Cost of Railroad Transportation, 
 
 RAILROAD ACCOUNTS, 
 
 AND 
 
 Governmental Regnlation of Railroad Tariffs. 
 
 By albert fink, 
 
 VICE-PRES'T and GEN'L SOp't of the LOUISVILLE t NASHVILLE 
 AND GREAT SOUTHERN RAILROAD. 
 
 EXTRACT FROM THE ANNUAL REPORT OF THE LOUISVILLE 
 df NASHVILLE RAILROAD CO. 
 
 LOUI/SVILLE: 
 
 PRINTED BY JOHN P. MORTON AND COMPANY, 
 
 1875
 
 CONTENTS. 
 
 PAGE 
 
 Percentage of Net to Gross Earnings no Criterion of Economy. .4-8 
 How Railroad Accounts should be kept, and Explanation of 
 
 Tables of Annual Report 8-17 
 
 Classification of Operating Expenses 17-20 
 
 Causes of Difference in Cost of Transportation 20-27 
 
 Comparison between Railroad and other Transportation 27-29 
 
 Governmental Regulation of Railroad Tariffs 29-31 
 
 Principles upon which Railroad Tariffs must be constructed 32-35 
 
 Just and Unjust Discrimination ....35-40 
 
 Governmental Railroad Tariffs a Failure 40, 41 
 
 Prevention of Extortion and Unjust Discrimination 41, 42 
 
 Contents of Tables of Annual Report 42-44 
 
 Estimates of the Value of Branch Roads to Main Line 44-46 
 
 Heading of Accounts 47 
 
 Formula for Cost per Ton-mile 48 
 
 Copy-right se lured, 1875.
 
 
 I 
 RAILROAD TRANSPORTATION. 
 
 The length of the roads operated during the year is as follows : 
 
 Main Stem 185.00 miles. 
 
 Bardstown Branch i7-30 " 
 
 Knoxville Branch 110.32 " 
 
 Richmond Branch 3346 " 
 
 Memphis Line 259.10 " 
 
 Total length of road owned by the company 605.18 " 
 
 Leased Roads — Glasgow Railroad 10.50 miles 
 
 Nashville & Decatur Railroad 122.30 miles 
 
 n2.8o " 
 
 Total length of road operated 737-98 miles. 
 
 % if. i(. •!(. -if. % :)(. iif. -ifL 
 
 The following table may be of some interest, showing the number 
 of tons of freight carried over the Main Stem and branches from 
 1865-66 to 1871-72, and over the Main Stem, branches, and Memphis 
 Line from 1872-73 to 1873-74; also the gross revenue, cost, and net 
 revenue per ton per mile, and .the percentage of net to gross earnings: 
 
 MAIN STEM AND BRANCHES. 
 
 Year. 
 
 1865-66.. 
 1866-67., 
 1867-68., 
 1868-69., 
 1869-70., 
 1870-71.. 
 1871-72., 
 
 Length 
 of Road- 
 
 Revenue 
 per 
 
 Operating 
 E.xpenses 
 
 Miles. 
 
 Ton-mile. 
 
 Ton-mile. 
 
 
 
 303.10 
 
 5-37 
 
 3-04 
 
 333.30 
 
 4. '3 
 
 2.31 
 
 336.30 
 
 4.23 
 
 2.27 
 
 367.92 
 
 Z-Z^ 
 
 1.74 
 
 381.40 
 
 3.01 
 
 1. 81 
 
 392.45 
 
 2.57 
 
 1. 81 
 
 392.45 
 
 2.30 
 
 1.46 
 
 Profit 
 
 per Ton per 
 
 Mile. 
 
 2.33 
 1.82 
 1.96 
 
 1.57 
 I .20 
 0.76 
 0.84 
 
 Percentage 
 of Net to 
 
 Gross 
 Earnings. 
 
 43-3 
 44.8 
 
 46.3 
 47.4 
 39.8 
 29.5 
 
 36.5 
 
 Ton-miles. 
 
 26,960,849 
 
 27,504,811 
 25,190,442 
 40,8(3,713 
 57,885,740 
 71,912,950 
 87,642,216 
 
 MAIN STEM AND BRANCHES AND MEMPHIS LINE. 
 
 1872-73., 
 1873-74., 
 
 605.75 
 605.75 
 
 2.21 
 2. II 
 
 1.60 
 1. 41 
 
 0.61 
 0.70 
 
 27.6 
 33.1 
 
 141,649,448 
 128,434,191 
 
 From this statement it appears that since 1867-68 there has been 
 a constant increase in the tonnage until last year. It also appears
 
 RAILROAD TRANSPORTATION. 
 
 that during the period embraced in this statement there has been a 
 constant decrease in the gross revenue, operating expenses, and net 
 revenue per ton-mile. 
 
 PERCENTAGE OF NET TO GROSS EARNINGS NO CRITERION OF ECONOMY. 
 
 The information contained in this table illustrates the error which 
 is often committed in using the percentage of the net to the gross 
 earnings as a criterion of the economy with which a railroad is 
 operated. 
 
 In 1865-66 the net freight earnings were 43.3 per cent and in 
 1873-74 only 33.1 per cent of the gross earnings. It would be 
 erroneous to conclude from this that the road was operated with less 
 economy in the past year. It will be observed that the gross earnings 
 per ton-mile in 1865 were 5.37 cents; in 1874 they were only 2. 11 
 cents. Had the gross earnings per ton-mile in 1874 been the same 
 as in 1865, the net earnings would have been 74 per cent instead 
 of 33.1 per cent of the gross earnings. It would, however, be equally 
 erroneous to conclude that in 1865 less economy was exercised in the 
 operation of the road than in 1874. The differences are accounted 
 for by other reasons. In 1865 the bulk of the freight was local, 
 carried over short distances of the road ; since that time it has become 
 mainly through business, which goes over the whole length of the 
 road. The latter is transacted at less expense. Since 1865 the 
 amount of business on the Main Stem has more than trebled. This 
 increase causes a reduction in the operating expenses. There is a 
 certain class of operating expenditures that do not increase with the 
 amount of business; they are fixed expenses which have to be incurred 
 whether a small or a large business is transacted. It follows that 
 when only one third of the number of tons of freight were moved in 
 1865 as compared with 1874, the cost per ton-mile for this class of 
 expenditures would be three times greater than in 1874. 
 
 In order to make a just comparison between the economy of 
 operation in two different years, it becomes necessary to take into 
 consideration the amount as well as the character of the business, 
 whether through or local, and also the cost of labor and material 
 prevailing during these years. But even then the comparison gives 
 no correct results. We have further to discriminate between the ex- 
 penditures made during one year due to that year's operation, and the
 
 / 
 
 RAILROAD TRANSPORTATION. 5 
 
 expenditures made due to the operation of former years. The expen- 
 ditures on account of renewal of rails, cross-ties, bridges, rolling-stock, 
 etc., do not always, I may say hardly ever, represent the exact cost 
 of making good the wear and tear caused by the business of the year 
 in which they were incurred. For the first few years of the operation 
 of a new road, for example, the expenditures on the accounts just 
 named would be very small, and afterward they must become corre- 
 spondingly large. 
 
 If we therefore fail to ascertain correctly the operating expenses 
 for each year, the net earnings as shown in the annual reports for any 
 one year do not form a proper basis for estimating the value of rail- 
 road property. The results of some years' operations lead to hope 
 and others to disappointment, either of which may not be justified 
 by the facts. 
 
 To illustrate this subject further, the following estimate of the 
 expenditures during the year on the Main Stem of the Louisville & 
 Nashville Railroad which are not chargeable to last year's business is 
 submitted. 
 
 For Repairs of Iron Rails. — The gross ton-miles moved over the 
 Main Stem during the year were 307,483,718. Taking the average 
 number of tons of iron worn out by 100,000 gross ton-miles, as shown 
 in Table XIX (0.95 tons), the amount of iron worn out by the last 
 year's business was 2,921 tons. The actual cost of renewing this iron 
 will be, including labor. 
 
