PASSENGER FARES ON AMERICAN RAILWAYS ALSO ON THOSE OF GREAT BRITAIN AND GERMANY WITH SPECIAL REFERENCE TO THE AGITATION FOR A TWO CENT MAXIMUM FARE PREPARED FOR THE GENERAL MANAGERS' ASSOCIATION OF CHICAGO BY SLASON THOMPSON BUREAU OF RAILWAY NEWS CHICAGO : GUNTHORP-WARRKN PRINTING COMPANY 1906 //E/757 CONTENTS. Page. Introductory 3 Passenger Service not Self-Sustaining 4 What the Past Has Proved 5 Passenger Earnings and Cost, 1888-1893 6 Proportion of Passenger Business to the Whole 8 Receipts and Cost by Groups, 1893 9 Increased Cost of Passenger Service 10 " " " Equipment 11 " " for Labor '. . 11 Earnings of Passenger Service in 1904 11 Cost of " , " " " 12 Why the 2-cent Rate is Impracticable 13 Average Number of Passengers in Train 13 Revenue of Passenger Trains per Train Mile 13 Cost of Running a Train One Mile 14 Why Passenger Traffic in America is Unprofitable 15 American and European Conditions Compared 15 Area, Population and Railway Mileage in the United States and Europe. . 16 Population per Square Mile of European Countries 17 and Railway Mileage per Capita in the United States 18 Passenger Conditions in Eastern States 19 " " in Western States '. 20 in Group VI 21 " " in New England Group 22 in Illinois* ?.,,,... v ............ 4 23 How Passenger Traffic Obstructs .Freight. TV&tfie J.I .t 25 Passenger Fares in America and 'England' ,.*.!.?..*...; 26 Passenger Conditions in .Germain ...'.'. : '.,'.' ..;..-.. .. 27 " Fares in Germany:.:*;./.; '..t . .".; i; ./-\ v / 28 " Cars in Germany .**?.*..?.?. 29 " Statistics for Germany 30 Cost of German Railways 31 " " American Railways 31 Conclusions 32 Addenda A Increase in Frequency and Speed of Passenger Service in Wisconsin 34 Increased Passenger Service between Chicago and Milwaukee 36 Passenger Fares on American Railways. INTRODUCTORY. In the following paper it is assumed as indisputable: That the general prosperity, convenience and happiness of the American people are inseparably interdependent on efficient, accessible and prosperous railway service; That the public scattered over 3,000,000 square miles of terri- tory cannot expect efficient, accessible and adequate service from unprofitable railways; That to be profitable and progressive railways must earn suffici- ent income not only to pay expenses of operation, but to provide sufficient net income to pay taxes and a reasonable return on capital actually invested; That low freight rates are the first essential requirement of American railways in order to facilitate the interchange of the com- mon commodities of commerce and civilized existence in other words, that it is more necessary that all the people should be fed and clad in summer and housed and heated in winter than that a minority of them should travel; That the present average passenger receipts of 2 cents per mile is a mean arrived at through averaging down regular fares by the sale of commutation and mileage tickets, excursion rates to fairs, conven- tions, conferences, and other special inducements to frequent trips and full trains; That if it can be demonstrated that this mean fare does not pro- vide sufficient income to make the railways reasonably profitable; the establishment of that mean as a maximum passenger rate would not only work disaster to the railways, but to the whole country. That state legislatures cannot impose passenger rates below the remunerative level on the theory that the railways can make up the deficiency on intrastate passenger business either from domestic freight or interstate passenger traffic. PASSENGER SERVICE NOT SELF-SUSTAINING. Although it is incapable of positive proof, it is probably a fact that the passenger traffic of American railways is carried on at the expense of the freight traffic. Freight traffic can be, and is made to pay on low rates, because it can be moved regularly in minimum car lots. Passenger traffic cannot be obtained in car lots or 20 per cent, car lots with any degree of uniformity, except in densely peopled dis- tricts; and even in these the majority of passenger cars, starting packed, arrive at their destination practically empty, or starting empty only fill up as they approach terminals. In spite of this there is a widespread agitation, rising to the dignity of legislation in some states, demanding that the fare be re- duced to a maximum of 2 cents per mile. This agitation very largely rests on a popular misapprehension that what the railways receive as an average per mile they could, under legislative pressure, afford to adopt as a maximum rate. Whereas, under a 2 cent maximum, railways could only prevent a crippling loss by reducing the frequency and speed of trains and greatly restricting their special service to the public. WHAT THE PAST HAS PROVED. For eighteen years, or ever since the Interstate Commerce law went into effect, the receipts per passenger mile in the United States have averaged 2.058 cents. This is only .052 of a cent above the rate in 1903 and 1904. During the twelve years since, and including 1894, the rate per passenger mile has averaged 1.999, or an infinitesimal fraction under the 2 cents, which it is now proposed to establish as a maximum. While it may not be possible to demonstrate from any official data that average earnings of 2 cents per passenger mile do not cover the average cost of carrying passengers one mile, there is sufficient official justification for the assertion that the margin between the two is so small as to leave an inadequate sum for taxes, fixed charges, and necessary renewals, to say nothing of dividends. In the First Annual Report of the Statistician of the Interstate Commerce Commission, dated March 1, 1889, Prof. Henry C. Adams, who still occupies that post, said: "The question which arises in connection with the apportion- ment of expenses between passenger and freight service is one that cannot be determined with such confidence. One point only re- specting it lies beyond the limit of reasonable controversy, and that is, that such apportionment must in some manner be made. Not only is this demanded in the interest of comparative statistics, but it is of great importance for an intelligent judgment on relative freight and passenger charges. * * * " The rule adopted by the Commission in its book of instructions for the guidance of carriers in making their annual reports, is as follows : ' 'All expenses which are naturally chargeable to either freight or passenger traffic should be entered in their respective columns; ex- penses which are not naturally chargeable to either traffic should be apportioned on a mileage basis, making the division as between freight and passenger traffic in the proportion which the freight and passenger train mileage bears to the total mileage of trains earning : : / \ ; : 6 Under this rule, for six years the Commission apportioned the earnings and expenses per passenger and ton mile as follows: PASSENGER TRAFFIC. FREIGHT TRAFFIC. 1888 Earnings per mile cents. 2 349 Expenses per mile cents. 2 042 Earnings per mile cents. 1 001 Expenses per mile cents. 630 1889 2 165 1 993 922 593 1890 2 167 1 917 941 604 1891 2 142 1 910 895 583 1892 2.126 1 939 898 582 1893.. 2.108 1.955 .878 .579 This table demonstrates that the ratio of cost of carrying passengers one mile, which in 1888 was approximated at 87 per cent, of the receipts per passenger mile had risen to nearly 93 per cent, in 1893, when the Commission, perceiving the inevitable tendency of its rule would soon show that the average cost exceeded the receipts, abandoned any attempt at an apportionment which in 1888 it solemnly said "must in some manner be made." The decline noticeable in the expenses of passenger service before 1891 has been permanently checked by the increased cost of everything entering into that service. Trains have been multiplied; their speed almost doubled; their comforts and accommodations improved; over 50 per cent, more double track has been provided; block signals protect passengers train on 50,087 miles where the block system was scarcely known fifteen years ago and all this without any proportionate increase in the number of passengers per train or per car. As the Railway Commissioners of Iowa in their report for 1904 said, "The people of Iowa are constantly and rightfully demanding better service of the railways; they are requiring better equipments, better road-beds, better farm and highway crossings, and a better system of railway generally." And it should be added, the people, of Iowa