Decision No. 5124.
OPINIONS AND ORDERS
of the
RAILROAD COMMISSION OF CALIFORNIA
THE MATTER OF THE INVESTIGATION, ON THE COMMISSION'S
OWN INITIATIVE, INTO THE SERVICE AND MAINTENANCE AND
THE ECONOMIES OF OPERATION OF TRANSPORTATION COM¬
PANIES IN CALIFORNIA DURING THE EMERGENCY CREATED BY
THE WAR.
Case No. 1177.
Decided February 9, 1918. ^
California State Printing Office
36225
LIBRARY
IWRÇAU Of RAILWAY ECONOMIC» | C)
WASHINGTON. O. C.
COMMISSIONERS
MAX THELEN, President
H. D. LOVELAND.
ALEX GORDON.
EDWIN O. EDGERTON.
FRANK R. DEVLIN.
EXAMINERS
HARRY A. ENCELL
MYRON WESTOVER.
Copies of the Decisions of the Railroad Commission of California may be procured
at the subscription rate of 50 cents per month. Single copies, 5 cents. Bound
volumes, $1.50.
Address all communications to
CHARLES R. DETRICK, *
Secretary,
833 Market Street, San Francisco
IN THE MATTER OF THE INVESTIGATION, ON THE COMMISSION'S
OWN INITIATIVE, INTO THE SERVICE AND MAINTENANCE AND
THE ECONOMIES OF OPERATION OF TRANSPORTATION COM¬
PANIES IN CALIFORNIA DURING THE EMERGENCY CREATED BY
THE WAR.
Case No. 1177.
Decided February 9, 1918.
In view of the present status of railway control a number of recommendations and
suggestions made which it is directed be called to the attention of interested
parties and the investigation continued for such further action as may appear
desirable.
1. Labor Shortage: To obtain needed unskilled labor suggestion made that the
federal government remove the entrance tax and suspend the literacy test so as
to permit the importation of Mexican labor for track and farm work. It is held
that the importation of Oriental labor is not necessary in view of the availability
of Mexican labor. T'o obtain skilled labor, it is suggested that universities and
technical schools establish courses in railroad shopwork which shall include
jjractical training in railroad shops. Any action affecting employment to be
taken only after a complete understanding with organized and unorganized
workers affected.
2. Competition : Material efficiencies can not be affected under present competitive
condiions of operation and the minor efficiencies which may be inaugurated
under such conditions will not enable the railroads to meet the present emer¬
gency. No construction work on competitive lines should be carried out unless
so far progressed that stoppage would entail a considerable loss, instead, the
joint use of existing facilities should be carried out as far as possible.
3. Priority : All matters of priority and transportation orders issued by various
government boards should be handed to the railroads through one central
bureau so that the roads will not be left to their own resources in determining
who shall be served first.
4. Cross-hauls : Steps should be taken to do away with all unnecessary cross-hauls
of commodities, freight should be routed over the shortest and most efficient
line and, so far as possible, localities should be supplied with various commodi¬
ties from the nearest source.
5. Franchise Requirements: State, county and city governmental authorities not
to require utilities, during the present emergency, to live up to franchise
requirements which call for improvements, street work, etc., that is not absolutely
necessary in the operation of the public utility affected, also that all public
improvements not necessary in the prosecution of the war be deferred so that
the labor and materials may be available for railroads or other necessary
war work.
0. Supplies: The establishment of a priority by the federal government as between
requirements of railroads of the United States and orders for foreign govern¬
ments and industries in this and other countries.
7. Reconsignment : The suspension of reconsignment privileges on all commodities
with the exception of perishable products and the reduction of such privileges
on perishable products to a minimum.
8. Team Tx-acks : All existing team tracks to be used jointly by any carrier which is
able to reach them so as to eliminate, so far as possible, fi-eight congestion at
terminals.
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1
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0. Short Haul Freight : AU short haul freight, particularly less than car load ship¬
ments, to be handled by inland/ water transportation companies, interurban
electric lines and motor trucks so as to relieve interstate carriers and permit
the release of their equipment for longer movements, also the cooperation at all
freight terminals between steam railroads and local electric lines.
10. Advertising: The considerable expense incurred continuously by railroads in
advertising and soliciting for business could be materially reduced wthout any
impairment of the efficiency and convenience of the transportation service.
It is held that irrespective of whether or not the situation in the "West is as acute
as in the East, steps should be taken to cooperate as fully as possible, and that
the only manner in which the present emergency may be met is through unifica¬
tion. accordingly recommendation made that the Western railroads appoint a
committee to study and make recommendations looking to the complete unifica¬
tion and elimination of all merely competitive activities.
C. A. Curtis, for the California Western Railroad Company.
C. IF. Durbrow, for Southern Pacific Company.
H. C. Nutt and A. S. Halsted, for Los Angeles and Salt Lake Railroad
Company.
Clarence M. Oddie, secretary and counsel for the Western Association
of Short Line Railroads; Areata and Mad River Railroad; Bay
Point and Clayton Railroad; California Western Railroad and
Navigation Company; Cement, Tolenas and Tidewater Railway
Company; Holton Interurban Railway; Lake Tahoe Railway and
Transportation Company; McCloud River Railroad Company;
Ocean Shore Railroad Company; Pajaro Valley Consolidated
Railroad Company ; Riverside, Rialto & Pacific Railway Company ;
San Joaquin & Eastern Railroad Company; San Diego and
Southeastern Railway Company; Sierra Railroad Company of
California; Stockton Terminal and Eastern Railroad Company;
Trona Railway Company; Yreka Railroad Company; Yosemite
Valley Railroad; Glendale & Montrose Railway Company.
IF. S. Palmer, for Northwestern Pacific Railroad Company.
E. J. Mitchell, for Oakland, Antioch and Eastern Railway.
Frank Karr and Paid Shoup, for Pacific Electric Railway.
E. II. Maggard, for Petaluma and Santa Rosa Railway Company.
Sanborn & Roehl, for California Transportation Company; California
Navigation and Improvement Company; Sacramento Transporta¬
tion Company; Farmers Transportation Company; the Nevada-
California-Oregon Railway Company.
M. J. Wright, for Pacific Steamship Company.
J. M. Sims, for Pacific Coast Railway Company.
M. L. Shannon, for Santa Maria Valley Railway Company.
A. J. Klampt, for Trona Railway Company.
F. E. Sharp, for Visalia Electric Railway Company.
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G. J. Bradley, for Merchants and Manufacturers Association of Sacra¬
mento.
S. TP. Buss ell, for Consolidated Chambers of Commerce of Sacramento.
Bishop & Bahler by E. M. Wade, for certain shippers in San Francisco,
Oakland, and Los'Angeles.
L. B. Bishop and E. M. Wade, for Oakland Chamber of Commerce.
A. Larssen, for California Redwood Association; California Pine Box
and Lumber Company, and other pine lumber operators; also as
an individual.
Allan P. Matthew, for The Western Pacific Railroad Company and
Tidewater Southern Railway Company.
W. W. Cahill and W. TP. Einchman, for Death Valley Railroad Com¬
pany and Tonopah and Tidewater Railroad.
D. M. Sivobe, for Sierra Railway of California and McCloud River
Railroad Company.
TP. B. Alberger, for San Francisco-Oakland Terminal Railways.
G. L. Chamberlain, for Camino, Placerville and Lake Tahoe Railroad
Company.
E. TP. Camp and M. TP. Beed, for The Atchison, Topeka and Santa Fe
Railway Company.
Edgerton and Loveland, Commissioners.
STATEMENT.
This proceeding was instituted by the commission on its own initia¬
tive on November 28, 1917, and the hearings in the case were concluded
on December 20, 1917.
On December 26, 1917 the President of the United States issued his
proclamation dealing with the assumption of complete control over the
railroad operation of the country by the federal government. With
the issuance of that proclamation and the subsequent formation by the
federal government of a new national transportation policy— the policy
that is now being fixed into federal statute—the situation has changed
radically. The chief causes leading to this investigation are now no
longer operative. It therefore became a question with us whether this
proceeding should be dismissed and no further report made to the
commission or whether there were sufficient grounds to complete the
writing of the opinion. We reached the conclusion that this report
should be written.
It is not clear at this time what the useful function of this com¬
mission and similar state commissions will be in the new scheme of
things, and being in complete sympathy with the policy announced by
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the President as a war measure we feel strongly that all activities and
functions interfering with the full accomplishment of the President's
purpose, from whatever source such interference might come, must
be swept aside.
The investigation, however, has developed facts of importance bear¬
ing on this issue, and suggestions have been made by witnesses and by
the commission's staff which, in our opinion, will be of value in the
efforts to bring the country's transportation machine to the highest
point of efficiency. "We believe that in the operation of the California
railroads the federal government will be facing the same situation as
the carriers are now facing and that the difficulties must be understood
before they can be remedied.
Having in mind the announced purpose of the investigation, that
the commission wished
"to ascertain the facts as to the present condition of transportation
in California and, if the facts disclosed that transportation is not
adequate or efficient, to determine what the cause of such inad¬
equacy may be, and either to suggest or order remedies,"
we are making such recommendations, suggestions and observations
with the knowledge that such approval, disapproval or modification
thereof will be made as in the judgment of the Director General of
Ilailroads may be deemed expedient or desirable.
OPINION.
Purpose of investigation.
During the last five years at least the railway situation of the
United States has become increasingly difficult, and the inadequacy
of the available railway facilities to handle the volume of traffic of the
country has become generally recognized as beyond question.
Since the outbreak of the war in Europe, the strain*upon the trans¬
portation system has steadily increased. In April of last year, when
our country was drawn into the conflict, the demand upon the railways
was unprecedented. With the country at war it became immediately
apparent that not only would there be a still greater demand upon the
carriers but that the railways would form one of the most important
factors in the national defense. This was recognized by the President
of the United States when he appointed a National Council of Defense
for the purpose of ascertaining the resources of the country and secur¬
ing the cooperation of all organized transportation and industrial
activities in furtherance of this purpose.