 At ;^5o per ton 146,050 00 
 
 The amount expended last year (Table II, items 42-45) 180,735 ^5 
 
 Amount not chargeable to last year's operation ;5534,685 85 
 
 This estimate is based upon the average wear of iron. But there are 
 now 72 miles of steel rails on the Main Stem: estimating their wear 
 at four times that of iron and the cost ^20 per ton more, we find that 
 instead of 1,094 tons of iron only 273.5 tons of steel rails were worn 
 out. The difference in cost of renewal amounts to 
 
 1,094 tons of iron at $50 54,500 00 
 
 273.5 'o"s of steel at $70 19,145 00 
 
 J?35.35S 00 
 Total amount overcharged for repairs of rails in 1873-74, $70,240.85.
 
 RAILROAD TRANSPORTATION. 
 
 For Repairs of Cross-ties. — The cost of replacing cross -ties per 
 year on the Main Stem since the road was first built has been, as 
 per statement XX, $257.11 per mile. 
 
 The cost chargeable to last year's operation is 185X257. u 47>565 35 
 
 The amount actually expended on that account was (Table II, item 14).. 68,244 67 
 
 Amount not chargeable to last year's operation ^20,679 32 
 
 For Bridge Repairs. — The average cost of bridge repairs for the 
 last eight years has been $141.24 per mile per year. During the past 
 year the expenditures on this account were unusually heavy, $250.26 
 per mile. The condition of the bridges is at present such that the 
 cost of repairs will hereafter be much less than the average for the 
 last eight years; but estimating it to be the same, the expenses in- 
 curred last year were greater than the average, 185 X (250.26 — 141.24) 
 = $20,168.70, and the total amount for iron ties and bridges not 
 chargeable to last year's operation is $111,088.87. 
 
 This large amount of money expended during the last year (as 
 well as similar amounts in the two preceding years) was due to the 
 operation of former years. In the coming year, on account of the 
 excellent condition in which the road now is, these expenditures can 
 be reduced at least to the average, if not below it, and large reduc- 
 tions will be made on account of the reduced wages and cost of 
 material, so that we may confidently expect larger net earnings. It 
 is fortunate that the heavy expenditure required to make good the 
 wear of former years had been incurred before the effects of the panic 
 of 1873 upon the business of the road were felt. In the near future 
 we must expect the business of the company to be comparatively light. 
 Fortunately no heavy expenditures will have to be made. 
 
 It will appear from what has been said above that it is impossible 
 to judge of the economy of railroad operation from the annual reports 
 of a railroad company for any one year without estimating the expen- 
 ditures that are really due to each year's operation. Large net earn- 
 ings may be shown in one and much smaller in another year, yet the 
 road may have been operated with the same degree of economy in 
 both years. 
 
 To make the annual reports of a railroad company of value, the 
 accounts of the company should be so kept as to show the expenses 
 due to that year's operation. For that purpose an account should be
 
 RAILROAD TRANSPORTATION. 
 
 it 
 
 opened which might be called "renewal account," and to which 
 should be credited or charged the difference between the estimated 
 cost of the operating expenses due to the year's work and the oper- 
 ating expenses actually incurred during the year. This account would 
 have to be credited when the actual cost is less and charged when it 
 is more than the estimated cost. The balance of this account at the 
 end of the year will be a proper charge against the revenue account. 
 It is true that these balances can only be estimated ; but as railroad 
 tracks, ties, bridges, etc., are never made entirely new again, there 
 always will be a certain amount charged to this renewal account which 
 will represent the depreciation of the property, and the owner of the 
 property will have a clearer idea of its value than if no such account 
 had been kept, although it may not be entirely correct. 
 
 I have purposely pointed out the difficulties encountered in forming 
 correct estimates of the economy of railroad operations, because, on 
 account of the effects of the general stagnation in business upon the 
 value of railroad property, greater interest is felt in this subject than 
 heretofore. It is surprising to find that so deceptive a criterion as 
 the percentage of operating expenses to gross revenue is still used by 
 many intelligent persons (among whom are not only stockholders, 
 but bankers and financiers) to judge of the economy of railroad 
 operations. 
 
 In addition to what has been said as to the impossibility of basing 
 any judgment upon such data, the following table is submitted, which 
 shows the percentage of operating expenses to gross earnings, also 
 the revenue and cost per ton-mile and per passenger per mile on the 
 several roads operated by the Louisville & Nashville Railroad during 
 the year 1873-74: 
 
 ROAD. 
 
 1. Main Stem 
 
 2. Glasgow Railroad 
 
 3. Knoxville Branch 
 
 4. Bardstown Branch 
 
 5. Memphis Line 
 
 6. Nashville & Decatur Division. 
 
 7. Richmond Branch 
 
 1 
 
 'V 
 
 = SO" 
 
 H? 
 
 ^i.^ 
 
 
 'So'Ss 
 
 < 
 
 S n 
 
 B-F" 
 
 P < 
 
 
 -( "1 J; 
 
 P = 
 
 32 
 
 T >! ni 
 
 si 
 
 
 
 
 n n n 
 
 Orq n 
 
 
 
 n 
 
 VI — 
 
 
 
 
 : -o 
 
 : ■" y 
 
 "v 
 
 
 1 X 
 
 : 
 I "I 
 
 \n^ 
 
 i n 
 
 
 Cents. 
 
 Cents. 
 
 Cents. 
 
 63.80 
 
 2.037 
 
 1.32 
 
 3.56 
 
 67.14 
 
 18,064 
 
 8.23 
 
 4.98 
 
 73.09 
 
 2.676 
 
 1.87 
 
 3.63 
 
 75.19 
 
 5.504 
 
 3.72 
 
 3.40 
 
 76.49 
 
 2.014 
 
 1.44 
 
 3.88 
 
 78.38 
 
 2.605 
 
 1.74 
 
 4.13 
 
 101.41 
 
 3.419 
 
 3.91 
 
 3.64 
 
 o 
 
 com o 
 ■^2 " 1 
 
 n 
 
 n 
 
 '^ U) en 
 
 < 3 
 
 : n , ) 
 
 Cents. 
 2.50 
 
 33 
 74 
 
 39 
 20 
 
 34 
 36 
 
 n
 
 8 RAILROAD TRANSPORTATION. 
 
 These seven roads from which the above results are obtained are 
 under the same management, and whatever may be the degree of 
 economy exercised in their operation, it is the same on all; yet the 
 proportion of operating expenses to gross earnings vary from 63.8 to 
 101.4 per centjthe cost per ton-mile of freight from 1.32 to 8.23 cents, 
 and per passenger from 2.5 to 4.34 cents. 
 
 HOW RAILROAD ACCOUNTS SHOULD BE KEPT, AND EXPLANATION OF 
 
 TABLES OF ANNUAL REPORT. 
 
 If the percentage of operating expenses to net earnings, or the 
 cost of one ton of freight or one passenger transported one mile, can 
 not be used as an absolute measure of economy, or even as a measure 
 of comparison, and we have seen it can not, the question arises. What 
 is the proper course to pursue in ascertaining whether a railroad is 
 economically operated or not? 
 
 To this the answer must be given that the only mode of ascer- 
 taining this fact thoroughly is to make an examination of each item 
 of expenditure incurred in the operation of a railroad, and see whether 
 this has been reduced to a minimum and the service rendered for 
 it to a maximum. To make this investigation requires of course a 
 thorough and practical knowledge of railroad operations, of the cost 
 of material and labor, of the quality of the same, and of the best 
 results that can be obtained therefrom. But even that knowledge 
 would be of little avail unless the accounts of the operating expen- 
 ditures of railroads are kept in such a manner as to exhibit in detail 
 not only the expenditures, but also the amount of work performed 
 for each item of expenditures. 
 
 In the annual reports of this company I have endeavored, as far 
 as practicable, to present the accounts of the expenditures in such a 
 manner and for the purpose set forth. I propose to call special atten- 
 tion to the information contained in this report, because of the great 
 interest which is now manifested in the subject of railroad transporta- 
 tion, and the necessity that both the owners of railroad property and 
 the people should possess correct information regarding it. 
 