are getting what they require without any signs of reciprocal concessions to railways in the matter of reasonable fares and just rates. The working co-efficient that is, the proportion of expenses to earnings of railways operating in Iowa in 1904 was 74.87 per cent., while that of the same railways for their entire lines was only 66.04. These figures would indicate that "the Iowa idea" in regard to rate regulation had already transgressed the prohibition of the Supreme Court of the United States that " The state cannot justify unreason- ably low rates for domestic transportation, considered alone, upon the ground that the carrier is earning large profits on its interstate business, over which, so far as rates are concerned, it has no control." At present, it looks as if their reasonably profitable interstate business were all that enables Iowa railways to do business in Iowa. According to the table just given, if to the cost of operating per passenger mile in 1893 there had been added a proportionate share of the taxes, virtually nothing would have been left for interest on funded debt. It will also be perceived that the estimated cost per ton mile for freight absorbed only 63 per cent, of the freight earnings in 1888 and less than 66 per cent, in 1893, the co-efficient in the freight busi- ness permitting a reasonable margin to take care of taxes, and other fixed charges and contribute something to make up the deficit on passenger traffic. PROPORTION OF PASSENGER BUSINESS TO THE WHOLE. trustworthy rule exists for making the assignment" of cost between passenger and freight service, which he did in 1893, he had produced the following official estimates of the proportion of earnings and ex- penses assignable to either service: PASSENGER SERVICE. FREIGHT SERVICE. Proportion of Proportion of Earnings. Expenses. Earnings. Expenses. 1890 29.41 33.52 68.23 66.38 1891 30.37 34.08 67.45 65.92 1892 29.16 33.49 68.58 66.51 1893 29.49 33.85 68.23 66.15 If the "rule" had been trustworthy, here was a demonstration that the passenger service was costing more than its clue proportion of the operating expenses. It is noteworthy that in 1904 the proportion of the earnings of the passenger service to the total earnings, was only 27.42 per cent against 70.05 per cent, for the freight service. If the proportion of the expense of passenger service to the whole is practically one-third , as was officially estimated in 1893, the disproportion of its income now is nearly 50 per cent, greater. It should be noted that receipts from "mail, express and other earnings" are included under the term passenger service. In 1904 the proportion of total earnings received from passengers alone was only 22.50, and not since 1896 has it been above 23 per cent. Before that it ranged between 24.48 and 26.58 per cent., which indicates that proportionately the passenger revenue of the railways is less to-day than it was ten years ago. How greatly the remunerative character of the passenger service varies with the different physical and traffic conditions prevailing throughout the United States is shown in the following statement of the results by groups as to the earnings and expenses of the pass- enger service in 1893, compared with the earnings for 1904: Territory Covered. Group I Revenue per Passeng per Mile Cents. 1 890 1893. Average cost of carrying er One Passenger ;. One Mile. Cents. 1.435 1904. Revenue per Passenger per Mile. Cents. 1.787 Group II 1.939 1.764 d 1.751 Group III 2 076 1 923 2 008 Group IV . . . . 2 406 2.314 2 371 Group V 2.435 x 2.581 d 2.365 Group VI 2 206 2 003 2 086 Group VII 2 458 x 2 609 d 2 137 Group VIII 2.249 x 2.499 d 2 . 283 Group IX 2.413 x 2.463 d 2.319 Group X 2 298 2 155 d 2 068 1.955 2.006 United States . . w 2 . 108 x Exceeds revenue per passenger mile. d Less than cost of carrying passengers one mile in 1893. According to this statement in no less than four of these groups the average cost of carrying a passenger one mile was greater than the revenue per passenger mile. These groups are: V. Composed of Kentucky, Tennessee, Georgia, Alabama, Mississippi and Florida. VII. Composed of Montana, Wyoming, Nebraska and parts of Colorado and the Dakotas. VIII. Composed of Kansas, Arkansas, Oklahoma, Indian Territory, and parts of Missouri, Colorado and New Mexico, and IX. Composed of Louisiana, Texas, and a part of New Mexico. In striking contrast to these groups of unremunerative passenger revenue territory, stands group I, which in 1893 had, and probably to-day has, a substantial margin between the average receipts and cost of its passenger service per mile. This group is composed of the New England States and is possessed of an average density of popula- tion, which makes low passenger fares consistent with reasonable remuneration to the carrier. On comparing the average revenue per passenger mile in 1904 with what was the estimated cost of carrying a passenger one mile in 1893, it will be seen that in six groups the cost exceeds such aver- age earnings, while the excess of earnings per passenger mile in three other groups is so slight as to leave an insufficient margin for taxes and other fixed charges. Therefore, if the cost of carrying passengers has not been ma- terially reduced since 1893, the conclusion is unavoidable that the passenger traffic of the railways of the United States as a whole is unremunerative, and a maximum rate of 2 cents a mile would not only be unreasonable but actually confiscatory. 10 INCREASED COST OF PASSENGER TRAFFIC. Instead of a decrease in the cost of passenger traffic since 1893, the public demand for higher speed, additional trains, more con- veniences, and greater safety, has actually advanced the expense beyond what it was when the Interstate Commerce Commission estimated it as 1.955 cents per passenger mile. The safety, comfort and convenience of the traveling public continuously demand that railways expend liberal sums in putting their service on the most efficient and safe basis. To do this lines must be double-tracked, bridges and culverts must be strengthened, heavier rails laid, road beds remade, interlocking switches installed, block signals introduced, dangerous grade crossings abolished, and passenger cars must be stronger, better lighted, heated and ven- tilated. As an instance of what the railways are doing to meet the public demand for safer and more expeditious passenger service, it may be mentioned that over $32,000,000 has been spent on track elevation in Chicago since 1893, and that before this great work is completed, it will cost the roads centering here fully $30,000,000 more. Compliance with such demands is more important than cheap fares, and yet it is proposed to make the instalment of these improve- ments more difficult, if not impracticable, by curtailing the income of the railways from the very service in whose interest the expendi- tures are most clamorously demanded. What has been done in the matter of increasing the speed and frequency of passenger trains is illustrated by concrete examples in Addenda "A," which gives a summary prepared by officials of the Chicago and North Western Railway of the number and speed of the trains over the Wisconsin division of that line for the years 1890 and 1905. These show an increase in frequency of passenger facilities, offrom25to 133 per cent, and in average speed from five per cent. up to nearly 40 per cent. What is true of this one line in Wisconsin has been duplicated all over the United States wherever conditions have invited additional transportation facilities. 11 Aside altogether from the indivisible expenditures involved in making the improvements, partly enumerated above, where the cost cannot be apportioned between passenger and freight traffic, there has been a striking advance in the cost of the equipment, material and labor directly chargeable to the passenger service. The following table shows the increased initial cost of the equip- ment employed in passenger service : 1893 1906 Average Average Increase Cost. Cost. per cent. Passenger locomotives $9,800 $20,000 104 Passenger coaches 5,400 9,000 66 Mail Cars 3,900 7,500 92 Baggage cars 3,100 7,000 93 Almost incredible as these advances appear, they are based on the actual purchases of a great western system during the years in question. The wages of the men directly employed in the operation of trains show the following increases: AVERAGE DAILY COMPENSATION. Increase 1893 1905 per cent. Enginemen $3 . 