The executive heads of the railroads responded to the emergency
when, at a meeting in Washington on April 11, 1917, they adopted this
resolution :
"Resolved, That the railroads of the United States, acting
through their chief executive officers here and now assembled, and
stirred by a high sense of their opportunity to be of the greatest
service to their country in the present national crisis, do hereby
pledge themselves with the government of the United States, with
the governments of the several states, and with one another, that
during the present war they will coordinate their operations in a
continental railway system, merging during such period all their
merely individual and competitive activities in the effort to produce
a maximum of national transportation efficiency. To this end
they hereby agree to create an organization which shall have
general authority to formulate in detail and from time to time a
policy of operation of all or any of the railways, which policy,
when and as announced by such temporary organization, shall be
accepted and earnestly made effective by the several managements
of the individual railroad companies here represented."
This resolution, we believe, must be considered as one of the important
documents in American railroad history; for the first time the execu¬
tive heads of the railroads give voice to their realization that the
highest national transportation efficiency can be attained only through
the unified operation of a continental railway system.
It is common knowledge now how, as a result of the resolution just
quoted, the "Railroads' War Board" was organized and how the board
set itself to the task of improving the national transportation efficiency.
Among other steps taken the board in July, 1917, addressed the state
public service commissions urging cooperation with the railroads in a
suspension, during the war, of "all efforts not designed to help directly
in winning the war." The letter in part says:
"Therefore this committee earnestly recommends that during
the war the railroads be required by the public authorities to make
improvements and carry out projects involving the expenditure
of money and labor only when they are absolutely essential for
war purposes or public safety. The prevailing high interest rate
on money, the difficulty of raising money in competition with the
tax free issues of the government, the excessive cost of supplies and
labor, the delay in obtaining material, the possible blockade of
traffic and the diversion of labor all contribute to make non¬
essential construction undesirable during the war.
"The committee considers that the erection of new stations,
elimination of grade crossings, are among the nonessential improve¬
ments which should be deferred at this time. We respectfully
suggest that the basis for consideration of new projects at this time
should be the increase in the capacity of the carriers for national
service.
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"Furthermore, we urge your cooperation in eliminating all
passenger service which is merely convenient and not justified by
public necessity during the present emergency situation."
This commission expressed itself as being in complete sympathy with
the suggestion and took action accordingly, that the test for new
projects, and indeed for all expenditures, should be the effect on the
capacity of the carriers for increased national service.
As the months passed, however, it became increasingly clear to us that
as far as the railroads in California were concerned, the pledge given
in the Railroads' War Board resolution remained largely on paper and,
in its essence, was not translated into action. There was no evidence of
any steps being taken, nor even of any general preliminary survey being
made, by the principal carriers operating in this state to "coordinate
operations in a continental railway system, merging during such period
all their merely individual and competitive activities." The competi¬
tive system with all its consequences on the carriers and on the public
remained in full force in California.
This commission, of course, was aware that transportation conditions
in the East were more serious than in the West, and that it was on the
Atlantic seaboard rather than on the western coast where the war trans¬
portation activities concentrated and congested. It did not seem right
to us, however, that the West should insist, even if it were possible, on
running its transportation machine on a pre-war and normal course
and regardless of the needs of the East when, perhaps, by taking stock
of our transportation resources and by some sacrifice we might help
where help was needed.
Meantime, it was evident also in this state that railroad transporta¬
tion was not normal. Informal complaints came in increasing numbers
to the commission asking our assistance in securing cars and more
prompt service. ' We were informed that the condition 'of the roadway
and track of the carriers in the state was deteriorating because of the
acute shortage of unskilled labor, and that the coming rainy season
would aggravate this condition. We heard that safety standards of
track and equipment were permitted to relax and that operations on
some roads during the winter were bound to be unsatisfactory, if not
dangerous. The commission understood that certain carriers intended
to curtail their passenger service, and in one instance at least it was
proposed to abandon a portion of the line.
These reasons, together with the general unrest prevailing in the
public mind regarding the railroad situation, prompted the commission
to institute this investigation.
Scope and method of investigation.
It was our purpose to confine the inquiry to California and to Cali¬
fornia conditions. The effect, however, of these conditions on the
national transportation problem will, if possible, be ascertained. Notice
of the hearing was sent to all steam and electric interurban railways as
well as to all water carriers under the jurisdiction of the commission,
ordering these utilities to appear and show cause why the commission
should not make this investigation. No good cause appearing to the
contrary, the commission stated that it would proceed with the investi¬
gation to the end that it would thereafter make such order or orders as
might seem just and reasonable. So that the commission might pro¬
ceed on the basis of fact, letters of inquiry were sent, prior to the
hearing, to—
(a) The general managers of all steam railroads operating in
California.
(b) The general managers of all electric interurban railroads oper¬
ating in California.
(c) The managers of all water carriers operating in California.
(d) The principal commercial and traffic organizations in Cali¬
fornia.
Letters of notification of the hearing, stating the general purpose of
the investigation, in addition to the organizations mentioned under
(d) were sent to—
(e) The Governor of this state (William D. Stephens).
(/) State Market Director (Harris Weinstock).
(r/) Hoover's Food Control Board (Ralph P. Merritt).
(/<) State Council of Defense (A. H. Naftzger, Chairman Execu¬
tive Committee).
(i) Federal Fuel Director (Albert Schwabacher).
(j) War Committee of the National Association of Railway and
Utilities Commissioners (Max Thelen, Chairman).
(k) Priority Board (R. S. Lovett).
(I) Railroads' War Board (Fairfax Harrison, Chairman).
(m) Commission on Car Service of the American Railway Asso¬
ciation (C. M. Sheaffer, Chairman)
(») Interstate Commerce Commission (Henry Clay Hall, Chair¬
man ).
All these parties either took part in the hearings or responded by
correspondence. A series of questions was addressed to the trans¬
portation companies mentioned under (a), (&), and (c), those to the
steam roads being typical. The scope of the investigation is indicated
by these questions, and the answers received from the various carriers
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and other parties to the proceeding show transportation conditions in
this state. The questions to the steam railroads were as follows :
A—Relative to the condition of roadbed and track.
(1) The mmfber of section men and other unskilled laborers
employed by your road on November 15, 1916, and the same
information for the same, or approximately the same, date for
1915.
(2) The number of men employed on the same date in 1917.
(3) The number of men you were short, as of the last date, to
carry on 3'our track and other wrork for which unskilled laborers
are employed.
(4) The number of derailments and other train accidents, both
passenger and freight, from all causes, and, separately, the number
of train accidents caused by failure of track and equipment.
Note.—If accurate figures have not been worked up for items 1 to 4, inclusive,
close approximation will answer the purpose.
(5) Statement showing expenditures incurred in the state of
California for maintenance of roadway and structures, by accounts,
for the nine months ending September 30, 1917 ; with like and
comparative figures for the same nine months in the years 1915
and 1916.
(6) The commission requests that you give it the benefit of any
suggestions you may have tending to alleviate conditions due to
the present labor shortage, as far as track labor is concerned, either
by cooperation between the railroads, by action of the Government,
or by any other means.
B—Relative to the condition of equipment:
(7) The number of skilled employees in your engine and car
repairing forces on or about November 15, 1916 ; and ,the same
information for the same date in 1915.
(8) The number of skilled employees employed at the same
time in 1917.
(9) The number of skilled employees you were short, as of the
last date, to carry on your shop and repair work, for which skilled
labor is employed.
(10) Statement of expenditures incurred in the state of Cali¬
fornia for maintenance of equipment, separately by accounts, for
the nine months ending September 30, 1917 ; with like and com¬
parative figures for the same nine months in the years 1915 and
1916. k
Note.—If accurate figures have not been worked up, close approximation will
answer the purpose with reference to items 7 to 10, Inclusive.
(11) The commission requests your suggestions with reference
to the labor shortage, so far as skilled labor is concerned.
(12) The number of engine failures in months of September,
October, and November, 1917, as compared with the same months
of the last two preceding years.
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(13) The number of engines shopped for ordinary repairs
during September, October, and November, 1917 ; and the same
information for the same period in the two preceding years.
(14) Same data regarding complete or back-shop overhauling.
(15) The number of bad-order freight ears out of service during
the months of September, October, and November, 1917, as com¬
pared with the same months of the two preceding years.
C—Relative to freight and passenger service:
(16) Gross freight ton mileage for September, October, and
November, 1917, as compared with the same information for the
same months of the two preceding years.
(17) Passenger train mileage for the same periods as in pre¬
ceding question.
(18) Comparative earnings per train mile, by months, for the
last two years, of the following trains, both directions:
For Southern Pacific :
(a) Overland Limited.
(&) Sunset Limited.
(c) Shasta Limited.
(d) Lark.
(e) Owl.
For Santa Fe:
(a) California Limited.
(b) Santa Fe De Luxe.
(c) Saint.
For Western Pacific :
Trains Nos. 1, 2, 3, and 4.
For Los Angeles and Salt Lake :
Los Angeles Limited.
Note.—This question nee'd not be answered by other roads.
In addition to the information required under 16 to 18, inclusive,
the commission requests your answers and a detailed statement of your
suggestions on the following questions:
(19) To what extent is it practicable to discontinue nonessential
passenger train service?
(20) To what extent is it practicable to eliminate special equip¬
ment on passenger trains where such equipment can be dispensed
with without serious interference with adequate service (dining,
buffet, and parlor cars, and other equipment necessitating helper
engines over maximum grades) ?
(21) To what extent is a reduction in local freight service
practicable by less frequent schedules or alternate schedules to
competitive points?
(22) Can any economies be effected by a suspension of intervard
switching? (Give your suggestions in detail.)
(23) Can any economies be effected by a reduction in branch
line service?
Note.—In answering questions 19 to 23, inclusive, please base your suggestions
on concrete proposals.
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(/) Fresno Flyer.
\g) El Dorado.
(h) Statesman.
(i) Stockton Flyer.
(d) Angel.
(e) Navajo.
(/) Missionary.
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(24) Sliould the interstate demurrage rules be adopted for
intrastate business, eliminating free time on account of inclement
weather? And, in your opinion, to what extent would this rule
relieve car shortage?
(25) Why should not embargo be placed on all commercial
export freight destined to Pacific ports, unless vessel space has
been contracted for and is known to be available, permitting of
a release of cars at seaboard terminals?
(26) Give detailed outline of your method of car distribution
and what official supervision is in effect on your lines to secure
maximum efficiency.
(27) Can any economies be effected by a suspension or a reduc¬
tion of reeonsignment privileges? ' And what should be the
maximum number of reconsignments allowed?