 The tables accompanying this report may be divided into two 
 classes. The first class, from Table I to XXV,* contains statements of 
 
 =^= These tables are published in the Annual Report of the Louisville & Nashville Railroad 
 Company for 1873-74. The "Headings of Accounts" of tables II and III are printed on page 
 47 in this pamphlet, and should be referred to by the reader instead of these tables.
 
 the operating expenses and statistical information regarding the same ; 
 the second class, from XXVI to XLV, contains statements of the 
 amount and character of the freight and passenger traffic, with the 
 revenue derived therefrom. 
 
 Table I contains in a condensed form, under one hundred and 
 two heads for each road, the general results of the operation of the 
 Main Stem and branches and leased lines, both as regards expenses 
 and revenue. 
 
 Table II contains statements of the operating expenses under 
 seventy-seven subaccounts for each road. The total sums expended 
 on each account are shown in this statement ; but from this no opinion 
 can be formed as to the economy or judiciousness of the expenditure. 
 In order to aid in analyzing the expenditures, with the view of forming 
 such an opinion, the following tables are prepared, showing the expen- 
 ditures for certain units of work performed. 
 
 Table III shows the expenditures per mile of road and per train- 
 mile. The figures in the first column designate the same accounts as 
 are indicated by the same figures in Table II. The items i to 29 show 
 the cost per mile of road for maintenance of roadway, buildings, 
 general expenses, etc. ; items 30 to 74 the cost per train-mile. 
 
 There are some accounts, however, for which the cost " per mile of 
 road " or "per train-mile" can not be used as a criterion of economy, 
 because the expenditures on these accounts are independent of the 
 number of miles of road operated or the number of miles run by 
 trains. For this reason it becomes necessary to present these accounts 
 in some other manner, so that they may show the amount and character 
 of the work done, as well as the expenditures incurred. The following 
 tables have been prepared for that purpose. 
 
 Table IV shows in detail the expenditures incurred at stations. 
 'J'he total amounts expended were shown in items 30 to 35, tables II 
 and III. The number of tons of freight handled and the cost per ton 
 at each station are shown in this table. 
 
 Station expenses form a very large proportion of the operating 
 expenses of a railroad, and when their aggregate amount is only 
 known it is impossible to tell whether this branch of the business 
 was conducted with economy or not. But by showing the cost per 
 ton of freight handled a measure is obtained by which a proper 
 check can be put upon this class of expenditures. This, however, to
 
 lo RAILROAD TRANSPORTATION. 
 
 be of use has to be done from month to month, and for that purpose 
 monthly statements are made out showing the cost of conducting the 
 business at the principal stations. 
 
 Table V is such a statement, showing the cost per car-load of 
 freight forwarded from and received at Louisville for each of the 
 following items: Labor (loading and unloading freight), clerks 
 (receiving and delivering freight;), agents, cashiers, office-clerks, and 
 watchmen (general expense); yardmen and switchmen; expenses of 
 switching-engines. 
 
 With close attention to the management of the business of a 
 station for a few months the minimum cost at which freight can be 
 handled can be readily ascertained. This being known, it requires 
 only some clerical labor in order to obtain a check over a very im- ' 
 portant class of expenditures, amounting on the Main Stem of this 
 road to about 25 per cent of the total operating expenses, and of such 
 a character that very little personal supervision can be exercised over 
 the same. 
 
 Tables VI, VII, VIII, and IX show the cost of repairs of each 
 bridge, depot-building, shop-building, water-station, and section-house 
 oh all the roads. The total amount of expenditures on these accounts 
 are shown in Table II, items 15 to 19. 
 
 The expenditures detailed in these tables belong to that class which 
 can not be tested as to their economy by using the mile of road oper- 
 ated or the number of train-miles run over it as a measure of cost. 
 Hence the cost of the repairs of each individual structure is shown, 
 from which, with a knowledge of its condition at the beginning and 
 at the end of the year, an opinion can be formed as to the judicious- 
 ness of the expenditures. The tables of course contain only the total 
 amounts expended on each structure. When further information is 
 desirable the books, which contain accounts in detail with each 
 structure, must be consulted. 
 
 While it is comparatively easy to trace the expenditures just 
 named, and obtain a proper check over the same, it is more difficult 
 to do so with another account, usually designated "road repairs." 
 
 The work performed in maintaining the roadway and track is of a 
 complicated character, and in order to establish some unit of measure 
 of cost and work it becomes necessary to classify the expenditures 
 according to each special character of work, and apply the proper
 
 RAILROAD TRANSPORTATION. ii 
 
 measure to each class separately. For that purpose the general account 
 of road repairs has been subdivided in the reports of this company as 
 follows (the figures indicate the same accounts as those in tables II 
 and III) : 
 
 42. Cost of renewal of rails; number of tons of rails used, and cost 
 
 per ton. 
 
 43. Labor of replacing rails; number and weight of rails replaced, 
 
 and cost per ton. 
 
 44. Cost of hauling material for renewal of track ; tons of rails hauled ; 
 
 cost per ton. 
 
 45. Cost of joint-fastenings, spikes ; cost of same per ton of new rails. 
 
 11. Cost of renewal of cross-ties; number of ties used; cost per tie. 
 
 12. Cost of labor replacing ties, per tie. 
 
 13. Cost of hauling ties, per tie. 
 
 1. Adjustment of track per mile of road. 
 41. Adjustment of track per train-mile. 
 
 3. Ditching per mile of road. 
 
 2. Repairs of ballast per "mile of road. 
 
 7. Repairs of road-tools per mile of road. 
 
 6. Repairs of hand and dump-cars per mile of road. 
 
 9. General expenses of road department per mile of road. 
 
 10. Extraordinary repairs, slides, per mile of road. 
 
 I propose now to examine each of these subaccounts, and show 
 which is the proper unit of measure to be applied to cost and work. 
 
 42. The cost of refiewal of rails varies with the tonnage passed 
 over the rails, the speed of trains, and the quality of the iron. To 
 ascertain what should be the wear of rails under a certain usage 
 requires careful observation during many years upon the different 
 classes of iron in the track. The general results obtained during 
 the last eighteen years on the Louisville & Nashville Railroad have 
 been recorded in statement XIX, which will be referred to hereafter 
 more fully. 
 
 From this statement it appears that on the Main Stem 100,000 
 gross tons passed over one mile of road wore out 0.95 tons of rail 
 (60 lbs.), while on the Memphis Branch the same gross weight wore 
 out 1.5 tons. On the Knoxville & Bardstown branches no deduction 
 can as yet be drawn, as there has not been sufficient wear of the 
 iron. The rails on the Memphis Branch were of the tubular form.
 
 12 RAILROAD TRANSPORTATION. 
 
 and proved in comparison with those on the Main Stem very infe- 
 rior. By examining further the wear of each particular brand of iron 
 under the tonnage we find that of some brands only 0.75 tons were 
 worn out by 100,000 tons of gross weight on one mile of road, while 
 of others 1.75 tons, showing a very great difference in the quality 
 of iron. 
 
 On account of this great inequality it is impossible to fix upon 
 any positive measure of wear and predetermine very accurately what 
 should be the cost per gross ton-mile or per train-mile for repairs of 
 iron. But, using the average result obtained from the experience of 
 many years, we may at least make approximate estimates. The most 
 valuable use to which the information obtained by keeping accurate 
 records of the wear of iron inay be put is to aid us in selecting the 
 best quality of iron, to determine the best mode of manufacturing 
 it, and to decide when it becomes advantageous to use steel rails; 
 all of which are important questions in the economy of railroad 
 operation, which can not be intelligently answered without such 
 information. 
 
 The amount of money involved in selecting good or inferior iron 
 may be estimated on the Louisville & Nashville Railroad as follows: 
 The total gross tonnage that passed over all the roads operated by 
 this company in the past year was equal to 614,882,166 tons carried 
 over one mile. If the whole road was laid with the best iron that 
 we have used, there would be required per annum under this tonnage 
 4,611 tons of iron, and if with the most inferior iron which we have 
 used, 10,760 tons, a difference of 6,148 tons, which at the present 
 low price of iron, including labor of relaying — say $50 per ton — 
 would amount to $307,400. 
 
