Part 40

╒═════════════════╤════════╤════════╤═════════════════════════════════╕ │ Item. │ Per- │Present │ COST PER MILE, ON BASIS OF: │ │ │centage │ value. │ │ │ │of each │ Cost │ │ │ │item to │ per- │ │ │ │ entire │centage.│ │ │ │cost of │ │ │ │ │ repro- │ │ │ │ │duction.│ │ │ ├─────────────────┼────────┼────────┼──────┬────────┬────────┬────────┤ │ │ │ │ Main │ Main │ Main │ Main │ │ │ │ │track.│ track │ track, │ track, │ │ │ │ │7,082 │ and │ bran- │ bran- │ │ │ │ │miles.│ bran- │ ches, │ ches, │ │ │ │ │ │ ches. │ spurs, │spurs, 2│ │ │ │ │ │ 7,813 │ and │sidings,│ │ │ │ │ │ miles. │sidings.│ and │ │ │ │ │ │ │ 10,718 │ second │ │ │ │ │ │ │ miles. │ track. │ │ │ │ │ │ │ │ 10,883 │ │ │ │ │ │ │ │ miles. │ ├─────────────────┼────────┼────────┼──────┼────────┼────────┼────────┤ │ 1. Engineering │ 2.7│ 100│ 761│ 689│ 503│ 495│ │ 2. Right of way │ 13.7│ 100│ 3,918│ 3,551│ 2,589│ 2,542│ │ 3. Real estate │ 0.4│ 100│ 122│ 110│ 81│ 79│ │ 4. Grading │ 10.7│ 99.9│ 3,064│ 2,777│ 2,025│ 1,994│ │ 5. Tunnels │ 0.6│ 95.2│ 162│ 147│ 107│ 100│ │ 6. Bridges │ 4.0│ 78.9│ 1,133│ 1,027│ 749│ 738│ │ 7. Ties │ 5.5│ 55.2│ 1,578│ 1,426│ 1,040│ 1,024│ │ 8. Rails │ 14.1│ 76.2│ 4,052│ 3,673│ 2,678│ 2,637│ │ 9. Track │ 1.9│ 77.7│ 543│ 492│ 359│ 353│ │ fastenings │ │ │ │ │ │ │ │10. Frogs, │ 0.7│ 70.7│ 207│ 188│ 137│ 135│ │ switches │ │ │ │ │ │ │ │11. Ballast │ 1.8│ 100│ 525│ 477│ 347│ 342│ │12. Track laying │ 3.2│ 97.6│ 926│ 839│ 612│ 602│ │13. Fencing │ 1.4│ 58.9│ 390│ 354│ 258│ 254│ │14. Crossings │ 0.3│ 70.5│ 86│ 78│ 57│ 56│ │15. Interlockers │ 0.2│ 89.4│ 71│ 64│ 47│ 46│ │16. Telegraph │ 0.1│ 52│ 36│ 33│ 24│ 24│ │17. Stations │ 0.2│ 75.7│ 580│ 526│ 384│ 378│ │18. Shops │ 0.1│ 68│ 305│ 276│ 202│ 198│ │19. Shop │ 0.5│ 79.6│ 156│ 142│ 104│ 102│ │ machinery │ │ │ │ │ │ │ │20. Water │ 0.4│ 71.9│ 103│ 93│ 68│ 67│ │ stations │ │ │ │ │ │ │ │21. Fuel stations│ 0.1│ 66.4│ 43│ 38│ 29│ 28│ │22. Elevators │ 0.6│ 75.5│ 189│ 171│ 125│ 123│ │23. Warehouses │ 0.1│ 71.1│ 37│ 35│ 24│ 24│ │24. Docks and │ 2.7│ 69.3│ 781│ 708│ 516│ 507│ │ wharves │ │ │ │ │ │ │ │25. Miscellaneous│ 0.6│ 69.4│ 174│ 158│ 115│ 113│ │ structures │ │ │ │ │ │ │ │26. Locomotives │ 4.4│ 56.4│ 1,274│ 1,154│ 342│ 829│ │27. Passenger │ 1.6│ 71.2│ 452│ 409│ 299│ 294│ │ equipment │ │ │ │ │ │ │ │28. Freight │ 9.7│ 69.4│ 2,787│ 2,525│ 1,841│ 1,813│ │ equipment │ │ │ │ │ │ │ │29. Miscellaneous│ 0.3│ 60.3│ 99│ 90│ 66│ 65│ │ equipment │ │ │ │ │ │ │ │30. Ferries and │ 0.8│ 63.5│ 244│ 221│ 161│ 159│ │ steamers │ │ │ │ │ │ │ │31. Electric │ 0.004│ 96.6│ 13│ 12│ 9│ 9│ │ plants │ │ │ │ │ │ │ │32. Terminals │ │ │ │ │ │ │ │33. Legal │ 0.3│ 100│ 95│ 86│ 63│ 62│ │ expenses │ │ │ │ │ │ │ │34. Interest │ 2.6│ 100│ 747│ 677│ 494│ 486│ │35. Organization │ 1.3│ 100│ 373│ 339│ 247│ 243│ │36. Contingencies│ 9.1│ 82│ 2,602│ 2,358│ 1,712│ 1,695│ │37. Total cost │ 100 │ 82.1│28,623│ 25,945│ 18,914│ 18,627│ ╘═════════════════╧════════╧════════╧══════╧════════╧════════╧════════╛

The writer does not care to permit to go unnoticed the imputation that he has attacked railroad officials as a class. If such inference is to be drawn from this paper, he desires to correct it.