(28) Should shippers and receivers of freight be required to
accept carloads on the team tracks of any carrier at destination ?
(Under present rules, team tracks of one railroad can not be used
for loading and unloading cars moving by a competing line. This
rule might be abrogated,- and where congestion exists on the team
tracks of one carrier arrangement could be made for the handling
of excess cars on the team tracks of competing lines.)
(29) What is the labor situation as regards freight handling at
terminals and at transfer points?
(30) Have you lengthened the age limit of employees, now
almost universally 25 years for inexperienced and 45 years for
experienced men?
D—Capital and other expenditures;
(31) Furnish statement of expenditures for additions and better¬
ments and new capital expenditures in this state for the last two
years, with a short description of purpose of expenditures; also,
an estimate of such expenditures for 1918.
For Southern Pacific and Santa Fe: <
Give such expenditures only as exceed $2,500.00 for any one item.
For Western Pacific and Los Angeles and Salt Lake :
Give such expenditures only as exceed $1,000.00 for any one item.
For all other roads:
Give such expenditures only as exceed $500.00 for any one item.
(32) Furnish statement of cost of soliciting business, both
passenger and freight, segregated into items according to accounts,
• by months, for the last three years.
A similar series of questions was addressed to the electric interurban
railroads, which carriers were in addition asked to give an answer to
the following question:
Are you equipped to handle additional local freight business
between points reached by your line? If so, to what extent?
The water carriers were also addressed and asked to furnish infor¬
mation applicable to water transportation service.
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Answers to these questions were received from the majority of the
carriers addressed. These answers have now been tabulated for the
principal steam and electric roads and will hereafter appear in Table I.
The replies from the smaller carriers not listed in Table I have also
been considered by us and in reaching our conclusions wre have given
them such weight as seems desirable.
Hearings were held in San Francisco on December 14, 15, 18, 19, and
20. There were represented thirty-three steam railroads, five electric
railroads, five -water carriers and, in addition, seven chambers of com¬
merce and other commercial organizations. Several of the federal and
state branches of the government who had been invited to appear were
also represented.
In addition to the items considered in the letters of inquiry sent to
the various carriers, other features of the transportation problem were
gone into, as follows:
(a) The present status of control of the carriers.
(b) Problems of priority.
(c) The labor situation,
(d) Possibility of closer relationship between steam and electric
roads, both urban and interurban.
( e) Possibility of closer cooperation between steam lines and inland
waterways.
(/') Use cf motor truck to relieve freight congestion.
(g) Interrelationship between our local problem and the national
transportation problem.
Conditions in 'California.
In a discussion of the testimony and the evidence in this case it will
be desirable to follow the division indicated in the letters of inquiry sent
to the carriers.
A—Relative to the Condition of Roadbed and Track.
Taking the important California interstate lines as a whole (South¬
ern Pacific, Santa Fe, "Western Pacific, and Salt Lake), it may be
stated that the record establishes the fact that all the roads mentioned,
including the Northwestern Pacific, are suffering from an acute short¬
age of unskilled lábor, especially track labor, and that as a consequence
the permanent ways of these roads are not up to the usual standards
of maintenance and are rapidly getting worse. This general statement
is clearly borne out by the answers to questions 1 to 5, inclusive, as
they appear in Table I, and by the statements of the witnesses of the
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various lines. From the exhibits introduced the following figures bear¬
ing on the shortage of track labor are taken :
Railroad •
Number of un¬
skilled track men
employed on
Noy. 15, 1917
Number of men
short on Nov. 15,
1917
Southern Pacific
5,401
1,469
889
300
286
2,700
729
341
385
175
Santa Pe
Western Pacific
Salt Lake
Northwestern Pacific
In other words, the Southern Pacific was one-third short of its neces¬
sary track force; the Santa Fe also was one-third short; the Western
Pacific was two-fifths short; and the Salt Lake and the Northwesterh
Pacific had considerably less than one-half their necessary forces. The
same facts are equally well established by a comparison of the amounts
expended in this year for the maintenance of way with those expended
in past years. In making such a comparison the fact must not be lost
sight of that the cost of labor and materials has very largely increased.
In order merely to hold their own the companies would have to spend
much greater sums this year than in previous years, to say nothing of
additional maintenance made necessary by the very largely increased
volume of traffic that is being handled and by the generally acknowl¬
edged deterioration of labor efficiency. The figures, however, show that
the amounts spent for track maintenance are considerably less than in
former years. (See Table I.)
For the Southern Pacific this situation was even more startlingly
brought out from a statement read into the record and the discussion
that followed (Tr. pp. 68 to 72). In that statement, Maintenance of
AVay Engineer Titcomb of the Southern Pacific Company said:
"In other words, we are short 4,000 men, and for a rough figure
we could say »that their wages, including the material that they
would utilize, would easily average $4.00 per day per man. This
would mean $16,000.00 per day, which should now go into the
track, or in the neighborhood of $400,000.00 per month, or, for a
period of twelve months, near five millions of dollars."
This is an extremely serious condition and has its direct effect on
railway operation and efficiency in all its branches. The effect on safety
is immediately apparent. The effect of the necessarily resulting reduc¬
tion in speed of trains is apparent on freight .traffic efficiency. As this
condition is permitted to continue the bad effects increase in geometrical
progression. The practically unanimous testimony on this subject left
us doubtful that present railway control can cope with the situation.
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Various remedies to relieve this situation were suggested by wit¬
nesses. Among the proposals made were the bringing in of Oriental
labor from China and Japan; the equalization and stabilization of
wages ; the forced employment of idle men ; and the urging of women
labor into unskilled railway work. Several carriers were of the
opinion that it would be necessary to draft railway labor into the
military service.
There was complete unanimity as to the efficacy of one proposed
remedy and one that appears to us a real solution of the unskilled labor
problem, as far as this state, and probably other states along the Mex¬
ican border similarly situated, are concerned. It is suggested to permit
the unhindered influx of Mexicans into the United States and, in order
to accomplish this end, to ask the federal government to remove the
entrance tax now imposed on Mexican labor coming into the United
States; and also to suspend the literacy test, for this purpose.
We propose later in this opinion to summarize the remedies that to
us seem feasible and worthy of consideration in order to better trans¬
portation conditions, and will only state here that this suggestion with
regard to Mexican labor deserves careful thought.
Another suggestion, to conserve the supply of unskilled labor, looked
towards the stoppage of all public and public utility improvements that
might interfere with the railroad labor supply and that are not
absolutely essential at this time.
The president of the Northwestern Pacific Railroad Company testified
as to an interesting experiment that his company had made with the
contracting of ordinary maintenance work to a responsible railroad
contractor. lie pointed out that the difficulty with this method lay
principally in the drawing up of proper standard specifications and the
determination of proper cost units. Maintenance work done by a
contractor might, however, have the advantage of a permanent and
skilled contractor's organization—an advantage which would become
apparent in greater efficiency of work done and would possibly offset
higher unit costs. This suggestion we believe is one deserving of
further study ; and we believe that such a study can be advantageously
made by this commission.
B—Relative to the Condition of Equipment. ,
In regard to the maintenance of equipment, the problem of skilled
labor as contrasted wfith unskilled labor for track maintenance is
important. Here the shortage in men is not so spectacular as in the,
case of the track forces. But it is of equal, and perhaps greater,
significance since heavier duty is now imposed on equipment, especially
motive power, than ever before. Such equipment should therefore be
in better condition than ever before.
— 14 —
It is apparent that the labor question with skilled men is largely one
of wages. No suggestions of any particular value were made regarding
the possibility of relieving the shortage of skilled labor, except the
general one that those men be exempt from the draft, and the sug¬
gestion of the general manager of the Salt Lake that the technical and
manual training schools include shopwork, to be done in railroad shops,
in their student courses. The last proposed remedy seems to us to be
worthy of a trial, and we shall incorporate it in our recommendations.
Some slight assistance in alleviating the shortage of both skilled and
unskilled labor can be had by extending the age limit of employment
now in force on a number of carriers. By setting aside this age limit
a considerable number of good men could be called into service. It
appears, however, that in several cases the railroads have already done
this.
C—Relative to Freight and Passenger Service.
It is in connection with the feature of the inquiry relating to freight
and passenger service that the difficulties inherent in the competitive
system of railway operation become most apparent. The figures of
gross freight ton mileage for the selected periods in the years 1915,
1916, and 1917 (see item 16, Table I) show the increased demands
placed upon a deteriorating transportation machine. Taking the four
important interstate roads and the Northwestern Pacific, the following
figures were introduced in evidence:
Cross Freight Ton Mileage—September, October and November.
Railroad
1915
1916
1917
Southern Pacifie -
Santa Fe
5,018,323,631
875,618,872
226,107,654
385,415.009
47,290,281
6,144,431,517
1,038,672,636
326,591,601
440,176,249
72,687,649
6,866,177,399
1,204,366,549
* *259,578,815
466,052,445
76,387,334
Western Pacific
Salt Lake •
Northwestern Pacific
«
♦September and October only.
If'similar figures for all the years were taken, this point would be
brought out even more clearly.
"While freight traffic shows a steady increase, passenger traffic for the
same roads for the two years 1916 and 1917 has substantially remained
on a level. We were of the opinion that a curtailment of all non¬
essential passenger train service would be an important item in the
elimination of economic waste, and a step in the real unifying of the
state's transportation.
— 15 —
Question 18 in the questionnaire given above was framed with that
purpose in mind. The testimony of the general passenger agent of the
Southern Pacific was emphatic that not only was curtailment of
passenger train service out of the question, as far as the Southern
Pacific lines were concerned, but that trains should be added rather
than taken off. This witness was equally emphatic that competition
in passenger train service by the different carriers should not be
eliminated.
After consideration of the evidence and the exhibits introduced, we
were unable to agree with such a contention. It is our opinion that,
in compliance with the resolution of the Railroads' War Board studies
should have been made by the interstate carriers of this state with the
view to determining what is essential and what is nonessential in
pa?senger train service.
Table II, attached to this opinion and showing earnings of certain
California passenger trains, will be one indication of what direction
such studies should take.