 The next item of expense incurred in keeping a road in repair is 
 the labor of replacing rails, the cost of which can be properly meas- 
 ured by the number of tons of new rails laid. The same holds good 
 approximately as regards the cost of jomt-fastenings, spikes, and the 
 hauling of iron. If the minimum cost of these several classes of work 
 is once ascertained by special observation, a check over a large amount 
 of expenditure can be readily established. 
 
 Renewal of cross-ties (items 11, 12, 13, tables II and III). — The 
 average number of ties in one mile of road, the rate at which they 
 decay per annum, the minimum cost of ties, labor of replacing, and 
 
 I
 
 RAILROAD TRANSPORTATION. 13 
 
 hauling are the principal elements which determine the amount wliich 
 should be expended per year on this account. The accounts of this 
 company have been so kept as to exhibit all this information. The 
 results of the experience for the last fifteen years regarding the dura- 
 bility of ties and the number required per annum, the cost of labor 
 per tie, etc., have been recorded in statement XX. 
 
 Adjustment of track (items i and 41, tables II and III). — In this 
 account is charged the cost of keeping the track in i)roper adjustment 
 as regards line and surface, and necessarily includes the cost of bed- 
 ding the ties for the purpose of sustaining the rails in their proper 
 place. The cost of this work depends upon the nature of the road- 
 bed, the action of the weather, and the amount and character of the 
 traffic. In order to obtain a measure of economy we have to divide 
 this account into two parts, in accordance with the cause which makes 
 the expenditures necessary : 
 
 {a) The cost of bedding ties and adjusting track, so far as this 
 work may be required, regardless of the extent of the use that is made 
 of the road, depends on the character of the road-bed, the influence 
 of climate, etc., and cost of organization for the purpose of attending 
 to this work. 
 
 (^) The cost of re-adjusting track as far as made necessary by the 
 passage of trains over it. 
 
 The proper measure for the expenditure referred to under (a) is the 
 "mile of road," and under {b) the number of tons passed over the 
 track, or approximately the number of "train-miles." The cost of 
 this work must necessarily differ on different roads. No general rule 
 can be adopted that will apply to all roads ; yet by an observation for 
 several years in each individual case the minimum cost per mile of 
 road and per train-mile for each class of work may be ascertained and 
 used as a check upon this class of expenditures. 
 
 In tables II and III this account (adjustment of track) has been 
 divided in accordance with the result obtained from observation made 
 on this road during the last fifteen years. The cost per mile of road 
 is shown in item i, tables II and III, and the cost per train-mile in 
 item 41. 
 
 The division of this account becomes also necessary when wc 
 desire to ascertain the relations existing between the cost of additional 
 tonnage passing over the road and the cost that has to be incurred
 
 14 RAILROAD TRANSPORTATION. 
 
 independent of the tonnage — an important item in estimating the cost 
 of transportation. 
 
 3. Cost of ditching differs with the nature of the soil, climate, 
 and amount of rainfall. With observations extending over a number 
 of years the minimum cost per mile of road may be approximately 
 ascertained in each individual case, and may be used as a check on 
 this class of expenditure. The same may be said of the cost of repairs 
 of ballast (2), road-tools (7), repairs of hand and dump-cars (6), and 
 general expenses of road department (9). 
 
 The cost of extraordinary repairs includes the cost of repairing 
 damage to road-bed caused by freshets, slides, etc. These are acci- 
 dental causes, hence no measure can be applied to this except that 
 based upon experience for a great number of years. 
 
 This analysis of the various subaccounts which are usually com- 
 prised under one general account, called "road repairs," shows how 
 impossible it is to apply to the general account one measure — such, 
 for example, as the "mile of road" or "train-mile" — and use it to 
 ascertain the economy with which the work was done, or to make 
 comparison between different roads. The many elements of cost of 
 different nature must be separately considered and compared. Thus 
 we could not compare the cost of adjustment of track of a mile of road 
 over which forty trains pass with the cost of a mile over which only 
 one train passes without separating the expenses incurred on account 
 of tonnage from those which are independent of the tonnage. 
 
 We have now ascertained the various accounts from i to 46, 
 tables II and III, and established proper measures that- can and 
 should be applied to each, to determine the judiciousness of the 
 expenditures. We will now proceed to examine the other accounts 
 from 47 to 73. 
 
 Table XI shows the cost per train-mile and*engine-mile in detail 
 of the following items named in tables II and III : 
 
 48. Locomotive repairs. 
 
 49. Oil and waste used on locomotives. 
 
 50. Watching and cleaning. 
 
 53. Engineers and firemen's wages. 
 63. Fuel used by locomotives. 
 
 48. The cost of locomotive repairs may be measured approximately 
 by the mile run, yet it is necessary to examine into the cost of repairs 
 
 !
 
 RAILROAD TRANSPORTATION. 15 
 
 of each individual locomotive in order to determine the economy 
 with which the work was performed. Detailed accounts are therefore 
 kept with each locomotive. 
 
 53. Engineers a7id firemen; 55. Conductors and brakenien. — The 
 elements determining expenses on these accounts are the wages paid 
 to each class of employees per day, and number of miles to be run by 
 them constituting one day's work. The total expenses under this 
 account should not exceed the cost per mile so ascertained, multiplied 
 by the total number of miles run. 
 
 49 and (iT)' Oil and waste and fuel used by locomotives can be 
 readily checked by the number of miles run. It is necessary to ascer- 
 tain from direct observation the most economical results that can be 
 secured under existing conditions, and apply it as a measure to the 
 whole year's work. 
 
 The expenses for fuel form so large a portion of the operating 
 expenses of railroads that accurate accounts must be kept of the con- 
 sumption of each engine, and these accounts must be balanced with 
 the total amount of fuel bought. Without such check the detailed 
 statement can not be relied upon as correct. Inventories of the fuel 
 on hand are taken every six riionths, and all the fuel bought is fully 
 accounted for. 
 
 Table XII contains a yearly balance-sheet of fuel account, in 
 which is shown the amount of fuel bought and consumed during the 
 year, and for what purpose used, cost of same, etc. 
 
 Table XIII. Car repairs. — The unit of comparison of this work 
 is the number of miles run by the several classes of cars. This table 
 contains the mileage made by each class of cars, and cost of repairs per 
 mile. The expenditures shown in items 66-72 depend principally upon 
 accidental causes, and no fixed measure of economy can be adopted 
 for the same. 
 
 I have now examined the several items constituting the operating 
 expenses of the road, and in a general way pointed out the mode in 
 which the accounts should be kept in order to enable the managers to 
 obtain proper checks and control over the expenditures, and to aid 
 others in the investigation of the economy with which the road has 
 been operated. There are some additional tables attached to this 
 report which give details of expenditure and other statistical informa- 
 tion relating thereto, to which I will now refer.
 
 1 6 RAILROAD TRANSPORTATION. 
 
 Tables XIV and XV are balance-sheets of the iron- and brass- 
 foundry accounts, showing the amount of castings made, material 
 bought, cost of making castings, and material and castings on hand 
 July I, 1874. 
 
 Table XVI shows the operating expenses of the steamer "Dick 
 Johnson" on the Tennessee River. This steamer was put on the 
 Tennessee River to secure business from that river which we could 
 not obtain otherwise, with the view of increasing our tonnage in the 
 direction in which it is now lightest, adding to the revenue without 
 much additional expense. Satisfactory arrangements have been made 
 with the E. & T. P. Co. to run in connection with our road after 
 July ist, and from that time the company will discontinue to operate 
 its own steamer. 
 
 Table XVII shows in detail the amount expended for new rolling- 
 stock acquired during the year, and for other improvements which 
 have increased the value of the road, and which are not properly 
 chargeable to the operating account. 
 
 The following tables contain further statistical information. 
 
 Table XVIII shows the cost of road repairs per mile of road and 
 per train-mile from the time the roads named were completed or 
 came into the possession of this company until the pfesent day ; also 
 the amount of new iron used during each year. 
 