66 $4.16 13.6 Firemen 2.04 2.39 17.2 Conductors 3.08 3.54 15.0 Trainmen 1.91 2.31 21.0 The wages of all other employes concerned in the movement of passenger trains show proportionate advances. Coincident with this noteworthy advance in the wages of train crews, the number of this class of railway employes has increased from 179,636 in 1893 to approximately 262,000 in 1905, or 45.8 per cent. In 1904 fuel for locomotives cost $158,948,883 or 15.8 cents per train mile against only $74,122,846 or 9.6 cents per train mile in 1894, the first year the official statistics give figures on the cost of fuel. In 1904 the gross earnings of the passenger service were as fol- lows: Proportion to Amount. Total Earnings. Passenger revenue $ 444,326,991 22 . 50 Mail 44,499,732 2.25 Express 41,875,636 2. 12 Other earnings passenger service 10,914,746 .55 $ 541,617,105 27.42 12 Computed from official statistics on a basis of ascertained dis- tribution of a representative western system, whose passenger earn- ings in 1904 were 27.41 per cent, of its total earnings, or almost pre- cisely the same proportion as for all the railways of the country the cost of this service was approximately as follows: COST ASSIGNED TO PASSENGER SERVICE. Maintenance of way and structures (45 per cent, of whole) . . . $117,389,000 Maintenance of equipment (30 per cent, of whole) 80,057,000 Transportation Fuel (27 per cent.) 42,915,000 Locomotive water and supplies (27 per cent.) 4,770,000 Wages (34 per cent.) 92,339,000 Train Supplies (50 per cent.) 10,388,000 Station service and supplies (50 per cent.) 48,350,000 Telegraph expenses (50 per cent.) 11,681,000 Advertising 5,937,000 All other items (34 per cent.) 55,200,000 General expense (50 per cent.) TOTAL (37.1 per cent, of whole) . Taxes (37. 1 per cent, of whole) . . $271,580,000 25,689,000 $494,715,000 22,877,000 $517,692,000 Here is convincing evidence that the income from passengers alone does not come within $73,000,000 of meeting the expense of the passenger service, while the combined revenue from passengers mail, express, etc., exceeds the cost of operation by only $23,925,105. This sum is equal to slightly over one per cent on one-third of the funded debt of the railways of the United States, with nothing for dividends on an equal proportion of capital stock. Clearly, if the railways had to depend on the passenger service to pay interest on capital investment the majority of them would be forced into receiverships. 13 WHY THE 2 CENT RATE IS IMPRACTICABLE. This brings us to the very crux of the conditions which render a reduction of the maximum passenger rate to a 2 cents per mile basis impracticable as well as confiscatory. In the face of greatly increased initial cost for material and equipment directly chargeable to passenger account, and of every item in the operation of passenger trains, especially in wages and fuel; with more and faster trains constantly demanded by the public, the average number of passengers per train has remained practically unchanged. On this point the testimony of the following official record would seem to be convincing: AVERAGE NUMBER OF PASSENGERS IN TRAIN. Passengers Passengers per train. per train. 1893 42 1899 41 1894 44 1900 41 1895 38 1901 42 1896 39 1902 45 1897 37 1903 46 1898 39 1904 46 In 1904 there were only four more passengers per train than in 1893, and only two more than in 1894, an increase of less than 10 per cent, in the former comparison and less than 4.6 percent, in the latter instance. Confirmatory of the lesson of this statement are the following figures of the Interstate Commerce Commission showing the revenue per train mile of passenger trains since the Commission began pub- lishing its statistics : REVENUE PER T Per Year. M 1888 $ RAIN MlL] Train ile. L.14 .06 .08 .06 .07 .07 .05 .97 .99 E OF PASSENGER TRAINS. Per Train Year. Mile. 1897 K 94 1889 1898 . 1899 97 1 02 1890 1891 1900 1901 1.01 1 03 1892 1893 1902 1 08 1894 1903 1 12 1895 1904 1 14 1896.. Here is practical proof that almost the entire increase in pass- enger earnings, since 1888, per mile of road opearted has come from 14 additional passenger trains and not from an increase in the earnings per train. Moreover, the above figures include earnings of pass- enger trains from mail, express, etc., which have increased in a greater ratio than earnings from passengers alone. Since .1890 earnings from passengers have increased 70 per cent., from mail 90 per cent., from express 106 per cent., from other passenger train service 120 per cent., and from all passenger train service 75 per cent. During this period the official statistics show that the average cost of running all trains has been as follows: AVERAGE COST OF RUNNING A TRAIN ONE MILE. (All Trains.) Cost per Cost per train mile. train mile. 1890 $0.96.006 1898 $0.95.635 1891 0.95.707 1899 0.98.390 1892 0.96.580 1900 1.07.288 1 1893 0.97.272 1901 1.12.292 1894 0.93.478 1902 1.17.960 1895 1.18.693 1903 1.26.604 1896 0.93.838 1904 1.31.375 1897 0.95.635 Here is an increase of nearly 37 per cent, in the average cost of running all trains. What proportion of this should be assigned to the increased expense attending the operation of passenger trains cannot be determined, but the cited facts in regard to'wages and fuel indicate that it must be at least 20 per cent, or double the increase in the number qf passengers per train. Unfortunately for the railways the increase of passengers per train does not meet this increase in the cost of the passenger service. Nor does the promise of passenger traffic, outside of the more densely inhabited territories in the Eastern states, and in the immediate vicinity of large cities in the West, warrant the belief that passenger traffic will become more profitable in the near future. 15 WHY PASSENGER TRAFFIC IN AMERICA IS UNPROFITABLE. The cheap passenger fares on European railways are always cited as an argument why there should be a reduction in passenger fares in the United States. There are two controlling reasons why the example does not apply. 1. The cost and superiority of the service here, and 2. The absence of the density of population necessary to fill passenger cars in paying numbers. The fundamental distinction between passenger and freight transportation that " goods are shipped, while men travel of their own volition," long ago determined that American railways should receive their chief income from freight. We had the freight and the necessity of moving it long distances at low prices. How the rail- ways responded to the necessities of the freight situation is told in two lines: Receipts per ton mile. Average train load. Mills. . Tons. 1893 8.78 183.97 1904 7.80 307.76 If the comparison were carried back five years and were brought down to 1905 the achievement of doubling the train load and reduc- ing the rate one-quarter would be the amazing record of American railway management. The economies necessary to this achievement made possible by doubling the capacity of freight cars, quadrupling the tractive power of locomotives, and practically reconstructing many lines have involved additional capital expenditures amounting to about $2,000,000,000 in eleven years, allowing three-quarters of a billion on passenger account. AMERICAN AND EUROPEAN CONDITIONS COMPARED. As has been said, the American people had the freight to ship, and the railways met the demand with ever-increasing efficiency at ever-decreasing rates. In England and Europe the transportation of passengers who presented themselves in car lots, so to speak, was the foremost con- sideration of the railways. 16 It was a case of catering to the most pressing traffic in both instances. They had the people in paying numbers and we did not. We had the goods in paying quantities if we could only furnish the transportation facilities at low figures. Although the population of the United States is less than one- quarter that of Europe, its freight ton mileage is more than double. On the other hand, the passenger mileage in the United States is less than half that of Europe. With 15 per cent, less railway mileage there than in America, European railways carried more than five times as many passengers. Every transportation authority in the world recognizes that cheap passenger fares must be preceded by an actual density of traveling population. The statistical difference between conditions in Europe and the United States is shown in the accompanying table giving the relation of railway mileage to area and population in the United States and various countries of Europe. RELATIVE AREA, POPULATION AND RAILWAY MILEAGE IN THE UNITED STATES AND EUROPE: From Archiv fur Eisenbahnwesen. United States Germany Austro-Hungary (in- cluding Bosnia and Herzegovna) Area, Popula- square tion miles, (thousands) 2.993,480 78,595 EUROPE. 