When it comes to proposals as to what can be done to enable the
overtaxed transportation machine to handle its- abnormal load, the
suggestions readily fall into two classes:
First, measures looking to increased efficiency of transportation tools,
such as maximum use of cars through maximum loading; maximum use
of motive power through maximum trainloads ; maximum output of car-
days through tightening of demurrage rules and abolishing of certain
demurrage, • switching, industrial track, reconsignment, and other
privileges which the shipper now enjoys; and increases of the rates to
penalize practices objectionable to the railroads. Passenger and
freight service are closely related in this connection. Measures like
those mentioned are intended to increase the efficiency of tools of trans¬
portation independent of the general system. In other words, maxi¬
mum car loading, utmost use of motive power, maximum efficiency of
man power, is to be desired under any system of conducting transporta¬
tion, and need not be' influenced by competitive or noncompetitive
fundamental conditions.
Second. The other class of remedies lies in the direction of complete
unification and such doing away with merely competitive activities by
the individual carriers as is recognized in the resolution of the Rail¬
roads' War Board heretofore quoted to interfere with transportation
efficiency. The necessary remedies go directly to the .inefficiency of
our general transportation system, and are reflected in our questions
18'to 23, inclusive.
Where the efficiencies and savings resulting from measures in the
first class can be made considerable, the improvements that could be
— 16 —
brought out by freely using measures in the second class would be enor¬
mous. But our investigation seems to prove conclusively that under a
competitive system, where each road is forced to consider its own earn¬
ings, first and last, radical savings and efficiencies can not be had. It is
not a question of willingness or unwillingness on the part of the carriers
or of the regulating authorities, but it is rather the inevitable conse¬
quence of conditions as they are. The testimony in this investigation
abundantly bears out these conclusions.
As a case in point, General Manager Nutt of the Salt Lake testified
(Tr. pp. 103 to 105) what could be done by cooperation of competing
lines in the matter of lengthening the passenger schedules of through
trains between Chicago and Los Angeles. He said that if the time were
lengthened from twelve to fifteen hours he could take off one or two
of his main-line trains. Mr. Nutt said, however, "We could not do it
unless the others did." Such an arrangement, he said, would release
"about eighteen engines."
Later on, when this matter was taken up with the witnesses of the
competing roads (Southern Pacific and Santa Fe), it developed that no
joint study of this and similar problems had been undertaken by the
interested companies. The two stronger competing lines objected, for
competitive reasons, to any change in transcontinental passenger
schedules.
A similar condition became apparent in the question of export freight
embargo to Pacific coast ports, when this was under discussion (Tr. pp.
363 to 366). In answer to a question as to whether an absolute embargo
at Pacific ports would not result in relieving the present congestion, the
general freight traffic manager for the Southern Pacific said, "We
would be glad to see that done. " Being further questioned he said that
his road would follow any order dealing with this question "if some¬
body will issue it." And explaining why his company wTas unable to
handle matters as they should like to handle them, gave as his reason,
"We were not strong enough."
The following colloquy then took place :
Commissioner Edgerton: You say you are not strong enough.
What do you mean by that?
Mr. Luce: I mean the different carriers would be appealed to
that way, that the ship was already here for that freight and that
if one carrier would not take.it, the other would; and so they
naturally caught us in that sort of position.
Commissioner Edgerton: Well, now, that illustrates exactly
what I was getting at. Now, you have earnestly assured us that
coordination had gone to the extent that it was necessary. Now,
Mr. Luce pictures a situation whereby, if all the carriers would do
this thing and stand together, it could be done, but that the
Southern Pacific, for instance, could not do it alone, as he says.
— 17 —
The attorney for the "Western Pacific, Mr. Matthew, upon invitation
took part in this discussion and said (Tr. p. 367) :
"I don't think there is anything to add. I am reluctant to
express any opinion that seems to be even superficially at variance
with Mr. Durbrow's reply to your Honors. I think I would have
put the thing the other way around and said, 'As far as the present
conditions are concerned, there has not been any great amount of
coordination of the service for cooperation between the carriers, so
far as facilities are concerned; at least, if there is any, it has not
come to my knowledge. I take it we have all loyally undertaken
to obey all instructions from the Railroads' War Board. I do not
think there is anything more to be added than that'."
These quotations are made to illustrate the point. The evidence in
this direction is not limited to these excerpts but runs through the
entire testimony.
The testimony shows that a joint survey by the carriers with a view
to determining what is practicable in the way of a more efficient rear¬
rangement of a unified passenger service within the state had not been
made; and that there was no intention on the part of the individual
companies of getting together and making such a study.
The same testimony developed in the matter of a possible reduction
in local freight service by less frequent schedules or alternate schedules
to competitive points. The carriers do not intend to make any changes
that might benefit the whole if these changes interfere with individual
advantages. This is also true in the matter included in our question
23, as to what economies can be effected in a reduction of branch line
service.
And as to what can be done by real unification of the physical proper¬
ties of the various companies operating in California—this question
the carriers have not even asked themselves. There was unanimity on
the part of the witnesses that unification to such an extent is, in spite
of the Railroads' War Board, out of the question at this time. Several
witnesses testified that not only is it out of the question but that it is
not desirable.
We believe that the situation can be summarized by saying that major
efficiencies and consequent savings are out of the question under the
competitive system, and that the minor efficiencies that can be had will
not affect conditions sufficiently to enable the railroads of the United
States to cope with the wTar emergency.
D—Relative to Capital and Other Expenditures.
The branch of investigation dealing with capital and other expendi¬
tures confirms the general impression that large expenditures of new
money are required for essential additions to the present facilities. In
— 18 —
answer to our question 31, figures for additions and betterments in 1916
and 1917 and estimates for new work in 1918 were submitted. Again
taking the totals for the principal roads we have these figures
Capital Expenditures for Additions and Betterments.
Railroad
1916
1917
Estimate for
1918
Southern Pacific
Santa Pe
$7,601,154
2,525,035
*4,435,304
70,372
319,268
$7,590,637
2,618,351
$31,833,000
8,249.595
Western Pacific
Salt Lake
1,516,661
427,395
1,445,000
763,000
Northwestern Pacific
*JTrom January l, 1918, to Octobsr 21, 1917; no estimate for 1918 submitted.
Included in the amounts shown are expenditures for a certain amount
of new construction on all four of the interstate roads. In the ease of
the "Western Pacific and the Salt Lake railroads such construction
includes at least two items for new lines to be built, for merely com¬
petitive reasons, into territory which is already served by existing rail¬
roads. We have in mind the Western Pacific extension now being built
from Niles to San Jose and the Salt Lake branch line now being built
from Whittier to Santa Ana. The former extension is 23 miles long
and is estimated to cost $1,300,000.00, and the latter is 20 miles long
and is estimated to cost $1,400,000.00.
Under unified operation of the railroads by government, the full joint
use of the railroad property is made possible and the entry of a carrier
into territory not theretofore tapped by its lines (which under com¬
petitive conditions would be considered desirable even though it involved
duplication of facilities) can now be fully accomplished by the use of
existing lines over which the newcomer can do all of the railroad busi¬
ness possible to be done by the expenditure of large sums of money in
the construction of additional lines. We therefore believe that unless
these competitive,, projects are so far advanced that stoppage would
entail heavy losses to the constructing carriers that further construc¬
tion of these competing lines is unwarranted.
The difficulties of the railroads in competing for new money with
other investments and with the government is public knowledge so
common that this matter was not gone into exhaustively during the
investigation. The carriers' universal remedy for this situation is, of
course, the raising of rates.'
The fact is established, however, that it is not principally lack of
funds that interferes with necessary improvements of track, equipment,
and terminals. As far as equipment goes, witnesses for all the roads
— 19 —
testified that locomotive and car manufacturers are not now able to
fill the orders of the carriers. Of remedies there seem to be only two :
First, that the carriers themselves enter the manufacturing field ; and
second, that the government establish priority for railway necessities.
The first remedy is not a real one, for the reason that the railroads can
not in fact manufacture cars and locomotives; they can merely assemble
the parts. The demand for parts is almost as difficult to fill as that for
the finished product.
E—General.
It is in their attitude towards the general aspect of the present trans¬
portation situation that the testimony of the witnesses before the com¬
mission is most important and illuminating. This is particularly true
of such witnesses as may be said officially to represent the carriers and
to speak with authority: Mr. William Sproule, President of the South¬
ern Pacific Company; Mr. II. C. Nutt, General Manager of the Los
Angeles and Salt Lake Railroad; Mr. I. L. Ilibbard, Assistant General
Manager of the Santa Fe Coast Lines, and Mr. Paul Shoup, President
of the Pacific Electric Railway.
Mr. Sproule was the chairman of the western division of the Rail¬
roads' War Board; and the commission attempted to secure his views as
to the actual meaning and scope as well as the actual effects of the
War Board resolution passed by the presidents of the railroads of the
United States, which has already been referred to.
Mr. Sproule's interpretation of the resolution is that the policy of the
War Board "is a developing policy which will be announced by the
Railroads' War Board from time to time, as the circumstances of the
time call for." It is definitely his view that the coordination of the
railways' operation in a continental railway system and the merging
during the war period of all their merely individual and competitive
activities, which the railroad presidents pledged themselves to bring
about, should not be undertaken until the occasion actually arises to
unify the roads. In Mr. Sproule's opinion, on December 20, 1917, the
time for unification had not yet come. This is borne out by the follow¬
ing quotations (Tr. p. 560) :
Commissioner Edgerton: Therefore, Mr. Sproule, we can. con¬
clude safely, can we not, that coordination, unification, merging,
has gone as far as necessary in the judgment of the war board?
Mr. Sproule : The war board holds the authority to accomplish
those purposes. It is like all other authority that is well used ; we
may.have the authority, but we do not exercise it until the need
for the exercise arises.
— 20 —
And continuing—
Commissioner Edgerton: Yes. And the absence of orders or
suggestions promoting a greater degree of merging or unification
would lead us tç> conclude that the war board does not at the
moment think further steps are necessary.
Mr. Sproule : I would say that the war board, in the exercise of
a normal business prudence, aims to interfere as little with the
ordinary processes of transportation as they can, because the ordi¬
nary processes of transportation are responsive to the ordinary
wants of business, and the less interference there is with the rail¬
roads in the conduct of their general business, the less interference
will there be with the commercial, industrial, and social wants of
the country, to which alone the railroads are responsive.