 Table XIX shows the cost of renewing iron on four roads since 
 their construction ; also the number of tons of gross weight due to 
 the passenger and freight traffic passed over the iron since it was laid. 
 This tonnage is given in three different modes: i. The actual gross 
 tonnage passed over the road, including switching and construction 
 service ; 2. The gross weight of passenger and freight revenue-trains 
 alone ; 3. The gross weight of the freight revenue-trains, and double 
 the gross weight of the passenger revenue-trains. It is presumed, as 
 data for comparison, that the wear of one gross ton of a passenger- 
 train moved over the iron at double the speed of a freight-train is 
 equal to the wear of two gross tons of a freight-train. In order to 
 ascertain the wear of iron by the tonnage passed over it from the 
 time the iron was new up to the present time it is necessary to take 
 in account the depreciated condition of the iron at present and the 
 estimated cost to make the track new again. These estimates are
 
 RAILROAD TRANSPORTATION. 17 
 
 shown in this table, and the results obtained have been referred to 
 before (page 11). 
 
 Table XX shows the number of cross-ties used on the various 
 roads since their construction up to date, the cost of same, the cost of 
 labor relaying and hauling per tie. It was also necessary to make the 
 estimates of the number of ties required to make the road new, as the 
 average number of ties used per year up to this time does not represent 
 the full wear of the ties per year. 
 
 Table XXI shows the amount of new iron laid during the past 
 year, and quantity of each kind of iron and steel in the road on 
 July ist. 
 
 Table XXII shows the condition of the road-bed as regards ballast. 
 
 Table XXIII shows the length of side-tracks. 
 
 Table XXIV shows the number and kind of cars and locomotives 
 owned by the company. 
 
 Table XXV shows the value of materials on hand July ist. This 
 is the last table of the report containing information in regard to the 
 operating expenses. 
 
 CLASSIFICATION OF OPERATING EXPENSES. 
 
 Before leaving this subject attention is called to the classification 
 of accounts in tables II and III. It will be observed that the accounts 
 are divided into three classes : 
 
 Maintenance of road, buildings, and general expense, from 
 
 account i to 29. 
 Station expenses, from account 30 to 40. 
 Movement expenses, from account 41 to 74. 
 
 The expenditures of each class bear a distinct character, to which 
 I will now refer more particularly. 
 
 Those in the first class are not affected by the amount of business 
 transacted, within certain limits to Idb referred to hereafter. The 
 roadway must be kept in good order. Cross-ties when decayed must 
 be renewed, bridges kept in repair, and a certain organization of 
 officers and men must be kept up, whether one or more trains are to 
 pass over the road. 
 
 This class of expenditure per mile of road will vary on different 
 roads according to the permanency of construction, the number of
 
 1 8 RAILROAD TRANSPORTATION. 
 
 bridges to be kept in repair, the nature of the soil, the climate, and 
 many other local conditions. They will also vary with the amount 
 of business, but only to the extent to which an increase of business 
 requires more extensive accommodation, such as depot - buildings, 
 side-tracks, etc., which have to be kept in repair. On a road with an 
 established business, and having suitable accommodation for the same, 
 considerable variation in business may take place without affecting 
 this class of expenditures. 
 
 The second class of expenditures are incurred at stations in keep- 
 ing up an organized force of agents, laborers, etc., for the purpose of 
 receiving and delivering freight, the selling of tickets, etc. 
 
 One portion of these expenditures does not vary with the amount 
 of business ; another portion does. A certain number of agents have 
 to be employed, whether there is more or less work to be done ; but 
 the number of persons employed to handle freight may be varied in 
 proportion to the number of tons of freight to be handled. This 
 whole class of expenditures, however, is entirely uninfluenced by the 
 length that either freight or passengers are hauled, or, in other words, 
 by the work of transportation performed. Freight or passengers may 
 be hauled five or two hundred miles, the station expenses incurred on 
 their account being the same. 
 
 In the third class of expenditures have been collected all those 
 that vary with the number of trains run. 
 
 On roads on which there is sufficient freight business to fill all 
 trains that are run from one terminus of the road the amount of 
 freight transported will be nearly in proportion to the number of 
 freight train-miles ; and hence on such roads this third class of expen- 
 ditures will be nearly in proportion to the amount of business. It is 
 this class of expenditures alone which possesses that characteristic. 
 
 On roads, however, upon which freight-trains have to be run at 
 stated times, whether fully loaded or not, this class of expenditures 
 does not vary with the business, but very nearly with the number of 
 trains run. The expenditures and amount of freight transported in 
 this case are irrelative, the cost of transporting freight being dependent 
 entirely upon the loads as accidentally offered for transportation. 
 
 To the three classes of expenditures just named, and which have 
 been shown separately and in detail in tables II and III, must be 
 added a fourth, not shown in these tables, but which forms a large
 
 RAILROAD TRANSPORTATION. 19 
 
 proporticm of the total operating expenses of railroads — viz., the 
 interest on the capital invested. 
 
 This class is mainly uninfluenced by the amount of work done. 
 Only so far as an increase of business involves the necessity of addi- 
 tional investments for its accommodation is it influenced by the 
 amount of business. 
 
 In the consideration of the subject of the cost of railroad trans- 
 portation it is of the greatest importance to discriminate between the 
 expenditures which vary with the amount of work performed and 
 those which are entirely independent thereof. The latter form so 
 large a proportion of the total operating expenses of railroads that it 
 becomes impossible to make the amount of work performed a criterion 
 or measure of the cost. 
 
 The fixed or inevitable expenses which attach to the operation of 
 railroads, and which are the same whether one or many trains are run 
 over a road, have to be ascertained separately in each individual case. 
 These expenditures are in the nature of a tax upon the business of the 
 road ; the smaller the business the larger the tax. What the tax may 
 or should be per ton of freight or per passenger carried in any one 
 case can not be predetermined by any general rule or law, but can 
 only be ascertained after the two elements on which it depends — 
 (i) the fixed expenditures, and (2) the amount of work done — are 
 actually known. These elements vary on all roads ; it would be a 
 singular accident to find them alike on any two. 
 
 The disregard of these facts in estimating the cost and the value 
 of railroad transportation with a view of judging of the reasonableness 
 of railroad tariffs has led to many erroneous conclusions, which appear 
 to be now fixed in the public mind. It is of great importance to the 
 owners of railroad property at this present time — more so perhaps 
 than heretofore — to possess correct information upon the subject of 
 the cost of railroad transportation. It may therefore not be considered 
 out of place here to show how the cost of transportation varies upon 
 the various roads operated by the Louisville & Nashville Railroad, and 
 the reasons therefor. 
 
 The following table (A) shows the percentage of the four classes 
 of expenditure above referred to, of the total' operating expenses 
 on the seven roads operated by the Louisville & Nashville Railroad 
 Company.
 
 20 
 
 RAILROAD TRANSPORTATION. 
 
 TABLE A. 
 
 
 M. S. 
 
 M. L. 
 
 N. &D. 
 
 K. B. 
 
 B. B. 
 
 R. B. 
 
 G. B. 
 
 Movement expenses 
 
 41.367 
 18. 161 
 
 14.453 
 26.019 
 
 38.589 
 12.924 
 17.179 
 31.308 
 
 100.000 
 
 38.594 
 12.259 
 
 17.554 
 31.593 
 
 22.428 
 
 4.367 
 17.964 
 
 55-241 
 
 19.490 
 
 6.209 
 
 22.505 
 
 51.796 
 
 100.000 
 
 17-634 
 
 5.832 
 
 17-295 
 
 59-239 
 
 28.761 
 5.007 
 Q.361 
 
 56.871 
 
 Station expenses 
 
 Maintenance of road 
 
 Interest on investment 
 
 
 Total 
 
 100.000 
 
 100.000 
 
 100.000 
 
 100.000 
 
 100.000 
 
 From this table will be seen the great diversity existing in the 
 relative proportions of each class of expenditures. • 
 
 The move^nent expenses, the cost of conveying freight from one 
 place to another after it is loaded in the cars — the transportation 
 expenses proper — are 41.3 per cent on the Main Stem, and only 17.6 
 on the Richmond Branch, of the total operating expenses. We have 
 therefore in one case 5 8. 7, in the other 82.4 per cent of the total 
 operating expenses, vi'hich are entirely uninfluenced by the amount of 
 work performed as measured by weight and distance, or ton-miles. 
 