208,770 56,367 261,210 47,118 121,240 41,450 207,110 38,962 2,081,170 105,542 110,660 32,475 11,390 6,684 13,750 5,341 15,990 3,325 191,860 17,961 35,750 5,429 14,870 2,449 124,450 2,221 172,940 5,136 18,650 2,494 50,700 5,913 24,980 2,434 103,090 9,824 420 372 Railway mileage 1903. 207,935 33,819 24,120 22,461 28,102 33,093 9,966 4,237 2,095 2,575 8,606 1,487 1,963 1,456 7,697 359 1,974 643 1,952 68 Miles of Railway, per 100 Per 10,000 square inhab- miles. itants. 6.9 26.5 }6.2 6.0 9.2 5.1 18.5 5.4 13.6 7.2 1.6 3.1 9.0 3.1 37.2 6.3 15.2 4.1 16.1 7.7 4.5 4.8 4.2 2.7 13.2 8.0 1.2 6.6 4.5 15.0 1.9 1.4 3.9 3.3 2.6 2.6 1.9 2.0 16.3 1.8 Great Britain and Ire- land France Russia, in Europe and Finland Italy Belgium Netherlands and Luxen- burg Switzerland Spain Portugal Denmark Norway Sweden Servia Romania Greece Turkey in Europe, Bul- garia and Romania . Malta, Jersey, Isle of Man Total for Europe' .... 3,769,000 391,507 186,681 5.0 4.8 17 In its bearing on the subject of passenger rates, the most signifi- cant feature of this table is the showing that we have 26.5 miles of railway line per 10,000 inhabitants to Europe's 4.8 miles. This means that we have five and one-half times more railway mileage per capita than Europe, or, to put it another way, they have five and one-half times greater density of possible passenger patronage than we have. Nor would the exclusion of Russia from the totals for Europe in this instance alter the force of the comparison to an appreciable degree. Europe, exclusive of Russia, has only 5.4 miles of railway per 10,000 inhabitants to 26.5 miles in the United States. In connection with the above table, showing the relation of railway mileage to area and population, the student must not lose sight of the relation of population to area shown in the following summary of population per square mile: Population per square mile. Germany 270 Austro-Hungary 180 France 188 Great Britain and Ireland 342 Russia in Europe 50 Italy 293 Belgium 587 Netherlands 388 Switzerland 207 Spain 93 Portugal 151 Denmark 164 Norway 18 Sweden 29 Romania 116 Turkey 95 All Europe 104 Europe, excluding Russia 169 UNITED STATES POPULATION PER SQUARE MILE ... 26 From the above tables it will be perceived that Belgium, with its 587 inhabitants per square mile, its 37.2 miles of railway per 100 square miles, and its 6.3 miles of railway per 10,000 inhabitants, possesses, in a peculiar degree, the conditions that must concur to make passenger traffic both cheap and profitable. Contrast these conditions with those prevailing in the United States, where we have only 26 inhabitants to the square mile, with nearly 7 miles of railway per 100 square miles, and 26.5 miles per 10,000 inhabitants, and no other explanation is needed why .pass- enger rates in the United States are nominally double those in Bel- gium unless it be that railway wages average three times higher in the United States than in Belgium. 18 RAILWAYS AND POPULATION IN THE SEVERAL STATES' If, as has been shown, the population density of Europe with its potentialities for remunerative passenger traffic averages five and one-half times greater than in the United States as a whole, the con- trast as to pariticular localities is emphasized in the following table showing the several proportions for the individual states of the Union: DENSITY OF POPULATION AND RAILWAY MILEAGE PER CAPITA IN THE UNITED STATES. Miles of Railway. Area Population Population Railway Per 100 Per 10,- (land) 1903 per sq. Mileage square 000 in- Sq. miles, (thousands) mile. 1904 miles, habitants Alabama 51,540 1,923 37 4,627 9.0 24.1 Arizona 112,920 133 1 1,363 1.2 102.4 Arkansas 53,045 1,366 26 4,051 7.6 29.6 California 155,980 1,564 10 6,255 4.0 40.0 Colorado 103,645 574 5 4,959 4.8 86.4 Connecticut 4,845 956 97 1,017 21.0 10.6 Delaware 1,960 189 196 31 15.4 16.0 Delaware 1,960 189 96 301 15.4 16.0 Dist. of Columbia 60 293 4,663 31 51.6 1.1 Florida 54,240 566 10 3,534 6.5 62.4 40 566 10 3,534 6.5 62.4 Georgia 58,980 2,336 39 6,197 10.5 26.5 Idaho 84,290 183 2 1,461 1.7 79.8 Illinois 56,000 5,117 91 11,609 20.7 22.7 Indiana 35,910 2,614 73 6,910 19.2 26.4 Indian Territory . 31,000 455 14 2,532 ,8.2 55.6 Iowa '-.. 55,475 2,336 42 9,854 17.7 42.2 Kansas 81,700 1,469 18 8,811 10.8 59.9 Kentucky 40,000 2,230 55 3,242 8.1 14.5 Louisiana 45,420 1,460 32 3,806 8.4 26.1 Maine 29,895 702 23 1,964 6.6 26.0 Maryland 9,860 1,231 125 1,371 13.9 11.1 Massachusetts... 8,040 2,974 370 2,118 26.5 7.1 Michigan 57,430 2,510 43 8,582 14.9 34.2 Minnesota 79,205 1,857 23 7,741 9.8 41.7 Mississippi 46,340 1,629 35 3,456 7.5 21.2 Missouri 68,735 3,227 47 7,707 11.2 23.9 Montana 145.310 277 2 3,260 2.2 117.9 Nebraska 76^840 1,098 14 5,820 7.6 53.0 Nevada 109,740 40 0.4 986 .9 246.5 New Hampshire .. 9,005 422 47 1,275 14.2 30.2 New Jersey 7,525 2,016 268 2,259 30.0 11.2 New Mexico .. .. 122,460 205 2 2,504 2.0 122.1 New York 47,620 7,659 160 8,297 17.7 10.8 North Carolina .. 48,580 1,976 40 3,956 8.1 20.0 North Dakota ... 70,195 357 5 3,190 4.5 89.3 Ohio 40,760 4,302 105 9,128 22.4 21.2 Oklahoma 38,830 495 13 2,611 6.7 52.7 Oregon. 94,560 437 5 1,736 1.8 39.7 Pennsylvania. .. 44,985 6,606 147 10,933 24.3 16.5 Rhode Island ... 1,053 454 431 211 20.1 4.6 South Carolina. .. 30,170 1,397 46 3,143 10.4 22.5 South Dakota ... 76,850 443 6 3,047 4.0 68.8 19 Tennessee Texas Area (land) Sq. miles ( 41,750 262,290 Populat'n I 1903 thousands) 2,095 3,285 'opulat'n per sq. mile 50 12 Railway Mileage 1904 3,480 11,823 Miles of Per 100 square miles 8.0 4 5 Railway Perl 0,000 inhab- itants 16.1 35 9 Utah 82 190 295 3 1 761 2 1 59 7 Vermont 9,135 347 38 1 063 11 6 30 6 Virignia Washington 40,125 66,880 1,919 581 48 9 3,828 3,298 9.5 4 9 19.9 56 7 West Virginia . . . Wesconsin Wyoming . , 24,645 54,450 97,575 1,021 2,155 101 41 40 1 2,765 7,043 1,247 11.2 12.9 1 3 27.1 32.7 123 4 TOTAL (a) . . 2,970,230 79,900 27 (a) Includes odd hundreds and decimals. 212,577 7.1 26.6 PASSENGER CONDITIONS IN THE EAST. Here it is seen that Rhode Island is the'only state in the Union which, in population per square mile and railway mileage to popula- tion presents anything like the favorable passenger traffic conditions common in England and on the continent of Europe. But even in Rhode Island the average railway mileage to area is four times that of Europe. Belgium is the only country in Europe which has more miles of railway per 100 square miles than Rhode Island, and Bel- gium has a density of population almost 30 per cent, greater than that of our densely peopled miniature state. Rates of fare in Rhode Island for local tickets range from 1.919 cents per mile on the New York, New Haven and Hartford road, which carries 99 per cent, of the traffic, to 5 cents per mile on a little 3.40 mile road; and commutation tickets from 0.584 cents par mile on the former road to 2J on the latter, which, by the way, is operated at a loss. In Massachusetts, where the passenger traffic conditions approach the European standard of density, the average receipts in 1905 were 1.70 cents per passenger mile, with an average journey of 17.75 that has been gradually lengthening because of trolley competition in the short haul business. The New York, New Haven & Hartford Railroad, which is the great passenger road of Massachusetts, derives nearly one-half of its income from passenger traffic and it finds it profitable on an average of 1.70 cents per mile, because its train loads averages 76 passengers to the mile, with an average journey of 18.57 miles. But its co- efficient of 71.69 operating expenses to operating income proves that even under such favorable conditions passenger traffic swells operat- ing cost in greater proportion than with roads where the freigh; traffic predominates. 