Commissioner Edgerton: Yes. Now, Mr. Sproule, considering
the railroads operating in California, in and out of California, in
your judgment has there been up to the present time a merging
during such period, meaning the war period, of their merely indi¬
vidual and competitive activities?
Mr. Sproule : There has not been such a merging because there
has been no occasion for it.
This last statement may fairly be said to be the dominating note in
the railway managers' attitude. This attitude leads to a peculiar posi¬
tion. A reading of the transcript will clearly create the impression that
the railroads of the "West consider the western states as a country only
remotely connected with the rest of the United States, particularly with
the middle western states and the Atlantic seaboard. As far as the war
is concerned, it seems as if we in the West, from a transportation stand¬
point, are only mildly interested in it, and that the East has no business
to interfere with our normal activities. That conception was again and
again defended by the witnesses of the various roads as the proper one.
Conditions in California are normal—there is no emergency here.
That is the opinion of the representatives of the California interstate
roads.
Leaving aside the question whether transportation conditions here are
normal or abnormal (and it is abundantly clear that they are far from
normal), the view that the country, and the transportation system of
the country, must be considered as a whole for the purposes of the war,
and that the conditions in the East and the West must be equalized as
far as possible; that there is no sound reason why in justice the East
should forego not only nonessential but essential transportation needs,
while the West goes on as if nothing had happened—this vievT, at the
time of the hearings, found no favor wdiatever in railroad circles.
Mr. Sproule's testimony makes this very evident. Not only is it his
view that unification should be resorted to only as a last means but that
— 21 —
such unification would be an evil rather than a blessing. (See
Tr. p. 565.)
Commissioner Edgerton: Yes. But the point is, can they do it
better ; can they meet the emergency better in a unified condition,
Mr. Sproule?
Mr. Sproule: Again we are confronted with the word "unified."
Commissioner Edgerton: Well, let us call it merging, or what¬
ever you want.
Mr. Sproule : Physically unified, and with competitive relations
eliminated, they would do it probably better under the stimulus of
government demand at the time to meet that emergency ; but under
normal conditions, when the stimulus of competition is removed
and they would be released from the economic pressure that com¬
petition creates, I would say that unification would not serve the
public purposes as well as a competently regulated and competently
compensated competition would do.
Assistant General Manager Ilibbard of the Santa Fe, in dealing with
this feature of the investigation, testified from the point of view of a
practical railroad man. lie said that unification of freight and passen¬
ger service has not yet been considered and that while he is satisfied that
economies could be effected, he does not understand "the suggestions or
orders or declarations of the War Board to mean that he should get
together with his neighboring railroads and consider the matter." And,
"Well, tç be honest about it, no; not to the extent of turning over to
him some revenue if we could handle it ourselves." (Tr. pp. 452
to 455.)
Mr. E. W. Camp, attorney for the Santa Fe, interpreted the Rail¬
roads' War Board resolution to mean that the railroads should get
together and cooperate. (Tr. p. 478.)
«
Commissioner Edgerton : It did not say anything about cooper¬
ation.
Mr. Camp: Well, collaboration.
Commissioner Edgerton: Didn't say that. The word is very
much stronger than that. They said "one consolidated American
railroad system."
Mr. Camp: Oh, I know the newspapers offered that—.
Commissioner Edgerton: No, no.
Mr. Bradley : My dear sir, I will show it to you—no newspaper
business about that at all.
Mr. Camp: That was—that, in the nature of things, was more
or less exaggerated, an exaggerated statement. It could not
possibly be done by any war board.
Commissioner Edgerton: This was not a war board, Mr. Camp.
Mr. Camp: I mean to say by Fairfax Harrison and his board.
It could not be done.
i
— 22 —
Mr. Bradley : That was done by the presidents of the different
railroad systems of the United States.
Commissioner Edgerton: Let me read it to yon, Mr. Camp.
(Resolution was read.)
Now, I ask you again, Mr. Camp, whether you interpret that
language to mean that coordination was intended only to the
extent that it has now been accomplished.
Mr Camp : I suppose it was intended from time to time to reach
whatever might be necessary.
Mr. Hibbard of the Santa Pe was equally pronounced as to the impos¬
sibility and impracticability of 1'unification." (Tr. p. 507) :
Commissioner Edgerton: Well now, frankly, Mr. Hibbard,
within your knowledge Has any railroad or any two railroads
or any number of railroads merged their merely competitive
activities ?
Mr. Hibbard: I dont know—in the way of wiping out differ¬
ences between them, I don't see that they have, and X don't see,
Mr. Edgerton, how you or anybody else can expect that they are
going to surrender their earnings and surrender their individuality
until some order is passed by the commission or some law enacted
that will enable them to pool their issues between those points,
so that the earnings heretofore enjoyed by each fellow will still be
continued to him. You would not expect us, because of our 112
miles of distance, even in these war times, if anybody comes to us
with freight, as they do in Los Angeles, for San Francisco, do you
think that wrar measure means that we should say, "Here, the
war is on; go over and offer that to the Southern Pacific," that
we will say, "No, the Southern Pacific is the short line to Los
Angeles, and our line is the longer from San Francisco, and we
will incur more ton miles and it will cost more to handle the
business, and you go give it to the other fellow."
Commissioner Edgerton: Please don't make me responsible
for that pronouncement. I was' quoting, if you please, Air. Hib¬
bard, from a pronouncement of the railroads themselves, of which
the Santa Fe, your railroad, was a party. In other words, practi¬
cally you. Air. Hibbard, have said that during the war you would
merge your Merely competitive activities.
And finally, on being asked how he did interpret the language of
the "War Board, Air. Hibbard answered: "I don't know what the fellow
had in mind that wrote it"
Mr. Paul Shoup, president of the Pacific Electric Railway, whose
road is an important factor in the freight situation of the state, being
the third road in California in the number of freight cars handled
(Southern Pacific is first and Santa Fe second), was in general agree¬
ment with the views expressed by Air. Sproule on the transportation
problem as a whole. He felt that the coordination ought to begin with
— 23 —
the government itself in its dealings with the railroads, and that a
"traffic director for the government" should be appointed.
All matters of priority and all orders for transportation services
emanating from any department of the government, such, for instance,
as the War Board, the Navy Department, the Food Control Board, the
Fuel Control Board, the Shipping Board, the Air Craft Board, etc.,
should come through one channel to the railroads, who would then know
what to do and would not be left to their own resources in determining
who should be served first.
Mr. Shoup sees grave dangers in a too-centralized and inaccessible
administration of the entire transportation system of the country. He
believes that "you must place the responsibility for the business of
carrying in general upon the people who are directly in contact with
it locally" (Tr, pp. 696 and 697). He says (page 696) that
"when you have a situation of this kind and all of this service
responsive to the public needs has been created, wThy, then that
service is not to be disturbed rashly nor the organizations which
are giving that service and directing that service to be ripped
apart, especially in time of war, with any attempt at making them
all over rashly."
On the same subject, and after expressing his views that if the need
arises the war boards will reorganize the transportation systems, he
says (Tr. p. 701) :
"they will try at first to operate them as they are, because any
attempt to rip apart these railroads must be attended with more
or less confusion, and I think it would be wholly disastrous to this
country to start now, you might say at the bottom, to reorganize
these railway systems while we are at war. You can see now the
difficulty that we are having to attempt to create organizations to
take care of the new problems that come along, such, for instance,
the Shipping Board, and the wisest judgment, as I see it, would
be to make use of the organizations as you find them and of the
railroads and the facilities as they are, and then change those and
adapt them to the situation as you may have to do as you go along. "
He believes that an amalgamation of the system or a rearrangement
into any number of groups "w.ould be a very dangerous thing to do,
and a last resort."
Proposed remedies.
We have already pointed out that all possible and proposed remedies
fall into two classes: (1) remedies going to the root of things and
(2) remedies looking to greater savings and efficiencies of the individ¬
ual parts of the transportation machine.
— 24 —
Remedies in the first class were not advocated by any of the witnesses
for the railroads. We believe, however, that they should be distinctly
and definitely suggested by this commission.
When these hearings were held, the machinery enabling such remedies
to be put into practice was not available. The President of the United
States since then has placed the operation of the roads under govern¬
ment control ; and whatever fundamental changes are found necessary
and desirable can now be made. Among the fundamental remedies
belong such matters as the most direct routing of freight over the most
efficient line (and this resolves itself mainly into a question of grades
and curvature) ; the using of two independent single track systems for
purposes of operation as a double track ; the doing away with all
unnecessary "cross-haul" of commodities, such as rice in California,
coal throughout the country, and other commodities. As an indication
of the significance of the last suggestion, it should be pointed out that
Sacramento Valley rice is now shipped to Louisiana as paddy rice, is
cleaned there, and then sent back to California. It might have been
cleaned here in this state and saved the transportation in and out
of the state. This cross-haul waste is most clearly apparent in the coal
situation, although that particular commodity does not figure to any
extent in this state. We believe that the English system of dealing
with the coal traffic and supplying the demands of a particular locality
from the nearest available source, is an excellent one and should be
adopted in this country, where the coal traffic represents approximately
30 per cent of the entire traffic.
Other large remedies in the first class are the tremendous saving in
man power and expense to be effected by doing away with all merely
competitive passenger and freight service with its consequent saving in
man power, motive power, equipment, fuel, etc.
The even more important matters, such as the improved credit of the
railroads resulting from a unification of the entire transportation
system and the consequent reduction in the cost of capital; the
efficiencies and savings effected by doing away with manifold and
unnecessary overhead and general expenses of the companies ; the very
great simplification and savings that would result from the adoption of
uniform standards of construction, maintenance and operation; the
savings accruing from consolidated purchasing of materials and equip¬
ment ; these and other similar major remedies need merely to be pointed
out in order to attract attention to their significance.
We realize the limitations of the force of any suggestions made by
this commission or any actions taken by it along such lines ; but we are
of the opinion, nevertheless, that the commission should suggest and
recommend to the principal railroads operating in this state the imme¬
diate necessity of appointing a joint board or committee, made up of
— 25 —
qualified men from the technical, operating, and traffic departments,
who should study the situation in the state as a whole and make definite
recommendations looking to complete unification and complete elimina¬
tion of all merely competitive activities along the lines suggested above.