 The station expenses vary from 4.3 per cent on the Knoxville 
 Branch to 1 8.1 per cent on the Main Stem of the total operating 
 expenses. 
 
 The cost of maintenance of road is 9,3 per cent on the Glasgow 
 Branch, and 22.5 on the Bardstown Branch. 
 
 The interest account is 26 per cent on the Main Stem, and 59.2 
 per cent on the Richmond Branch. 
 
 With such great variations in the constituting elements of the cost 
 of transportation uniformity in the final results can not be expected. 
 
 CAUSES OF DIFFERENCE IN COST OF TRANSPORTATION. 
 
 I will now compare the expenditure of each class per ton-mile 
 on the seven roads, and show more particularly the reasons for the 
 great difference in cost. 
 
 The following table (B) shows each class of operating expenses per 
 ton-mile on the seven roads operated by the L. & N. R. R. Co. 
 
 TABLE B. 
 
 1 
 
 Cost per Ton-mile. ! M. S. 
 
 M. L. 
 
 N. &D. 
 
 K. B. 
 
 B. B. 
 
 R. B. G. B. 
 
 
 Cents. 
 .7365 
 .3233 
 .2573 
 
 Cents. 
 .8102 
 .2714 
 .3607 
 
 Cents. 
 
 -9787 
 .3x09 
 
 .4451 
 
 1-7347 
 .8011 
 
 2.5358 
 
 Cents. 
 
 .9364 
 .1S23 
 
 -7499 
 
 Cents. 
 
 1.5039 
 
 .4791 
 
 1.7366 
 
 3-7196 
 3.9968 
 
 7.7164 
 
 Cents. Cents. 
 
 1.6934 i 5.4928 
 
 .5601 \ .0563 
 
 1.6608 1.7877 
 
 Station expenses 
 
 Maintenance of road 
 
 
 Total operating expenses 
 
 1.3171 
 
 .4633 
 
 I . 7804 
 
 1-4423 
 •6574 
 
 2.0997 
 
 1.8686 
 2.3061 
 
 3.9143 8.2368 
 5.6887 10.8615 
 
 Interest 
 
 
 Total oper'g exp. and interest... 
 
 4.1747 
 
 9.6030 19.0983
 
 RAILROAD TRANSPORTATION. 
 
 21 
 
 Movement expenses (comprised of items 41-73, tables II and III). — 
 It appears that on the first four roads this class of expenditures varies 
 from .73 cents to .97 cents per ton-mile; on the last three named from 
 1.50 cents to 5.49 cents per ton-mile. The first four roads belong to 
 that class on which fully loaded freight-trains can be started from one 
 terminus of the road ; on the last three named trains are started at 
 regular times, regardless of the amount of load that is to be carried. 
 Hence we find greater agreement in the cost of moving one ton one 
 mile on the first four roads than on the latter, on which the cost 
 depends altogether upon accidental causes. 
 
 If on the first four roads the grades, curves, and the cost of labor 
 and material were the same, and also the character of the business, 
 then the cost per ton-mile should be the same; but as these elements 
 of cost differ, uniformity in the cost even in the movement expenses 
 can not be expected. 
 
 The character of the business of a road has a great influence upon 
 the cost of transportation. 
 
 We find the average train-loads carried on the first four roads, and 
 the movement expenses per ton-mile, as follows: 
 
 Average train-loads tons 
 
 Movement expenses per ton cents 
 
 M. S. 
 
 M. L. 
 
 N.& D. 
 
 96 
 0.97 
 
 135 
 0.73 
 
 "3 
 0.81 
 
 K. B. 
 
 77 
 0.93 
 
 On the Main Stem the average net load carried per train is nearly 
 twice as much as on the Knoxville Branch. 
 
 On the first-named road a large amount of freight is carried over 
 its whole length; while on the latter, which is a mere local road, it 
 only passes over a portion of its whole length. The capacity of the 
 locomotive and train can not therefore be as fully utilized on the latter 
 as on the former road. 
 
 On the Main Stem the tonnage in one direction is 73 per cent of 
 the tonnage in the other direction, while on the Knoxville Branch it 
 is only 21 per cent; hence more empty cars have to be run on the 
 latter than on the former road. 
 
 The result is that an average of 135 tons of freight is being carried 
 per train on the Main Stem, while only 77 tons can be carried on the 
 Knoxville Branch; yet the same attention is paid on both roads to 
 secure maximum loads to each train.
 
 2 2 RAILROAD TRANSPORTATION. 
 
 It is the character of the business peculiar to each road that brings 
 about this great difference, which of course influences the cost of 
 transportation. 
 
 On roads on which there is not sufficient business to secure full 
 loads to the trains from one or the other of the terminal stations the 
 difference in the movement expenses per ton is found still greater. 
 
 The following table shows the average loads carried in the trains 
 of the three branch roads, and the cost per ton-mile for moving the 
 freight : 
 
 G. B. 
 
 B. B. 
 
 R. B. 
 
 18.2 
 1.5 
 
 24.0 
 1.7 
 
 Average number of tons freight carried on one train 18.2 24.0 4.9 
 
 Movement expenses per ton-mile cents 1.5 1.7 5.5 
 
 It is on account of the small loads carried on the Glasgow Branch 
 per train (4.9 tons) that the movement expenses are so much larger 
 than on the other branches, on which the trains carry from 18.2 
 to 24 tons. 
 
 Station expenses (items 30-40, tables II and III). — The elements 
 controlling the cost per ton-mile for station expenses are — 
 
 {a) The cost of handling one ton of freight — for loading, unload- 
 ing, clerking, agents' salaries, depot expenses, switching, etc. 
 
 {h) The length of haul. 
 
 Supposing that the cost of handling freight per ton were the same 
 on all roads and at all stations of a road, then the cost per ton-mile 
 of freight would vary according to the length of haul. For each 
 particular length of haul there would be a different cost per ton-mile 
 for this service. 
 
 By reference to Table IV it will be seen that the average cost of 
 station expenses per ton of freight handled on the Main Stem of the 
 road is 23 cents. For freight that passes over the whole length 
 of the line, say between Louisville and Memphis, the cost per ton- 
 mile would be ^3.^-=^o.\2 cents, and for freight carried only five 
 miles it would be ^-"3--^= 9. 2 cents. We have therefore a difference 
 between the cost per ton-mile from 0.12 to 9.2 cents, although the 
 actual cost of performing the work was the same in both cases; thus 
 showing that the ton-mile is not a proper unit of measure of cost of 
 this service. 
 
 But there is even considerable variation in the cost of handling
 
 RAILROAD TRANSPORTATION. 23 
 
 one ton of freight at various stations, as will appear from an exami- 
 nation of Table IV, which shows the station expenses per ton and the 
 number of tons of freight handled at each station. We can ascertain 
 from this table, in connection with Table XXVII, the average cost per 
 ton-mile of freight handled at each station. 
 
 The latter table gives the number of ton-miles of freight received 
 and forwarded from each station. Dividing the number of tons into 
 the number of ton-miles gives the average haul, and dividing this into 
 the cost per ton for handling gives the average cost per ton-mile for 
 handling freight. 
 
 For example, take Brooks Station. Number of tons of freight 
 received and forwarded (Table IV), 654; freight to and from Brooks 
 Station was carried 14,335 utiles (Table XXVII) ; therefore the average 
 haul ^^•?|-^=2i.8 miles; station expenses per ton at Brooks Station 
 (Table IV), 71 cents; cost per ton-mile JJ;g-=3.26 cents. To this 
 has to be added the expenses at the station from or to which the 
 freight was forwarded. 
 
 If both stations are known, the cost per ton-mile for station ex- 
 penses can be readily ascertained from Table IV. For example, for 
 freight shipped between Louisville and Brooks Station, distance 9.2 
 miles : 
 
 Station expenses at Brooks Station per ton 71.0 cents. 
 
 Station expenses at Louisville per ton 24.3 " 
 
 Total cost per ton 95.3 " 
 
 Length of haul, 9.2 miles; cost per ton-mile, 10.4 cents. 
 
 This example sufficiently illustrates the great variety in cost, and 
 the impossibility of making the ton-mile the measure of cost of or 
 compensation for this service. The ton handled would be a more 
 correct measure, although there is necessarily much variety even in 
 this cost, as we have seen, and as will still further appear from an 
 examination of Table IV. 
 