The writer was in railway service for some years, for six years in an official position. For the past fifteen years he has been, at frequent intervals, on special service for railroads. He is at present under employment by two of the principal railways of the country. He has many warm friends in the service, many in official capacities, and he is fully cognizant of the high ability, integrity, and loyalty of railway employees, and by employees he means to be understood as including all classes, from the highest officials down.

Inasmuch as our railroads form our greatest industry, and inasmuch as the active heads of the large roads have under their control such properties as but few in other fields are called to administer, it follows that there are hundreds—yes, thousands—of men in railway service, competent to fill any office in the land. The writer repeats: it is a pity that the demands of their work are such that they cannot give more of the benefit of their highly specialized training to the public service, and that they have so often apparently misunderstood or misconstrued the perfectly honest attempts of public officials to find a remedy for real evils.

In closing, the writer desires to say that he regrets the impossibility of treating the subjects of depreciation and fair return in a satisfactory manner without unduly lengthening this discussion.

It may not be out of place to say that, in the writer's opinion, a fair return on the average public service corporation property should be considerably in excess of the figures usually named. There is but little incentive to invest in railways, street railways, or other public service corporations, if the limit of return is to be 7%, or 8%, or even 10%, on the actual investment. This is especially true where the hazard of investment is increased by term franchises under which the companies are operating. The writer has the most absolute confidence in the ability and integrity of our Supreme Court, and is led to believe that, on a proper showing, confiscation will not be permitted.

He also believes that, in general, the great mass of intelligent people wish only absolutely fair dealing with the corporations.

On making a full and frank showing of facts and conditions, the public service corporation which is honestly financed and honestly operated, need have little fear of ultimate justice.

The public service corporation which is administered, not to render service to the public, but to permit stock speculators to reap a harvest, can hardly hope for the same brand of justice, and it is hardly to be expected that such a corporation will welcome publicity.

Footnote 19:

_Electric Railway Journal_, January 8th, 1910. p. 76.

Footnote 20:

December 4th, 1910.

Footnote 21:

_Railroad Age Gazette_, July 24th, 1908. p. 587.

Footnote 22:

_Engineering News_, June 16th, 1910, p. 697.

Footnote 23:

March 4th, 1910.

Footnote 24:

_Railroad Age Gazette._ July 31st. 1908, p, 627.

Footnote 25:

_Engineering-Contracting_, May 25th, 1910, p. 468.

Footnote 26:

_Railway Age Gazette_, March 4th, 1910, p. 437.

Footnote 27:

_Electric Railway Journal_, January 15th, 1910, p. 110.

Footnote 28:

Professor of Political Economy and Finance, University of Michigan.

Footnote 29:

For convenient reference, a set of these forms is filed in the Library of the Society.

Footnote 30:

Now M. Am. Soc. C. E.

Footnote 31:

_Transactions_, Am. Soc. C. E., Vol. LII, p. 328.

Footnote 32:

"Elements of Railroad Engineering."

Footnote 33:

Michigan Central _vs._ Powers Record, p. 500.

Footnote 34:

Second Annual (1888) Report of the Interstate Commerce Commission, p. 64.

Footnote 35:

Letter of Hon. Martin A. Knapp, Chairman of the Interstate Commerce Commission, to Hon. Stephen B. Elkins, Chairman of the Senate Committee on Interstate Commerce, covering a then pending bill providing for railway valuation, March 25th, 1908.

Footnote 36:

Pages 18-19.

Footnote 37:

C., C., C. & St. L. Ry. _vs._ Backus, 154 U. S., 445.

Footnote 38:

_Proceedings_ of the 22d Annual Meeting of the American Economic Association.

Footnote 39:

Page 11.

Footnote 40:

Decision and order of the Railroad Commission of Wisconsin, issued August 3d, 1909, in the case of Hill _et al._ _vs._ Antigo Water Company, pp. 84-85.

Footnote 41:

Page 139.

Footnote 42:

Shortly after the Kansas City Water Company case and the classic decision of Mr. Justice Brewer, and since developed by the suggestions of a number of engineers, among them John W. Alvord, M. Am. Soc. C. E., whose admirable article on "Going Value of Water-Works," presented at the Milwaukee Convention of the American Water-Works Association, held in 1909, is familiar to all students of water-works valuation.

Footnote 43:

Page 155.

Footnote 44:

Page 144.

Footnote 45:

_Transactions_, Am. Soc. C. E., Vol. LXIV. p. 94.

Footnote 46:

Bulletin 21. Department of Commerce and Labor, U. S. Bureau of the Census.

Footnote 47:

"The Principles Governing the Valuation for Rate-Fixing Purposes of Water-Works Under Private Ownership." By Arthur L. Adams. _Journal_, Assoc. of Eng. Societies. Vol. XXXVI, No. 2.

Footnote 48:

The Minnesota Commission classified all roads as "Carrying Roads" or "Switching Roads," the latter being mostly Union Depots.

Footnote 49:

This paper will be published in a subsequent volume of _Transactions_, Am. Soc. C. E.

TRANSCRIBER'S NOTES

1. Used a comma instead of a space after every third digit from right to left in numbers of more than three digits in keeping with authors preference. 2. Table 9 on p. 228 has an error in the math. The total of the second column is $1,259,149,434 instead of $1,259,049,434. The latter does agree with the difference arrived at in the next line. 3. Added "Grand total—All assets" to last line in Table 10 on p. 230 as this description agrees with the actual totals provided. 4. Silently corrected simple spelling, grammar, and typographical errors. 5. Retained anachronistic and non-standard spellings as printed. 6. Enclosed italics font in _underscores_. 7. Adjacent identical columns duplicated more than twice were not shown in the representations of the forms. 8. The forms that were too wide were split. The following section(s) originally continued to the right.