We believe that a definite program, divided into sections, should be
mapped out for such a board and that its report, to be completed within
a certain time, should be furnished to the proper federal authorities and
to this commission. This report should state concretely what changes
should be made, the effect of such changes on the freight and passenger
service, and savings in equipment, man power, and dollars effected
thereby. The basis for such a report is given in the accounting classi¬
fications of railroads of the Interstate Commerce Commission.
It seems to us that such a comprehensive study by qualified men is
the first step that must be taken to carry into effect the program laid
down by the President and by the Director General of Railroads.
We should venture the further suggestion that such a board, dealing
with California or western conditions, should not act independently, but
should merely handle a portion of a similar study to be carried on
simultaneously throughout the United States.
The President of the United States has proposed to congress that the
railroads be guaranteed an annual net return equal to the average
annual net operating income of the three years ending June 30, 1917.
As a corollary to the guarantee of profits, goes the assumption by the
federal government of all operating expenses of the carriers, irre¬
spective of what the financial operating result will be during the period
of government guarantee and government operation. If such specific
terms are enacted into law by congress, it seems to us that the obligation
on the carriers is greater than ever to operate economically and with as
little waste as possible.
That the savings of railroad operating costs also results in the saving
of man power is, during the war, an additional reason why a most
thorough survey should immediately be made to determine what
economies and efficiencies can be effected. We know that, in dollars, the
savings will run into the hundreds of millions.
Among the lesser remedies and efficiencies advocated during this
investigation, it is our opinion that the following suggestions are of
value and should be acted upon by the appropriate authorities :
With reference to the labor shortage, and referring now to unskilled
labor, it is our opinion that the illiteracy and head-tax restrictions in
our immigration laws should be eliminated or suspended, so far as
Mexican labor is concerned. We recommend that the commission call
this recommendation to the attention of the Director General of Rail¬
roads, the representatives of this state in congress, and the Immigration
— 26 —
Commissioner in the Department of Commerce and Labor. We also
recommend that the cooperation of the State Council of Defense be
sought in this matter.
Mexico, it is agreed, affords the nearest and best source of unskilled
railroad laborers to meet the additional requirements on our railroads.
There is the additional advantage that no repatriation difficulties enter
into the Mexican labor problem, since these laborers would be brought
into the country, as they have been in the past, by the railroads, used on
track work, then made available for farm labor in California,
Arizona, Nevada, Texas and other states not too far from the Mexican
border, and after their seasonal occupation in the United States has
ended they will again, and without cost to them, be returned by the
railroads to their home country. It is our opinion that the unskilled
railroad labor problem in a considerable part of the country will be
solved if the Mexicans are permitted to come in freely and if it is
made clear to those aliens that they need not fear compulsory drafting
into the United States armed forces. This fear, however ground¬
less, in addition to the impediments already mentioned, is now a
contributing cause to their staying away from this country.
The proposal made by several of the carriers that the bars against
Oriental labor be let down need not be further considered herein in
view of the availability of Mexican labor for railroad purposes.
We further recommend that this commission lend its aid in the
establishment of priority in the necessity of new public and private
construction requiring unskilled labor, as compared with the necessity
of the maintenance- and construction work that must be done on the
railroads. We believe it is a sound proposition that all public
improvements not essential to the prosecution of the war be stopped
at this time if the labor necessary to do such public work is more
needed for the railroads.. Incidentally, the elimination of such work
would have an additional effect on the railroad situation by the
release of equipment and cars that would be necessary to haul the
material required for such construction.
Related to this recommendation is another one: namely, that steam,
electric interurban, and street railways, as well as other public utilities,
should not be required at this time to live up to such of their franchise
stipulations as necessitate otherwise uncalled for new construction,
such as street paving in cities, replacement of existing T-rail with more
expensive girder rail, and similar items. The latter suggestion will, of
course, have its effect also on maintenance and capital expenditures
and consequently on the net earnings of the carriers.
We recommend that the commission address the appropriate state,
county, and city governmental authorities, inviting their cooperation
•with the program in the last two recommendations. AVe also suggest
that the commission offer its informal assistance in cases where, by
reason of franchise requirements, a city insists upon construction work
that is not essential and that would appear to interfere with the more
important work on the railroads. •
With regard to skilled labor, we recommend that the commission lend
its assistance to the suggestion that our universities, technical, and trade
schools he called upon to arrange during the present emergency their
courses of study by giving to students desiring it, in addition to school¬
room work, practical experience in the railroad shops. The railroads
ere willing to pay a reasonable compensation for such service. We agree
that not only would this be valuable experience for the young engineers
and technical students but it would also, to some extent at least, relieve
the very serious shortage of mechanics and engineers that is now felt
by the railroads in common with other industries. There might also be
the additional benefit to both the men and the carriers, as suggested by
some witnesses, that a good many men would be led to railroad work
as a permanent vocation. To bring about this recommendation wre sug¬
gest that the commission get in touch with universities and other tech¬
nical schools of the state and also with the labor organizations to secure,
if possible, their cooperation in this matter.
While we are making these suggestions with regard to the question
.of labor, we are impressed with the justice, and indeed the absolute
necessity, of the proposition that in all recommendations and actions
taken by any governmental body looking to the solving of any labor
problem, the wishes and needs of labor itself, irrespective of whether
this labor is organized or not, must be given full consideration. AVe are
convinced that any attempt to solve the labor problem on the railroads,
or anywhere else, "from above," or without a sympathetic under¬
standing of the point of view of labor, will not only not solve the
problem but will merely aggravate it.
Our recommendations as to remedies with reference to the shortage
of equipment and motive power are as follows:
The commandeering by the federal government, whenever it is neces¬
sary, of car and locomotive works; the establishing of priority by the
federal government as between the railroad requirements of the United
States and the orders for foreign allied governments and for other
industries in this and other countries. AVe consider this recommenda¬
tion general and one that might be brought to the attention of the
federal authorities as a suggestion of this commission.
Remedies íooking to greater efficiency of existing equipment are advo¬
cated by the railroads principally along lines of added penalties for the
shipper in order to enforce the prompt loading and unloading of cars;
— 28 —
and the taking away of privileges he now has in the matter of freight
switching, permission to reconsign, and similar privileges. It was pro¬
posed to tighten demurrage rules and to eliminate free time on account
of inclement weather, the right of the receiver of freight to have his
cars delivered on his own team tracks, and like measures.
The appointment of a director general of railroads has made unneces¬
sary any orders of this commission along these lines. Prior to gov¬
ernment operation, and during the period of War Board control, that
board theoretically issued its general orders on matters of this nature
from its central point of authority, Washington, to the individual rail¬
road companies throughout the country. Events proved that this
method was not effective and did not accomplish its purpose.
We believe that under the new direction of railroad operation, super¬
vision and control over matter indicated, in the last paragraph can be
better exercised through logical division headquarters, having no regard
to the ownership of individual lines, than under the present system
where such ownership still remains the dominant factor in the actual
and detailed operation of the transportation system. As an illustration :
the Southern Pacific Company's representative testified that during car
shortage if the company had orders for cars at Watsonville and at
Stockton, Watsonville, a noncompetitive point, would have been given
preference, on the assumption that the Southern Pacific Company com¬
petitor at Stockton would be able to take care of the needs up there. It
does not appear that the ability of the competitor to do this was con¬
sidered; and if this competitor had taken the same course, it is very clear
that noncompetitive points would have had an advantage over the cities
which have two or more railroads.
In regard to the suspension or reduction of reconsignment privilege,
it is unquestionable that this privilege is greatly abused. While there
are many eases in which the reconsignment privilege is of large value to
shippers, this occurs mainly in connection with perishable products ; and
there seems to bg no reason why this privilege should not be entirely
suspended so far as shipments of lumber and other nonperishables is
concerned.
It is evident from the record that jobbers and speculators especially
in the lumber trade, are in the habit of purchasing in carload lots with¬
out having a buyer for the product or a place in which to store it. Such
people abuse transportation facilities and use them as they would ware¬
houses or bargain counters. No undue hardship would result to any one
if such practice were made impossible. As far as perishables are con¬
cerned, it is customary for cars consigned to a destination which is over¬
stocked with a particular commodity to be diverted en route or, after
— 29 —
arrival, to some other locality. It does not seem desirable under any
condition to do away with this practice, although, the reconsignment
privilege can undoubtedly be reduced even in such cases. We recom¬
mend that the carriers make a study of this situation with a view to
bringing about a reduction of all reconsignment privileges to the lowest
possible minimum.
It is cur intention to recommend the joint use of team tracks by all
carriers which are able to reach such tracks, irrespective of ownership.
With unified control of operation this condition may come about auto¬
matically; but it is nevertheless a means of relieving congestion in ter¬
minals, and might profitably be made the subject of special instructions
from the Director General of Railroads.
The investigation developed the fact that the steam railroads of Cali¬
fornia thus far have been generally able to take care of all business
offered them. There are exceptions to this general statement, but as a
rule the congestion in the West other than that at terminals incident to
export business has not embarrassed the business of the community as it
has elsewhere. This is another way of saying that California transpor¬
tation facilities can probably be spared to a considerable extent to relieve
the acute situation in the East. During the course of the investigation
the attention of the commission was called to an order by the War
Board requisitioning a number of freight locomotives from the Southern
Pacific and Santa Fe lines for service on congested lines in the central
East. While there is no surplus of motive power and equipment in the
West, it is a fact that there is less shortage here than in the East and if
real unification is brought about a diversion from the West to the East
would help to relieve the situation.
It is from this point of view that the facilities of the carriers other
than steam roacls, and their ability to relieve the latter, were considered
in this proceeding. The hearings developed the fact that the steamer
lines of the state, especially those operating in inland waterways, the
interurban electric lines, the motor truck, and even the street ear lines,
are in a position to handle a very large amount of short-haul freight,
especially less than carload freight, that is now handled by the main
interstate roads. On the ability of the electric roads to give such relief,
the testimony of Mr. Paul Shoup, president of the Pacific Electric
Railway, was particularly illuminating. The Pacific Electric is the
third carrier in the state in the number of freight cars handled. This
company does a very large amount of switching to and from industry
tracks in and out of the city of Los Angeles; and it appears that
electric operation is superior to steam Operation in such service. One
of the chief advantages of electric operation seems to be the flexibility
of the service and the fact that motive power is used practically in the
— 30 —
proportion to tlie weight to be moved, and that consequently there is
much greater economy than in the case of steam locomotive.