 It must therefore be evident that it is impossible to predetermine 
 the cost per ton-mile of freight for handling without taking into 
 consideration the length of the haul and the conditions under which 
 the station service has to be performed. 
 
 Maintenance of roadway and general expense (items 1-29). — The 
 two elements that determine the cost per ton-mile for this service are —
 
 24 
 
 RAILROAD TRANSPORTATION. 
 
 time. 
 
 time. 
 
 The cost of maintaining one mile of road, etc., during a given 
 The number of tons of freight passed over it during the same 
 
 The former differs on each road, and so does the latter: hence 
 uniformity in cost per ton-mile is impossible. 
 
 The following table shows the cost of maintenance of roadway 
 and general expense per mile of road on the seven roads operated by 
 the Louisville & Nashville Railroad Company during the last year, 
 and the average number of tons of freight passed over one mile of 
 each road ; also the cost per ton-mile : 
 
 M. s. 
 
 M. L. 
 
 Cost of maintenance of road per mile 1 * „, „_; 
 
 per year (Table III, item 29) ...... ( ^'-'^^T-s?! 
 
 Tons of freight passed over one mile 1 ; ^__z:/r„j 
 
 of road f I 4^3,t>f2 
 
 Cost per ton-mile cents 0.26 
 
 N.&D.I K.B. 
 
 u 
 
 B.B. 
 
 $1,142.25 $1,243.49} 906.76' 436.69 
 
 152,273] 143.378' 72^4561 11,538 
 0.361 0.44] 0.7s j 1.74 
 
 R.B. 
 
 G.B. 
 
 436.61 
 
 16,656 
 1.66 
 
 262.73 
 
 6,137 
 1.78 
 
 Part of the cost of maintenance of roadway and buildings is 
 chargeable to the passenger traffic. The division of charges between 
 the two classes of traffic has been made in proportion to train-miles. 
 It follows from this that the cost per ton-mile of freight is in a 
 measure affected by the relative use made of a road by the passenger 
 and freight traffic. 
 
 From this statement will be noticed the great difference in cost 
 of maintaining one mile of road, buildings, etc. On the Main Stem 
 this cost is $1,857.87, on the Glasgow Branch $262.73 per mile. 
 
 An examination of the items from i to 28, Table III, will show in 
 what particulars these differences occur. A few may be mentioned 
 here. The cost per mile on the Main Stem and Glasgow Branch is 
 as follows: 
 
 M. s. 
 
 G.B. 
 
 Renewal of ties 3^8.89 
 
 Bridge superstructure , 250.26 
 
 Ditching 69.23 
 
 General expense 346.14 
 
 Salaries, insurance, and taxes 100.40 
 
 32.96 
 
 25.14 
 26.06 
 
 Total I $1,134.92 
 
 $84.16 
 
 The difference in cost in these five items on the Main Stem and 
 Glasgow Branch is $1,050.76 per mile of road. Part of this great
 
 RAILROAD TRANSPORTATION. 25 
 
 difference is caused from the fact that on one road greater expenditures 
 were made during this year than was due to the year's business; on 
 the other road less. It will be remembered that the yearly depreci- 
 ation of cross-ties on the Main Stem was found to be for i6j^ years 
 at the rate of $257.11 per mile, while during the past year there was 
 expended $368.89 on the Main Stem, and on the Glasgow Branch 
 only $32.96 per mile; the first sum more, the latter considerably less 
 than is required to make good a year's depreciation. 
 
 There are great differences in other expenses, such as repairs of 
 bridges, on the two roads. On the Main Stem, as has been men- 
 tioned before, the cost of bridge repairs during the last year was 
 unusually heavy, while on the Glasgow Branch, with only one small 
 bridge, the cost is very small. The general expenses of administration 
 on the Main Stem are not incurred on the Glasgow Branch, which is 
 also exempt from taxation. Hence the great difference in cost of main- 
 tenance of road and buildings and general superintendence between 
 the two roads. 
 
 When we examine into the differences existing in regard to the 
 amount of business transacted in one year over one mile of road — the 
 other element named which enters into the cost of one ton per mile — 
 we find the variation still greater. On the Main Stem 433,662 tons, 
 on the Glasgow Branch only 6,137 tons, pass over one mile of road 
 per year. We can therefore not be surprised that the cost on the Main 
 Stem for maintenance of road is only one fourth of a cent per ton-mile 
 and on the Glasgow Branch 1.8 cents. 
 
 hiterest account. — The original cost of the road and the rate of 
 interest form one element and the amount of business transacted the 
 other which determines the cost per ton-mile. 
 
 The cost of roads per mile and the business transacted over the 
 same vary so much that the cost per ton-mile for interest can not be 
 expected to be the same in any two cases. 
 
 It is impossible to predetermine what is a proper charge for interest 
 on any particular road until these elements — viz., the cost of road and 
 the amount of business — are known. 
 
 On the Main Stem of the Louisville & Nashville Railroad, dividing 
 the number of ton-miles of freight carried into the interest chargeable 
 to the freight business, the cost per ton-mile is 0.46, while on the Rich- 
 mond Branch it is 10.86 cents, over twenty times as much. On the 
 
 D
 
 26 RAILROAD TRANSPORTATION. 
 
 five Other roads the interest charge varies from 0.65 to 5.7 cents per 
 ton-mile. (For further particulars refer to Table B, page 20.) 
 
 We have now considered the variation in each class of expendi- 
 tures and the causes therefor per ton-mile. When we find so much 
 variation in the elements which make up the cost of transportation 
 we can not expect to find uniformity in the total cost. 
 
 From Table B it appears that the variation in the total cost per 
 ton-mile is from 1.78 cents on the Main Stem to 19.09 cents on the 
 Glasgow Branch. The work performed — viz., the movement of one 
 ton of freight one mile — is the same on all roads, yet the cost of per- 
 forming is ten times more on one road than on the other. 
 
 Great as this variation is on the seven roads under the same man- 
 agement, the variation of the cost per ton-mile is still greater even 
 on the same road, depending as it does upon the different conditions 
 under which the service has to be performed. It would lead here too 
 far to thoroughly analyze the cost of railroad transportation in all its 
 details, and I will only state that a careful investigation shows that 
 under the ordinary conditions under which transportation service is 
 generally performed the cost per ton-mile in some instances may not 
 e'xceed one seventh of a cent and in others will be as high as 73 cents 
 per ton-mile on the same road. The lower cost applies to freight 
 carried in cars that otherwise would return empty; the higher cost 
 to freight in small quantities carried short distances. 
 
 It is impossible to predetermine the cost of carrying freight on 
 any one road unless the conditions under which it is to be carried, 
 as far as they affect the cost of transportation, be previously known. 
 
 In order to estimate the cost of transportation under the various 
 conditions that occur it is necessary to classify the expenditures, and 
 to separate those that increase with the amount of work done from 
 those that are fixed and independent of it; and to ascertain the ratio 
 of increase of cost with the increase of work. Without such an analysis 
 of the cost it is impossible to solve the question of cost of transpor- 
 tation that arises in the daily practice of railroad operation. A mere 
 knowledge of the average cost per ton-mile of all the expenditures 
 during a whole year's operation is of no value whatever in deter- 
 mining the cost of transporting any particular class of freight, as no 
 freight is ever transported under the average condition under which 
 the whole year's business is transacted. We can therefore not make
 
 RAILROAD TRANSPORTATION. 27 
 
 the average cost per ton-mile the basis for a tariff, if it is to be based 
 upon cost; but we must classify the freight according to the condi- 
 tions affecting cost, and ascertain the cost of each class separately. 
 
 A formula is given on page 48, showing the various elements enter- 
 ing into the calculation of the cost of railroad transportation. 
 
 COMPARISON BETWEEN RAILROAD AND OTHER TRANSPORTATION. 
 