20 The only other states in which there is the slightest approach to European conditions are Connecticut, Maryland, New Jersey and New York. Even Pennsylvania, with its compact area and indus- trial millions has nothing like the favorable passenger traffic condi- tions that are common to all Europe. It has more miles of railway per 100 square miles of territory than Great Britain and Ireland, and 175 per cent, more railway mileage per capita. It is worthy of note, however, that the Philadelphia & Reading Railway, which has a passenger traffic somewhat analogous to that of lines out of London, England, with an average journey of less than 13 miles, shows aver- age passenger receipts of 1.581 cents per mile. But the passenger conditions throughout the state are such as to force the average for all roads up to over the 2 cent mean. PASSENGER CONDITIONS IN THE WEST. Ohio, which has recently enacted a 2 cent maximum rate law, is far from possessing the density of population to railway mileage necessary to make passenger traffic remunerative even on a 2 cent a mile average, much less as a maximum. With only a trifle over one- third the density of population to area of Germany, for instance, it has more than three times the railway mileage per 10,000 inhabitants. Ohio falls within Group III of the Interstate Commerce Com- mission's territorial divisions, along with Indiana and Southern Michigan, for which the official reports give 44 passengers to the train, which is below the average for the whole country. The average cost of carrying a passenger one mile in this group in 1893 was 1.923 cents against average receipts of 2.076 cents per passenger mile, which had decreased to 2.008 cents in 1904. What is true of Ohio is in a greater degree true of its sister states in Group III. Indiana, with a density of population to area of only 73 per square mile has 26.4 miles of railway per 10,000 inhabitants; and Michigan, with only 43 inhabitants per square mile, is generously provided with 34.2 miles of railway to each 10,000. Michigan has what is called a graded law as to passenger rates. Roads earning $3,000 per mile from passengers are restricted to a 2 cent per mile rate; roads earning between $2,000 and $3,000 per mile have a maximum of 2J cents, and roads earning less than $2,000 per mile may charge 3 cents. The Michigan Central and the Pere Marquette, which are the principal railways of Michigan, do not earn over $3,000 per mile from their passenger traffic alone in Michigan, although the former does, from its passenger service, including mail and express. 21 On the Michigan Central the number of passengers per train in 1905 was 42, and on the Pere Marquette 39. The average number of passengers to the car was 7.3 for the former and 9.9 for the latter. The effect of the Michigan law on those roads which it affected at all, was a reduction in passenger earnings. One road had an increase of 6 per cent, in travel and a decrease of over 12 per cent, in its passenger earnings. TRAFFIC CONDITIONS IN GROUP VI. Group VI, which contains 22 per cent, of the railroad mileage of the country, and includes the great states of Illinois, Iowa, Wisconsin, Minnesota, the Northern Peninsula of Michigan, the northern por- tions of Missouri, and the eastern sections of the Dakotas an em- pire with an area nearly double that of Germany presents condi- tions that make passenger traffic with any restrictions as to maxi- mum rate peculiarly onerous on the railways which traverse it. It has a population of only 38 to the square mile where Germany has 270, and Rhode Island 454, but for this population is provided 47,597 miles of railway or 35 miles per 10,000 inhabitants to 6 miles in Germany and 4.6 in Rhode Island. Low freight rates are the first essential to the development, prosperity and civilization of this splendid domain of forest and prairie, mine and growing manufactures, and in the year 1904 the railways furnished it at an average rate of 7.79 mills per ton mile, or a fraction below the average for the whole country. And al- though passenger traffic imposes numberless burdens and restric- tions on freight traffic, this low freight charge was made without placing any restrictive rate on the passenger traffic, as the average rate of 2.086 cents per passenger mile testified. The following table presents the passenger situation in this territory as seen through the reports of the great railway systems centering in Chicago, including several operating in eastern territory: Atchison, Topeka & Santa Fe . . Baltimore & Ohio Average Average number passenger passengers cars in in train. train. 45 5.56 48 5.02 Average passenger journey, miles. 87.53 45.46 Average receipts per passenger mile, cents. 2.144 1.959 Chicago & Alton Chicago & Eastern Illinois .x 75 5.25 4 . 66 73.60 28.39 1.730 2.099 Chicago & Erie Chicago & North- Western 41 6.08 42. 4 . 81 69.98 30.73 1.649 2.017 Chicago, Burlington & Quincy. Chicago, Milwaukee & St. Paul. Chicago, Rock Island & Pacific . .x 54 5.00 37 5.03 41 4.91 55.05 43.55 45.03 1.955 2.243 2.135 22 Chicago Great Western 35 5.06 40 . 96 2 . 038 Chicago, Indianapolis & Louisville 44 3.27 42 . 64 2 . 061 Illinois Central 50 5.19 26 . 96 1 . 839 Lake Shore & Michigan Southern . 48 6 . 35 59 . 52 2 . 055 Michigan Central 42 5.78 63.36 2.082 New York, Chicago, & St. Louis . x 73 7.01 93 . 77 1 . 563 Pittsburgh, Cincinnati, Chicago & St Louis 48 3.75 32.33 1.925 Pittsburgh, Ft. Wayne & Chicago . 42 3 . 29 27 . 26 1 . 992 Wabash x 56 4.88 80.81' 1.668 Wisconsin Central 38 , 5 .03 57 . 57 2 . 000 x Affected by World's Fair excursion travel. This is one of the most instructive tables ever prepared in rela- tion to the passenger service on American railways. It accounts for the unremunerative character of their passenger traffic. Wherever through any circumstances the train load has risen over 50 the average receipts show that the traffic was carried at an average below 2 cents. These reports cover the closing half of the Louisiana Purchase Exposition when the attendance was heaviest and the returns for all the roads running into St. Louis, show the effect of excursion rates in enlarged train loads of passengers. It should be noticed that there was no marked increase in the number of passenger cars to the train to accommodate the increased number of passengers. The Chicago, Milwaukee & St. Paul, with 37 passengers per train, had only a quarter of a car less per train than the Chicago & Alton, which carried twice as many, passengers per train. In order to emphasize the conditions disclosed in the foregoing table, they should be studied in connection with the following figures from the reports of the three great New England systems as made to the Board of Railroad Commissioners of Massachusetts: Average Average Average Average passengers passenger passenger receipts per per train cars in journey, passenger mile. train. miles. mile, cents. Boston and Albany 72 23 . 71 1 . 64 Boston and Maine 62 4.35 18. 17 1 .76 New York, New Haven & Hartford 76 4.28 18.57 1.70 When legislators can guarantee an average of 14 to 17 passengers per car (whose upholstered seating capacity is 60) over their average haul, they will meet with little opposition to a 2 cent maximum rate from railways of the United States. But with an average below 9 passengers to the car a maximum rate of 2 cents per mile approaches if it does not transgress, the limit where confiscation begins. 23 PASSENGER CONDITIONS IN ILLINOIS. Illinois, with its remarkable provision of 20.7 miles of railway per 100 square miles and 22.7 miles per 10,000 inhabitants, presents the most favorable passenger traffic conditions of Group VI. It has double the population per square mile possessed by Iowa or Wis- consin, and nearly quadruple that of Minnesota. Generously as it is provided with railways, its railway mileage per capita is scarcely half that of Iowa and Minnesota, and barely two-thirds that of Wis- consin. And yet when the passenger conditions in Illinois are compared with those of the New England States or of all Europe, their density offers no encouragement that a two cent maximum rate can be im- posed without being unprofitable or destructive to efficient and im- proved service. Illinois has about one-half the population density of France or Austria-Hungary; one-third that of Germany; one-quarter that of Holland; one-fifth that of Rhode Island, and one-sixth that of Bel- gium. In this essential respect it is about on a par with Turkey, which has only 2 miles of railway to 10,000 inhabitants. But in point of railway mileage per capita, Illinois has one mile where Germany and Belgium have a third of a mile, where Austria- Hungary has less than a quarter, where Holland has one-fifth, and all Europe less than a quarter. In 1871 the passenger rates in effect in Illinois were from 3J to 6 cents per mile, averaging for all roads about 4.25 cents. In 1895, or only ten years ago, the passenger rates were from 1 \ to 3 cents per mile, averaging for all roads 2.26 cents per mile. In 1905 the passenger rates were from 1J to 3 cents per mile, averaging for all roads 1.93 cents per passenger per mile. Commutation tickets on several of the roads leading out of Chicago within a radius of 25 to 40 miles are sold at a rate as low as half a cent per mile, or nearly as low as the military rate paid in Ger- many for stand-up privileges in box cars or slow trains. Such com- mutation rates are only possible where the traffic guarantees full coaches daily in and out 313 days of the 365 in the year. While the mean passenger rate in Illinois has been gradually declining from an average of 4J cents in 1871 to a fraction under 2 cents in 1905, the service has steadily improved in speed, comfort, promptness and frequency at an increased cost per unit. If this increased cost of the passenger service had not been attended by an enormous increase in the freight business, the railways of Illinois would have known neither profits nor progress. 