We call attention to the matter of electric operation in terminal
freight service for the reason that the possibilities along this line seem
to be very large in almost every important city in the United States.
There is at this time practically no cooperation between the electric lines
and the steam lines in such localities, and we know of no intelligent
investigation that has been made to see what can be accomplished in
this direction. It is only in instances like that just mentioned, where the
Pacific Electric Railway is through ownership and operating agreements
intimately associated with an important steam line such as the Southern
Pacific, that reliable data can be had on the possibility of relief from
this source. We believe that this feature should be given careful con¬
sideration in the study of the Los Angeles terminal problem now being
made by the commission.
When the possible elimination of unnecessary passenger service is
considered it becomes evident at once that in almost all cases where
steam lines compete with electric interurban lines the latter can as a
rule render this service more satisfactorily, more economically, and as a
rule, altogether relieve the steam lines of such competing business. Mr.
Shoup testified that the Pacific Electric in the Los Angeles territory is
"now carrying all the Southern Pacific Company's passenger traffic
for them practically in the territories served by both lines. We
carry all their Pasadena, Long Beach, San Pedro, and Santa Monica
traffic, and their tickets are also good over practically all lines of
importance on the Pacific Electric. We are handling all their San
Bernardino and Riverside business for them. The subject has
been discussed with the Salt Lake, but no conclusion reached as to
making some such similar arrangement. The result has been very
satisfactory, I think, from the Southern Pacific point of view, and
has been quite acceptable from the Pacific Electric point of view.
The difficulties which might face the Santa Fe or Salt Lake would
be in transferring packages and baggage to our stations. In Los
Angeles, the principal transfer point, our cars run directly to the
Southern Pacific station. We do not run either to the Salt Lake or
to the Santa Fe station ; but with that one feature eliminated, we
should be able, assuming it is to the interest of the steam line to do
so, to take care of their traffic at common points locally. I know
of no reason why we should not. ' '
Now that we have unified railroad control, and operation has become a
question of mcst efficient service rather than largest possible net earnings
to individual lines, we agree altogether with Mr. Shoup's last sentence.
The savings in operating expenses, in man power, and in equipment
that can be made by a rearrangement of passenger service along such
lines, and without any impairment of the service to the public, is very
TABLE I.
California. Railroad Commission—Engineering Department.
Answers to Questionnaire of December 3, 1917, Sent to Steam and Electric Railroads. Case No. 1177.
GROUP I—PRINCIPAL STEAM ROADS
GROUP II—PRINCIPAL ELECTRIC ROADS
Ques¬
tion No.
1,2
31
32
7,8
9
10
12
13
14
15
16
17
19
20
21
22
23
24
Southern
Pacific Ry.
A. T. and
S. F. Ry.
Group A—Relative to the Condition of Roadway
and Track.
Section men and unskilled labor employed on—
November 15, 1915
November 15, 1916
November 15, 1917
Section men and unskilled labor short on—
November 15, 1917
Accidents and derailments —
(a) From all causes—
(b) Due to failure of track
(c) Due to failure of equipment
(d) Due to failure of track and equipment
Maintenance of way and structures for—
(a) Nine months ending September 30, 1915
(b) Nine months ending September 30, 1916
(c) Nine months ending September 30, 1917
Group b—Relative to the Condition of
Equipment.
enployed on car and
6,366
7,211
5,401
2,700
Aug., Sept.,
Oct., 1917
143
6
37
43
$5,711,543
5,926.316
5,815,491
Skilled labor
repairs-
November 15, 1915-
November 15, 1916-
November 15, 1917-
engine
Skilled labor short November 15, 1917
Maintenance of equipment for—
(a) Nine months ending September 30, 1915-
(b) Nine months ending September 30, 1916-
(c) Nine months ending September 30, 1917-
Engine failures—-
September, October, November, 1915
September, October, November, 1916
September, October, November, 1917
Engines shopped for ordinary repairs-
September, October, November, 1915 —
September, October, November, 1916
September, October, November, 1917
Engine repairs—complete or backshop—
(a) September, October, November, 1915-
(b) September, October, November, 1916.
(c) September, October, November, 1917-
Bad order freight ears out of service-
la) September, October, November, 1915-
Group C-
1915-
1916.
1917.
(b) September, October, November, 1916
(c) September, October, November, 1917
C—Relative to Freight and Passenger
Service.
Gross freight ton mileage
(a) September, October, November,
(b) September, October, November,
(c) September, October, November,
Passenger train mileage—
(a) September, October, November,
<b) September, October, November,
(e) September, October, November,
Discontinued nonessential passenger
Elimination of special equipment
Reduce local freight service
Suspension of inter-yard switching—
Reduce branch line service
Adopt interstate demurrage rules
1915
1916
1917
service—
25 Embargo on ocean-going freight if no cargo
space
Group d—ReUitive to Capital and Other
Expenditures.
Additions and betterments and new capital
expenditures—
(a)
(b)
(c)
Cost
(a)
• lb)
(c)
Year 1916
Year 1917
Estimated, 1918
of soliciting business.
Year 1915
Year 1916
Year 1917
8,771
9,248
10,481
483
$7,247,338
7,681,614
7,803,137
319
370
374
350
468
161
183
129
Pac. System
6,102
4,171
5,351
Pac. System
5,018,323,631
6,144,431,517
6,866,177,399
Pac. System
6,053,182
5,551,603
5,722,764
*
*
*
*
*
8 mos., 1917
$7,601,154
7,590,637
31,833,000
1,990,482
1,913,545
1,605,458
11 mos.
1,887
1,832
1,469
729
1917
1,471
92
393
485
$1,967,228
3,077,765
1,858,037
1,089
1,370
1,252
64
$2,156,980
2.610,878
3,192,522
284
209
167
427
394
414
42
60
45
981
1,031
872
875,618,872
1,038,672,636
1,204,366,549
1,235,408
1,162,699
1,161,412
. No
No
No
None
*
Abrogate
weather rule
Yes
$2,525,034
2,618,351
8,249,595 1
598,738
440^951
369,621
Western
Pacific Ry.
544
694
889
341
Nov., 1915,
1916,1917
48
11
10
21
$540,971
656,963
850,983
388
454
494
None
$227,904
244,588
307,052
18
15
26
132
140
156
16
22
22
84
251
427
2 mos. 1917
226,107,654
326,591,601
1259,578,815
511,954
337,428
345,853
None
No
No
None
No
Abrogate
weather rule
Yes
$$2,217,652
$2,217,652
126,894
128,533
105,611
North western
Pacific Ry.
Los Angeles and
Salt Lake Ry.
Totals for
steam roads
Pacific
Electric Ry.
Oakland. Antioch
and Eastern Ry.
S. F.,
Napa and
Calistoga
Ry.
Petaluma
and
Santa
Rosa Ry.
Northern
Electric
Ry.
Central
California
Traction
Co.
Totals for
electric
roads
*
308
$9,105
1,410
103
25
12
$
$1,550
511
294
10,542
1,445
129
25
15
201
31
1,846
286
300
8,345
1,240
99
15
7
165
17
1,54-3
175
385
4,330
200
20
18
7
60
19
324
11 mos. 1917
Oct. 1916, 1917
2 mos.T5,T6,'17
139
8
260
7
None
49
$
*
$316
None
46
6
None
7
*
*
$59
3
24
None
None
7
*
*
$31
37
3
70
6
None
14
*
*
1 tJ-L
$90
*
$276,179
$$8,495,921
$782,985
$69,984
$29,119
$11,152
*
*
$$893,240
$469,519
321,658
10,452,221
635,074
72,152
22,597
9,248
*
*
$739,071
512,258
366,432
9,403,201
648,496
81,860
17,891
9,048
$124,129
$27,298
908,722
*
112
$10,360
530
28
10
11
*
*
$579
252
131
11,455
587
29
9
9
*
*
$634
239
130
12,596
573
27
8
9
*
*
$617
30
32
609
6
2
4
2
*
*
$14
*
$417,428
$$10,049,650
$487,961
$24,829
$19,344
$15,946
*
*
$$548,080
$390,588
463,124
11,390,792
444,542
33,309
17,475
14,066
*
*
$509,392
409,437
484,555
12,196,703
494,151
47,862
15,972
16,-561
$78,951
$19,535
673,032
5
29
$336
17
9
*
1
*
*
$27
8
11
562
26
6
12
6
*
*
$50
$45
6
19
588
18
6
18
3
*
♦
56
20
1,009
108
35
1
1
*
❖
$145
90
21
995
109
35
1
6
*
*
$151
107
16
1,161
75
46
None
3
❖
*
$124
Includes in¬
spection.
None
5
224
6
11
None
None
*
$17
3
3
271
3
9
None
None
*
*
$12
None
1
197
2
6
1
None
❖
*
$11
Daily aver.
Exc. N. W. P.
Inc. foreign
No record
Av.
8.09
*
$7,167
1,136
Equip, in 1st
2 or 3
class cond.
ears
None
*
*
7.05
90
$5,543
1,733
None
*
*
8.52
70
$6,720
2,622
2 ea.mo.
*
*
47,290,281
385,415,007
6,552,755,445
*
104,048
81,739
334,663
*
$520,420
72,687,649
440,176,249
8,022,559,652
50,778,853
144,870
62,477
367,342
*
*
$51,353,542
76,387,335
466,052,445
$8,872,562,543
48,935,643
192,594
66,696
379,062
*
*
$49,573,995
279,268
565,587
8,645,399
*
415,347
74,216
97,097
*
$586,660
367,716
547,-530
7,966,976
6,183,874
369,546
70,509
97,578
*
*
$6,721,567
356,170
543,710
8,129,909
6,665,618
374,455
78,770
97,146
*
*
$7.215,989
Yes
No
*
No
No
No
None
No
None
No
None
None
Yes
No
*
No
No
No
None
None
None
None
None
No
No
No
Yes
Yes
None
No
Rcq. prompt
Yes
Yes
No delay
Do not
Cancel
louding
apply
rules
No
No
*
No shipments
Yes
Yes
$319,268
$594,346
$13,257,454
$$1,290,876
$38,673
$3,412
$7,611
*
*
$$1,340,572
427,395
2,302,572
15,156,607
$1,290,877
36,470
5,742
9,334
❖
♦
$1,342.423
763,000
1,445,000
$42,290,595
1,775,000
»Js
None
12,500
*
*
$1,787,500
*
387,947
$3,104,061
1,357
9,099
72
None
*
*
$10,528
58,069
391,822
2,932,920
1,216
10,665
36
None
*
*
$11.917
53,699
327,983
2,462,372
1,232
12,050
23
None
*
*
$13,305
REMARKS—Northwestern Pacific Railway omitted data for 1015 account expenditures for lin e Willits to Shively not included in operating expenses prior to June 30, 1915.
tTotals incomplete. *Not answered. J,Six months.
table ii.
california railroad commission—engineering department.
