 1908 | 1909 --------------------------+------------+----------- Alabama | 631,487 | 700,393 Central New York | 738,054 | 804,419 Central (St. Louis) | 838,017 | 1,001,136 Chicago | 2,161,767 | 2,790,801 Cincinnati | 635,365 | 712,145 | | Cleveland (a) | 715,764 | 843,609 Colorado | 385,260 | 428,760 Columbus | 363,130 | 401,696 East Tennessee | 293,597 | 330,055 Indiana | 1,077,786 | 1,211,793 | | Intermountain | 153,885 | 201,077 Lake Superior | 338,109 | 370,490 Louisville Car | 518,955 | 565,748 Memphis | 239,156 | 224,648 Michigan | 696,926 | 859,812 | | Missabe Range | 42,930 | 54,934 Missouri Valley | 1,606,758 | 1,863,052 Nashville | 326,385 | 337,234 New York and New Jersey | 1,248,609 | 1,416,831 North Carolina | 404,334 | 445,398 | | Northeastern Pennsylvania | 633,655 | 594,231 Northern | 1,515,706 | 1,636,588 Pacific | 1,147,345 | 1,390,948 Pacific Northwest | 845,405 | 987,115 Philadelphia | 1,921,142 | 2,508,204 | | Pittsburg | 1,977,891 | 2,807,256 Southeastern | 823,948 | 981,737 Southern | 513,437 | 649,384 Texas | 1,118,622 | 1,302,211 Toledo | 383,870 | 492,127 | | Virginia and West Virgini | 778,940 | 942,231 Western New York | 806,488 | 931,185 Western (Omaha) | 733,346 | 775,828 Wisconsin | 1,022,270 | 1,006,050 +------------+----------- Total reported by 34 | | associations and | | bureaus (b) | 27,638,339 | 32,569,156 +------------+----------- Baltimore and Washington | | Demurrage Bureau | 588,930 | 672,954 | | Illinois and Iowa | | Demurrage Bureau | (d) | 3,561,740 ---------------------------------------+-----------

(a) Cleveland reported 10,016 lake coal cars for December, 1909.

(b) The Butte Terminal Association was superseded by the Montana Demurrage Bureau in May, 1908. The returns of the new bureau for the twelve months ending December, is 448,381 cars.

(c) Figures apply to larger territory; change and revision of 1907, 1908 and 1909 figures made October 1, 1909.

(d) Not reported.

VIII

EARNINGS AND EXPENSES

Having in the preceding pages given the facts as to the provision made by the railways for fulfilling their obligations as common carriers, it is now in order to present a brief review of their receipts and expenditures in relation to their public service.

For the second successive year the Bureau has to warn the reader that innovations in the forms of keeping railway accounts prescribed by the Commission preclude the making of strictly accurate comparisons of the returns for 1909 with those of any preceding year. In submitting its report for 1908 the Commission made the following explanation:

"A number of important changes have been made in the annual report forms for 1908, particularly in the grouping of certain items in connection with the Income Account and the Profit and Loss Account. The figures which follow do not include returns applying to carriers classed as switching and terminal. The changes in the income account submitted in the report under consideration are so far reaching in their results, in a number of instances, as to impair direct or close comparison with figures for similar items contained in previous statistical reports."

In the comparative Income Account below, which aims to present the situation as it would result from the actual operations had such operations been conducted by a single corporation, the Bureau has sought to make the returns for 1908 and 1909 conform as nearly as possible to "previous statistical reports." It should be premised, however, that the official figures for 1908 exclude the returns from switching and terminal companies, whereas the Bureau's figures for 1909 include some portion of these returns, which are as much an integral part of the transportation service of American railways as any they perform. The official figures for 1908 do not correspond absolutely to the preliminary figures for the same year compiled from the monthly reports as reviewed in the Introduction to this report.

With this by way of explanation, the comparative Income Account for the years 1909 and 1908 is submitted:

COMPARATIVE INCOME ACCOUNT OF THE RAILWAYS IN THE UNITED STATES CONSIDERED AS A SYSTEM FOR THE YEARS ENDING JUNE 30, 1909 AND 1908.

====================================================================== | Amount Item | | 1909 | 1908 | (221,132 miles | (230,002 miles | operated) | operated) ---------------------------------+-------------------+---------------- Passenger revenue | $ 551,634,278 | $ 566,832,746 Mail revenue | 49,508,972 | 48,517,563 Express revenue | 61,883,695 | 58,692,091 Freight revenue | 1,643,028,564 | 1,655,419,108 Other earnings from operation | 69,086,257 | 64,344,481 +-------------------+---------------- Gross earnings from operation | $2,375,141,766 | $2,393,805,989 | | Operating expenses | $1,568,111,272 | $1,669,547,876 Taxes | 82,650,214 | 78,673,794 +-------------------+---------------- Total | $1,650,761,486 | $1,748,221,670 +-------------------+---------------- Net earnings from operation | 724,380,280 | 645,584,310 Net revenue from outside | | operations | 5,410,338 | 5,977,268 | | Operating income | $ 729,790,618 | $ 651,561,587 | | Disposition: | | Net interest on funded debt | $ 293,338,105 | $ 282,354,001 Interest on current liabilities| 22,546,779 | 31,835,708 Rent paid for lease of road | 120,784,982 | 111,153,013 Additions and betterments | | charged to income | 24,807,546 | 28,086,454 Appropriations to reserves | | and miscellaneous items | 22,587,208 | 21,636,182 Other deductions | 70,174,473 | 64,669,546 +-------------------+---------------- Total deductions | $ 554,239,093 | $ 539,734,904 +-------------------+---------------- Surplus available for dividends, | | adjustments and improvements | 175,551,525 | 111,826,683 Net dividends | 171,607,550 | 104,074,006 +-------------------+---------------- Balance to profit and loss | $ 3,943,975 | $ 7,752,677 ---------------------------------+-------------------+----------------

In 1909 the "Income Account" of the railways was swelled and confused by including therein $200,725,696 of intercorporate payments, while that for 1908 includes $274,450,192 "Other Income" which, as has been formerly noted by the Official Statistician, swells the totals to a fictitious figure. It is out of this fictitious income that fictitious interest and dividends are paid, fictitious deductions made, and fictitious surpluses accumulated. If "Other deductions" in the above statement had been charged against "Other income" instead of being deducted from earnings from operation the balance to Profit and Loss for each year would have been so much larger.

What becomes of the rent paid by operating roads for leased roads is well shown in the statement included in the Commission's preliminary report of statistics for 1908 in which the amount received by the latter mentioned in the table just submitted is disposed of.

CONDENSED INCOME ACCOUNT AND PROFIT AND LOSS ACCOUNT OF LEASED ROADS FOR THE YEAR ENDING JUNE 30, 1908.