24 The difference in the equipment and service on the Chicago & Alton, for instance, between 1874 and 1905, is almost in inverse ratio to the difference between the mean passenger rate of 3.267 cents per mile in 1874 and 1.730 cents in 1905. Its best passenger train between Chicago and St. Louis in 1905, the locomotive of which alone cost as much as the whole train in 1880, is scheduled to make the run in eight hours compared with eleven hours and twenty minutes for the "Alton Limited" of only twenty-five years ago. There were only two Chicago & Alton trains each way between Chicago and St. Louis in 1880 to four each way now. What has been the experience of the Chicago & Alton is rela- tively true of the passenger service on every other road running out of Chicago to every point this side of the Pacific. What is true in regard to the conditions as to passenger service in Illinois is true in a more striking degree of its sister states of Group VI and the West. Iowa with half the population per square mile and nearly double the railway mileage per capita; Wisconsin with less than half the population per square mile and 44 per cent more railway mileage per capita; Minnesota with little more than one-quarter the population per square mile and 84 per cent more railway mileage per capita; Missouri with about the same railway mileage per capita, but with only half the density of population per square mile; Kansas with only one fifth the density of population and 164 per cent more railway mileage per capita; Nebraska with less than one-sixth the density of population and 133 per cent more railway mileage per capita to say nothing of the states farther west, all are even further removed than Illinois from the conditions of potential passenger patronage that would warrant a limitation of the passenger rate to two cents a mile. If such a rate would impose unbearable financial burdens on Illinois it would surely be disastrous in states with comparatively sparser population and railway facilities far exceeding the possibilities of a profitable passenger business There must be a line beyond which losses incurred on passenger traffic can not be made good through progressive economies in handling freight. 25 HOW PASSENGER TRAFFIC OBSTRUCTS FREIGHT TRAFFIC. As intimated above, not only is passenger traffic on American roads conducted at the expense of the earnings from freight, but its operating requirements all tend to obstruct and interrupt the free and economical handling of the business, which literally as well as figuratively "pays the freight." It is a universally acknowledged fact among operating officials that the carrying capacity of their roads is heavily handicapped by the necessity of making freight trains surrender the "right of way" to passenger trains. Although so much inferior from the exchequer point of view in the proportion of at least 1 to 2, on the rails the passenger traffic is given invariable precedence as "superior." From Maine to California every moment of the 24 hours freight trains are consuming coal and eating out their profits in sidings waiting for scheduled and special passenger trains to pass. The wages of the employes and the interest on the investment in freight locomotives and cars goes on all the time in costly tribute to the "local accommodation" as well as to the flying "limited." The chief operating official of a great western system has esti- mated that the freight carrying capacity of his road would be in- creased over 100 per cent if it were not for the procession of passenger trains for which the "freights" have to make way. Instead of this burden being lessened as the years go by, it is increased by every demand made upon the passenger service for more trains or greater speed. Each additional passenger train puts every freight train on its route into one more siding at least every trip it makes, and may necessitate the complete revision of running orders over a whole system. This increases the cost of the freight business directly and adds indefinitely to the expenses for switching and other incidents of the service. Except on a four track road the interference of one class of traffic with the other is continuous, unavoidable, perplexing and costly. Only on tracks devoted exclusively to passengers can passenger traffic be conducted with the best economic results, and American conditions do not warrant the original outlay necessary to the construction of four tracks over the long distances prevailing in this country. Doubling the tracks does not obviate the difficulty except as to trains. moving in opposite directions. 26 PASSENGER FARES IN AMERICA AND ENGLAND In the agitation for reduced passenger fares in America constant comparison is made to the cheap fares in England and on the con- tinent. Reference has already been made to the physical and population conditions which make such fares feasible there. But it is a question whether the low fares of Europe relatively to character and -cost of the service and the prevailing rates of wages are actually as cheap as the average throughout the United States. Taking up first the case of the United Kingdom, where the rail- ways are managed by private companies under government regula- tion, it appears that there the passenger traffic in 1904 contributed 47 per cent of the gross receipts and that it came from the differ- ent sources in the following proportions: BRITISH PASSENGER TRAFFIC IN 1904. Number. Recci t\ Ordinary passengers: First class '. 34,931,000 $ 17,145,000 Second class 71,294,000 16,325,000 Third class 1,092,549,000 146,910,000 Season ticket holders: First class 130,789 7,185,000 Second class 169,272 5,190,000 Third class 343,812 7,565,000 TOTAL... 1,199,417,873 $200,320,000 Excess luggage, mails, parcels, carriages, horses, dogs, etc 41,610,000 TOTAL $241,930,000 It will be observed that the third class, while 90 per cent in numbers, contributed only 73 per cent of the receipts. This is ac- counted for by the following statement of average receipts per pas- senger excluding season ticket holders: FARES AND PASSENGER RECEIPTS IN ENGLAND. Receipts per Standard fares Receipts per passenger per mile. passenger. per mile. First class 4.00 cents. 47.2 cents. 3.20 cents. Second class 2.50 " 22.0 " 2.20 " Third class 2.00 " 13.0 " 1.70 " Season ticket holders . . . 67 " All classes . . 14.4 cents. 1 .559 cents. 