Earnint/s of Certain California Passenger Trains (Answers to Question No. IS). Case No. 1177.
Earnings per train mile In cents
1915
1!)1B
>
1ÍI16
1017
I
z
c
ra
c*
o
■CJ
December
»
3
po
a
J*
February
i—
5»
s*
tie
•a
i
i
■
S
P
1
1
:
5
ra i
i i
i
'<
1
1
»
£
Ü
1
J' 1
&
tl
1 ?
G
c
a
•-i
i
V,
% 1
B
1
rt o
"3
s ta
5 P
7.
z
O
■et
O
5
ira
•-s
December
B
V*
ra
p
>
1
i»*
P
*
!
ra
i
i
ct
1
1.
1
'¿e
*3
ai
i
September
C
ra
y.
C
ti
g
ra
n
IC ^
»
G Uí
I»
ta
i
I. Southern Pacific.
(a) Overland Limited, No. 1 _ _ _
108
64
84
72
46
61
90
89
87
56
74
78
76
99
84
107
80
70
.
94
97
105
91
105
99
93
Overland Limited, No. 2
73
70
57
75
103
86
99
81
79
97
8-1
64
81
84
103
69
105
160
99
116
90
86
140
131
111
108
(b) Sunset Limited, No. 101 _ - -
100
132
122
113
91
94
161
164
175
155
154
146
134
204
156
168
147
123
122
122
124
117
134
123
116
138
Sunset Limited, No. 102 _ .. _
215
156
163
162
155
146
212
180
184
223
200
193
182
240
157
194
185
190
159
146
133
163
208
194
217
183
(e) Shasta Limited. No. 11 _. --
147
130
120
124
116
104
172
123
180
144
154
171
140
209
177
182
134
127
178
142
141
203
216
215
230
180
Shasta Limited, No. 12 - .. _ _
137
80
92
137
129
121
123
121
127
112
115
94
116
116
182
169
191
205
185
164
165
155
135
162
122
163
(d) Lark No. 75 _ ._ .
939
205
210
247
236
207
282
334
323
276
266
262
257
248
298
288
332
297
285
302
343
364
333
373
321
315
Lark, No. 76
25/
192
145
191
149
223
143
209
1.39
229
142
245
157
263
155
322
155
321
143
314
153
288
131
255
150
345
172
281
184
285
172
302
166
322
200
277
170
273
157
337
152
341
160
402
164
365
154
321
155
320
167
Owl, No. 26 - -
181
144
152
123
121
117
131
110
157
190
195
181
150
223
205
168
168
157
145
132
146
147
177
177
164
167
(f) Fresno Flyer, No. 51
Fresno Flyer, No. 52.
217
75
209
51
179
48
185
56
197
63
229
47
247
69
257
75
237
101
214
99
263
58
215
73
221
68
254
76
230
58
211
61
196
56
218
63
228
79
244
78
261
78
279
117
257
101
268
97
195
75
237
18
(g) El Dorado, No. 47 - ...
185
,84
115
94
131
113
142
160
202
136
147
140
137
_ „
131
142
124
143
162
157
154
254
214
209
192
179
172
El Dorado, No. 48 .. - -
191
158
161
166
197
180
208
185
220
242
219
220
196
204
197
210
225
235
257
227
232
277
319
231
245
233
(h) Statesman, No, 21 _
172
135
128
131
142
129
154
178
179
171
179
185
157
180
145
170
166
177
157
157
194
221
209
239
181
183
Statesman, No. 22 . - -
152
110
117
108
151
130
158
126
153
138
126
136
134
124
122
124
137
157
185
162
166
192
182
129
135
151
(i) Stockton Fiver No. 79 .
116
92
74
89
91
100
128
136
110
106
116
118
106
84
90
116
97
118
115
110
133
117
109
109
103
108
Stockton Flyer, No. 80 ..
162
143
146
100
128
133
151
151
151
132
113
124
136
165
127
117
117
112
120
118
121
110
118
133
85
120
Average earnings - -- -
162
128
128
130
136
132
163
160
175
164
163
•
157
150
176
163
163
164
172
167
161
176
187
195
189
170
171
ii. Atchison, Topeka and Santa Fe Railway.
(a) California Limited, No. 3 . . .. _
96
111
111
97
112
155
238
179
139
159
184
195
148
202
232
233
202
157
163
204
192
160
200
223
210
198
California Limited, No. 4 . _ . _ __
! 114
1
55
65
93
157
185
173
140
152
201
157
96
132
120
117
153
202
199
184
182
133
162
236
166
112
164
140
31
97
175
74
130
184
210
115
170
74
70
151
57
77
36
130
192
197
139
(e) Saint. No. 15
86
79
91
97
94
107
102
105
87
80
73
82
77
98
ICO
110
112
99
125
131
166
169
118
119
119
(d) Angel, No. 16
148
91
92
107
109
103
110
105
114
121
111
97
109
110
120
111
115
118
130
181
173
206
166
174
140
145
(e) Navajo, No. 21 . .. ..
120
19,3
117
112
125
110
128
138
122
139
155
149
128
149
136
120
126
106
112
133
139
139
157
160
159
136
(f) Missionary, No. 22. ..... .
152
108
98
120
130
133
116
120
122
131
117
96
123
107
104
106
133
146
142
115
108
132
143
159
126
127
Average earnings ....
119
94
101
96
126
120
151
131
126
140
134
118
116
128
142
134
142
147
117
157
146
161
178
167
144
150
Iir. Western Pacific Railway.
No. 1 _.
74
69
45
53
69
74
118
143
149
127
124
105
95
103
85
64
72
102
89
124
154
187
171
161
142
121
No. 3 .. ..
48
30
28
33
42
52
71
69
76
71
72
69
55
81
65
43
40
122
100
103
106
94
102
112
80
87
No. 2
94
45
, 59
113
104
130
162
137
162
119
88
67
107
72
61
84
159
1S7
154
151
134
178
151
124
90
129
No. 4
47
25
26
48
59
00
70
71
78
56
46
42
52
42
42
46
67
71
68
86
82
88
82
63
59
66
Average earnings ... ...... .....
66
40
40
62
68
79
105
105
116
93
82
71
77
74
63
59
84
120
103
116
119
137
126
115
93
IUI
IV. Los Angeles and Salt Lake Railway.
Los Angeles Limited—westbound
160
174
171
128
112
108
114
180
186
189
188
208
160
229
220
238
180
139
123
146
189
202
213
233
217
197
Los Angeles Limited—eastbound ... ...
121
142
86
108
185
223
183
181
151
178
177
131
156
95
100
117
154
205
277
225
199
179
238
201
158
179
Average earnings .. .. .. . ..
140
158
198
118
148
166
148
180
168
184
182
170
158
162
160
178
167
172
200
186
194
190
226
217
202
188
Average earnings all trains .
140
109
110
114
127
123
154
148
1,58
151
146
136
135
152
146
143
149
161
155
156
163
178
184
176
153
160
— 31 —
large. It is evident that the same condition exists in all of the large
communities qf the country where interurban electric roads comp et«
with so-called commutation steam passenger service.
It is our recommendation that in the case of the Los Angeles territory
the commission ask the steam lines concerned immediately to institute a
survey with a view to determining to what extent the Pacific Electric
can furnish the necessary passenger service in the territory affected
and to what extent competing steam line passenger service should be
eliminated. If necessary, authority to make such a survey and the
recommendation into effect should be secured from the Director General
of Railroads.
Question 32 of the inquiry sent to the carriers dealt with the cost of
soliciting business. While the figures returned by the carriers are not
complete and are not so arranged as to permit of finding the total cost
of soliciting business in any one territory, they nevertheless lead to the
conclusion that the item of advertising alone runs into millions. It was
our purpose even prior to the taking over of the railroads by the federal
government, to recommend to the commission that steps be taken to
eliminate to the largest possible extent all traffic expenses resulting from
the cost of securing competitive business. It seems to us a peculiarly
indefensible waste of energy and money to expend large sums in efforts
to get more business when, as a matter of fact, many carriers were
unable properly to handle such business as was offered to them. Now
that competitive operation is a thing of the past, such expenditures are
altogether unwarranted. How considerable an item this is will be
apparent from the summary of the Interstate Commerce Commission's
statistics of revenue and expenses of the large steam roads in the United
States for the year ending June 30, 1916, where it is shown that "traffic
expenses," which include only expenditures for advertising, soliciting,
and securing traffic and for preparing and distributing tariffs govern¬
ing such traffie, aggregated $60,604,496.00. There is no doubt in our
minds that at least 75 per cent of this expenditure can now be eliminated
without any impairment of the efficiency and convenience of the trans¬
portation service.
In view of the present status of railway control we recommend that
the commission take up informally with the railroads and all other
parties interested in this proceeding, such of the recommendations made
by us as may appear to be useful in bringing about complete national
control and the highest possible efficiency of the transportation system
during this emergency. In cases where the authority of the Director
General of Railroads should be had before any of the recommendations
can be acted upon, such authority should be secured and the results of
this investigation and our report made available to him.
— 32 —
We believe that this proceeding should not be dismissed at this time
but that it should be kept open for such further action as may be deemed
advisable by the commission.
ORDER.
The commission having on its own initiative instituted an investiga¬
tion into the services and maintenance and the economies of operation of
transportation companies in California, during the emergency created
by the war ; and public hearings having been held ; and testimony hav¬
ing been submitted,
It is hereby ordered that the recommendations and suggestions m the
foregoing opinion be called to the attention of the parties referred to,
and that the proceeding be continued for such further action as may
appear desirable to the commission.
The foregoing statement, opinion and order are hereby approved and
ordered filed as the opinion and order of the Railroad Commission of the
state of California.
Dated at San Francisco, California, this ninth day of February, 1918.