27 The average distance traveled per passenger on British railways is only 7.8 miles, and the average number of passengers per train is 52.81. As the cost of running a train in the United States due to the difference in wages and accommodations is at least 50 per cent greater (in the matter of wages it is 100 per cent greater) than in Great Britain to be as remunerative as the British fare the average American rate would have to be 2.338 cents per mile. There are commutation tickets sold on many of the railways of the United States below the .67 cent average per mile for British season tickets. As above stated, the New York, New Haven and Hartford has such a rate at .58 cent per mile. The writer's monthly ticket on a Chicago road provides on its face for a .475 cent rate per mile and in actual use frequently figures out a .53 cent average per mile. The average for the first class British season ticket per mile figures out .84 cent and the second class .70 cent per mile. A car full of commuters at J cent a mile provides nearly twice as much passenger revenue as the average American car load at 2 cents, and costs little more to operate. The trouble in America is to find the passengers to fill the cars continuously, as they do in England. In England the average freight receipts in 1903 were calculated by the London Statist, the highest authority on such matters, at 1.192 pence or 2.394 cents per ton mile. The average rate in the United States last year was approxi- mately .757 cent per ton mile. PASSENGER CONDITIONS IN GERMANY. Of all the countries of Europe, Germany is most frequently cited as possessing a railway passenger service which should put American rail- ways to shame. The chief reason for this is that nearly 92 per cent of the German Railways are owned and operated by the government. To be sure travelers returning from Germany tell a very different story. They testify that for anything like similar conveniences, comfort and speed the comparison is all in favor of American rail- ways. In the matter of cheap rates they are not often in a position to speak, for Americans in Germany always travel from choice, first or second class, and it is only in the third, fourth and military classes, for which the accommodations range from hard board seats down to standing room in box cars, where there are cheap rates. 28 In Germany only 9 per cent of the travel is first or second class. In America probably 90 per cent is first class. "The standard fares in Prussia are classified according to ac- commodations and speed of trains as follows: PASSENGER FARES IN GERMANY. First class . . Ordinary trains per mile, cents. 3 06 Fast trains per mile, cents. 3 45 Second class 2 30 2 55 Third class 1 53 1 79 Fourth class . .77 "Fourth class cars are not run on express trains. Return tickets are sold for one and one-half times the one way charge. Reduced rates are charged for Sunday tickets, season tickets for workmen traveling fourth class, for soldiers, and for school children. " Baggage to the weight of 55 pounds may be taken in the first three classes. "The average receipts per passenger mile in Prussia is only 1.05 cents. "This low average is due to several facts, one being that nine- tenths of the travel is confined to the classes below the second. "Another is that a large percentage of the tickets are sold at special rates, while " A third cause is that the railroads of Prussia do a large subur- ban business that is handled by trolley companies in the United States." These quoted statements are from "American Transportation" (1903), by Emory R. Johnson, Ph.D., Assistant Professor of Trans- portation and Commerce, University of Pennsylvania, and member of the Isthmian Canal Commission, 1899 to 1900. Of the ordinary accommodations provided for the fourth class and for the military, which may be considered a fifth class, Professor Johnson says: "The coaches are but little better than box freight cars, some- times with and sometimes without benches." They are never at- tached to fast trains. Of the other accommodations he says: "The third class car, or compartment, contains comfortable seats without upholstery, and until recently the third class had no toilet accommodations. "In the second class the passenger is given more room, he has an upholstered seat, and his compartment has an adjoining toilet. 29 "The first class compartment has more elegant fittings and appointments than the second class, but the comforts are practically the same." Moreover these cars are divided into no less than ten classes, according to the class of the compartments they contain. These with the number of cars in each class in 1898 and 1904, were as follows : Clas.-s of Cars 1 Class of Compartment. I Number 1898 167 of Cars. 1904 155 2 I II 6,271 6,263 3 I II III 254 770 4 II 2,078 2,739 5 II III 3,167 3,993 6 . . . . II III IV 43 36 7 III 16,825 20,487 8 III IV 234 245 9 IV 5,635 8,223 10 For Special Purposes 412 483 TOTAL 35,086 43,394 The great increase in the number of low class cars shows the tendency in Germany to provide the most primitive sort of pas- senger accommodations for the German people. The small number of cars containing third class compartments in connection with first class compartments indicates what a small proportion of German passengers of the third class can be accom- modated in first class trains. From what has been said it will be seen how complex are the passenger conditions in Germany and how absolutely intolerable would such class distinctions be in America. The comforts and conveniences which are reserved for the first two classes in Germany are in no respect equal to what is common to every passenger in America on equal terms. Only what are known as their trains "de luxe" are comparable to our Pullman car service and nothing they boast approaches the special service of our "limited" trains. PASSENGER STATISTICS FOR GERMANY. Now let us see how this division of passenger traffic works out in actual operation. The following table gives the number of pas- sengers, passenger .miles, length of journey, and average receipts per mile of the different grades, from the official report for 1904: 30 GOVERNMENT ROADS, 31,043 MILES. Class. Passengers carried (thousands) 1 3,568 2 88,685 3 524,780 4 347,849 5 13,675 All classes. 978,557 Class. Passengers carried (thousands' 88 3,306 3 45,409 4 1,343 5 832 All classes 50,978 TOTAL ALL ROADS . 1,029,535,000 Passengers Average Percent- carried one Percent- Average Passenger age. ) mile, (thousands) age. journey (miles) . receipts per mile, cents. 0.36 206,932 1.44 57.99 2.80 9.06 1,765,763 12.32 19.90 1.70 53.63 6,663,502 46.48 12.69 1.03 35.55 5,041,036 35.16 14.48 .72 1.40 659,259 4.60 48.21 .40 100.00 14,336,492 100.00 14.65 1.00 PRIVATE COMPANIES, 2, 476 MILES. Passengers Average Percent- carried one Percent- Average Passenger age. mile, (thousands) , age. journey, (mile). receipts per mile, cents. 0.17 2,075 .48 23.59 2.70 6.48 46,899 10.78 14.18 1.50 89.08 354,385 81.46 7.80 1.02 2.64 12,403 2.85 9.24 .92 1.63 19,297 4.43 23.18 .41 100.00 435,060 100.00 8.53 1.06 14,771,552,000 14.34 1.00 These tables prove that cheap passenger rates in Germany are only possible because over 90 per cent, of German passengers, both on government and private roads travel third class or lower, and put up with accommodation and conveniences below the poorest service in the United States. To use the words of the Frankfurter Zeitung, discussing the pro- posed reform of German railway rates, "The present system of rates in Germany is excessively complicated; each state railway has its own tariffs, with and without free luggage, with or without extra charges for express trains and special tickets,' 7 etc. Only on the express trains is comfortable rolling stock used and for these there is a supplementary charge. There are no conveniences at all in the fourth class cars by which 35 per cent, of the passengers travel, and the third class cars which carry 53 per cent, of the traffic are fitted up with 'unupholstered wooden seats. The passengers by these latter cars have hitherto been excluded from the dining cars. 31 Under the new regulations the allowance of 55 pounds of luggage to passengers of the first three classes is to be abolished and a tariff by zones and weight substituted. As has been said one-third of the passenger traffic on German roads is in cars described as " box freight cars sometimes with and sometimes without benches." Fares and accommodations on German railways cater to class and social distinctions which are not recognized in the United States. For anything approaching the accommodation, speed and con- veniences of the average American railway service the German traveler pays from 35 to 40 per cent, more per mile. It also appears that there is no material difference in the receipts per passenger mile between the government and private roads. When it is considered that the government has engrossed nearly all the profitable lines of travel and pays no taxes, it is surprising that the difference should be so slight. Measured by economic conditions, as represented in the average income of labor in the two countries, an average passenger rate of 1 cent a mile in Germany is equal to 2 cents a mile in the United States, with this difference that it pays for a board seat or no seat at all in slow trains in Germany and an upholstered seat in all but the Pullman trains in America. Moreover the average freight rate in Germany in 1904 was 1.42 cents per ton mile against only .78 cent in the United States the same year. COST OF GERMAN RAILWAYS. In capital cost the German railways are as much beyond the American roads as they are behind them in comforts and conven- iences of passenger travel, as the following statement shows: COST OF CONSTRUCTION OF GERMAN RAILWAYS TO YEAR 1904. Ownership. Mileage. Cost. Per Mile. Government 31,043 $3,253,063,271 $104,792 Private 2,376 . -138,104,287 55,770 TOTAL 33,519 $3,391,167,558 $101,170 NET CAPITAL OF THE RAILWAYS OF THE UNITED STATES FOR THE YEAR 1904. Mileage. Cosf. Capital per mile. 205,605x $10,711,794,278 $52,100 xExclusive of trackage rights. 32 Whole volumes could not demonstrate more convincingly that in capital cost the railways of America do not quite equal half the cost of construction of the government railways of Germany. But these figures do not show how year after year the cost of construction in Germany grows by charging thereto various items in the way of renewals, replacements and improvements which in America are charged to operating expenses. How this has affected the capital investment in Germany is shown in the following statement of the mileage and cost of construction in 1898 and 1904: 1898. 1904 Increase Increase per cent . Mileage. 29,932 33,519 Cost of Construction. $2,867,642,686 3,391,167,558 Cost per mile. $ 96,071 101,170 3,587 12.00 $ 523,524,872 18.2 $ 5,099 In other words, Germany has added only 3,587 miles of line to her railway system in six years at a cost o^f over half a billion or more than $145,000 per mile. It is easy to finance railways and keep down operating expenses when the government owner can add renewals and replacements to cost of construction as is done in Germany. Finally there were 582,369 employes in the service of the German railways in 1904, whose pay averaged $323 per year. The 120,051 laborers in the maintenance of way department averaged only $175 a year, or slightly over 50 cents a day. In the United States in 1904, there were 1,296,121 railway employes whose pay averaged $631 .per year; of these 201,708 in the class receiving the lowest wages averaged $514 per year. CONCLUSIONS. It only remains to be said: That except in a few densely inhabited sections of the Union where they already have passenger rates averaging below 2 cents a mile, conditions in the United States render that rate, even as a mean, unprofitable. That wherever conditions guarantee an average of something over 50 passengers per train of five cars with regularity, passenger traffic can bejnade to pay its way. That wherever such traffic is divided between so many trains as to reduce the average train load below 45, it becomes unprofitable, and is run at the expense of the freight traffic, with which it inter- feres more seriously with every added passenger train. 33 That for the average receipts of 2 cents per passenger mile the American traveler gets as good accommodations as the average first class passenger who pays 3.2 cents per mile in Great Britain or 2.8 cents in Germany. That in proportion to the pay of railway employes and the earnings of all classes in America, compared with that in Europe, 2 cents here is the equivalent of 1 cent there, and yet for an average of 2 cents the American railways furnish a first class service open to all classes, while for I cent the European roads furnish only third class accommodations on slow trains. CHICAGO, March 15, 1906. 34 ADDENDA A. Showing the increase in the number and speed of passenger trains over the different divisions of track of the Chicago and North- Western Railway in Wisconsin, between the years 1890 and 1905: From Chicago to Madison In 1890 there were 4 trains daily varying in average speed from 27.5 to 31.0 miles per hour; In 1905 there were 6 trains daily varying in average speed from 34.9 to 42.8 miles per hour; From Madison to Elroy In 1890 there were 4 trains daily varying in average speed from 26.5 to 34.0 miles per hour; In 1905 there were 5 trains daily varying in average speed from 33.3 to 42.9 miles per hour; From Elroy to Winona In 1890 there were 2 trains daily varying in average speed from 27.3 to 31.2 miles per hour; In 1905 there were 3 trains daily varying in average speed from 30.0 to 39.1 miles per hour; From Chicago to Milwaukee In 1890 there were 6 trains daily varying in average speed from 34.0 to 38.6 miles per hour; In 1905 there were 9 trains daily varying in average speed from 40.1 to 46.5 miles per hour; From Milwaukee to Fond du Lac In 1890 there were 4 trains daily varying in average speed from 30.6 to 35.8 miles per hour; In 1905 there were 8 trains daily varying in average speed from 33.8 to 43.6 miles per hour; From Fond du Lac to Green Bay In 1891 there were 3 trains daily varying in average spaed from 29.8 to 31.9 miles per hour; In 1905 there were 7 trains daily varying in average speed from 30.9 to 39.1 miles per hour; From Green Bay to Marinette In 1890 there were 3 trains daily varying in average speed from 25.3 to 30.4 miles per hour; In 1905 there were 5 trains daily varying in average speed from 33.1 to 39.8 miles per hour; From Milwaukee to Madison 35 In 1890 there were 3 trains daily varying in average speed from 30.4 to 33.1 miles per hour; In 1905 there were 4 trains daily varying in average speed from 33.1 to 38.7 miles per hour; From Madison to Lancaster In 1890 there was 1 daily train having a speed of 27.0 miles per hour; In 1905 there were 2 trains daily varying in average speed from 25.1 to 30.1 miles per hour; From Montjort Jc. to Galena In 1890 there was train daily having an average speed of 31.0 miles per hour; In 1905 there were 2 trains daily varying in average speed from 25.4 to 31.7 miles per hour; From Sheboygan to Fond du Lac In 1891 there was one train daily having an average speed of 23.2 miles per hour; In 1905 there were 2 tr^ns daily each having an average speed of 29.5 miles per hour; From Fond du Lac to Princeton In 1891 there was 1 train daily having an average speed of 27.1 miles per hour; In 1905 there were 2 daily trains varying in average speed from 32.0 to 33.1 miles per hour; From Appleton Jc. to Eland Jc. In 1892 there were 3 trains daily varying in average speed from 29.6 to 32.5 miles per hour; In 1905 there were 4 trains daily varying in average speed from 25.3 to 33.7 miles per hour; From Eland Jc. to Rhinelander In 1892 there were 2 trains daily varying in average speed from 23.1 to 28.3 miles per hour; In 1905 there were 3 trains daily varying in average speed from 30.7 to 34.3 miles per hour; From Rhinelander to Ashland In 1892 there was 1 train daily having an average speed of 28.4 miles per hour; In 1905 there were 2 trains daily varying in average speed from 29.4 to 33.0 miles per hour; From Eland Jc. to Marshfield In 1892 there were 2 trains daily varying in average speed from 28.7 to 31.5 miles per hour; In 1905 there were 3 trains daily varying in average speed from 26.8 to 30.0 miles per hour. NOTE. The remarkable increase in the speed and frequency of the passenger service of the Chicago and North- Western Railway in Wisconsin, shown above, has been duplicated by the Chicago, Mil- waukee and St. Paul Railway over its network of equal mileage in that state. Coincident with this improvement of the intrastate service in Wisconsin, has been the wonderful transformation in the inter- state service between Chicago and Milwaukee on the two great passenger arteries connecting Wisconsin with the rest of the Union. In 1882, the Chicago, Milwaukee and St. Paul Railway had only four passenger trains daily between these points, with a mini- mum schedule of three hours and 35 minutes. In 1906, the same road has. 11 trains each way daily, and the minimum schedule has been cut to 1 hour and 45 minutes; with 2 hours 6 minutes as the average for all eleven through trains. The passenger service of the Chicago and North- Western Rail- way between Chicago and Milwaukee has undergone a similar development. What has been done by these two railways for Wisconsin merely illustrates what all other important railway systems are doing in almost every state west of Chicago. With a two cent maximum fare the extension of such improved passenger service would be discontinued, even if some of its least profitable features were not abandoned. S. T. 14 DAY USE RETURN TO DESK FROM WHICH BORROWED LOAN DEPT. This book is due on the last date stamped below, or on the date to which renewed. Renewed books are subject to immediate recall. I LD 21A-50m-9,'58 (6889slO)476B General Library University of California Berkeley