 The problem of ascertaining the cost of railroad transportation is"* 
 not quite so simple as it may at first sight appear. It is much easier 
 to determine the cost of wagon, canal, or steamboat transportation. 
 The common carrier by wagon or canal knows the exact amount 
 of toll he has to pay, and assumes no risk of an investment in an 
 expensive roadway. Nature furnishes a roadway to the carrier by 
 steamboat, and keeps it in repair free of charge. Hence in esti- 
 mating the cost of transportation by wagon, canal, or steamboat two 
 of the most uncertain and changeable elements, and at the same 
 time the costliest, of railroad transportation are eliminated from the 
 calculation. Railway companies are not only common carriers ; they 
 are also proprietors of a roadway. Their tariff charges are not only 
 for transportation service proper, for the service rendered as common 
 carriers, but also for the use of the roadway, for its maintenance, and. 
 for the risk assumed in the investment. 
 
 Notwithstanding this distinctive character of railroad service, as 
 compared with that performed by other common carriers, it is sought 
 to regulate the tariffs of railroads and to judge, compare, and criticise 
 the same by the same measure or rule that applies properly only to 
 the service of common carriers; viz., the measure of weight of freight 
 and distance to which it is carried. The idea prevails that the cost of 
 transportation of a ton of freight on one railroad should not materi- 
 ally differ from that on others, and that the cost of moving freight 
 should be in exact proportion to the distance to which it is carried. 
 
 These rules might be applied with some degree of justice to the 
 cost of moving freight, although even here discrimination between 
 different roads and different lengths of haul must be made; but the 
 measure of weight and distance — the ton-mile — can not be used as a 
 measure of cost incurred by railroad companies as proprietors of the 
 roadway. This service must be measured by different rules. The cost 
 of the roadway, the rate of interest and discount in obtaining money.
 
 28 RAILROAD TRANSPORTATION. 
 
 the cost of the maintenance, and the actual use made of the roadway 
 form the proper data for calculation. 
 
 On the seven roads operated by the Louisville & Nashville Railroad 
 Company the cost of maintenance of road and interest on investment, 
 when distributed over the number of ton-miles carried over the roads, 
 is as follows (see Table B, page 20) : 
 
 Cost per ton-inile cents 
 
 M.S. M. L. IN. & D. K. B. B. B. R. B. 
 
 0.720611,0181 1.2462 3,0560 5.7334 7.3495 
 
 G. B. 
 
 12.6492 
 
 This statement shows the great difference in cost, from 0.7 cents to 
 12.6 cents per ton-mile, although the service rendered is exactly the 
 same : the use of the roadway for one mile for the purpose of moving 
 over it one ton of freight. 
 
 Were these roads owned by one party and used by another (the 
 latter common carriers merely), the toll, or the charge for the use of 
 the roadway, would have to be made according to these figures, in 
 order to reimburse the proprietor for the cost of the service. If the 
 .common carrier would then charge separately for his services for moving 
 the freight by the ton-mile, and for handling, warehousing, and taking 
 care of it by the ton, the difference between the charges for the service 
 as common carriers on the different roads would not be so great. 
 
 If the charges for railroad transportation were thus subdivided, the 
 reasonableness of the same could be more readily explained and un- 
 derstood. The confusion which exists in the minds of some people 
 on the subject of railroad tariffs arises from the prevailing practice 
 of combining the charges for three distinct services in one, and 
 applying a measure to the whole which only can properly be. applied 
 to a portion of it. 
 
 So strong has become the conviction in the public mind that there 
 should be uniformity in the cost of railway transportation that it has 
 found expression in some of the states in legislative acts enforcing 
 uniformity in compensation, while the natural laws governing cost, 
 causing, as we have seen, so great a difference, are allowed to operate 
 undisturbed. 
 
 The ton-mile, without further inquiry as to its adaptability, is made 
 the measure of cost. If by comparing the tariffs of different roads, or 
 the tariff for different services on the same road, a difference be dis-
 
 RAILROAD TRANSPORTATION. 29 
 
 covered, the road charging the higher rates stands convicted of prac- 
 ticing extortion and unjust discrimination. 
 
 Upon such evidence as this laws have been enacted in some states 
 for the purpose of preventing extortion, and which affect injuriously 
 railroad property and the rights of a great many innocent people. 
 
 GOVERNMENTAL REGULATION OF RAILROAD TARIFFS. 
 
 It can not be denied that a law forcing railroad companies to 
 furnish the use of their roads and to transact the business of a com- 
 mon carrier for less than cost is simply a law of confiscation, no 
 matter under what pretext of authority it is enacted. It can hardly 
 be maintained, in the light of our knowledge of human nature, that 
 at the time the contracts between some of the states and the builders 
 of the roads were made the latter were given to understand, as dis- 
 tinctly and clearly as they are now made to understand, that the state 
 reserved the right to confiscate their property at pleasure. It appears 
 that the interpretation of the law by one party to the contract was a 
 great surprise to the other, originating as it did many years after the 
 contract was made, during which time the construction now put upon 
 it was not thought of or sought to be enforced. In ordinary cases 
 the true meaning of a contract, if not unequivocally expressed, is 
 determined from the manner in which the same has been executed 
 through a long period of time ; but this does not seem to hold good 
 when railroads are parties to the contract. 
 
 The question as to the right and the extent of the right of the 
 government of a state or the national government to prescribe fixed 
 compensation for specific transportation services, or to regulate in a 
 more general manner the railroad tariffs, is one of great interest and 
 importance to all owners of railroad property. 
 
 The relations of the Louisville & Nashville Railroad Company 
 to the states in which it is located are well defined by the several 
 charters ; yet the national government, at least one branch of it, has 
 lately claimed jurisdiction over railroad tariffs, on the plea of having 
 the power under the constitution to regulate commerce between the 
 states; and there prevails a general tendency in the public mind that 
 something must be done in the way of railroad legislation. 
 
 In the last legislature of the state of Kentucky a law was passed 
 through the Senate making it obligatory on all the roads in the state
 
 30 RAILROAD TRANSPORTATION. 
 
 to carry way freight (including the cost of handling it) at a rate not 
 exceeding 25 per cent over the lowest rate per mile charged at the 
 same time for through freight. A full explanation of the chartered 
 rights of the company, and of the bearing and effect of such a law 
 upon the railroads of the state and upon public interests, was made to 
 the intelligent committees of both legislative branches, and this was 
 sufficient to prevent the final enactment of that law. 
 
 In the legislature of the state of Tennessee several laws on the 
 subject of railroad tariffs passed through one and some through the 
 other branch of the legislature, and only failed at the close of the 
 session for want of time. 
 
 These laws were of such a character that had they passed, and 
 could they have been enforced, would have ruined the whole railroad 
 property of that state. 
 
 It is true that such legislation could be clearly proven illegal and 
 void, both under our charters and under the constitutions of the states, 
 yet during the time required to do so great losses might be inflicted 
 upon the stockholders, and expensive and troublesome litigation would 
 follow. All of which can be avoided by a more thorough knowledge 
 of the subject on the part of the people and their representatives. It 
 can be readily shown that many of the difficulties of what is called 
 the railroad problem are only apparent. They have their existence 
 in the ignorance of the people upon this subject, and as soon as 
 the facts appear in their full and true light most of them will vanish 
 without the aid of legislative interference. 
 
 It is with a view of bringing about a clearer and better under- 
 standing of railroad transportation that I have referred to it in this 
 report at so great length. 
 
 Nine tenths of the stockholders of the Louisville & Nashville 
 Railroad and its leased lines are citizens of the states in which their 
 roads are located ; the question of legislative control of railroads in 
 this instance is not a mere party question between the people and 
 "soulless corporations," but it is a question between the people who 
 furnish the transportation and the people who use the roads. To a 
 great extent they are the same, a great portion of the road being 
 owned by cities and counties. A careful study therefore by the 
 people of the facts and questions involved becomes almost a matter 
 of necessity in the preservation of their own property.
 
 RAILROAD TRANSPORTATION. 
 
 31 
 
 The subject of legislative enactments regarding the tariffs of rail- 
 roads not owned by the government must be considered in two 
 aspects — first, as to the abstract right of the government to establish 
 tariffs; and second, as to the practicability of establishing and en- 
 forcing the same so as to accomplish the object for which the control 
 is undertaken. 
 
 The first question is one of law, and must be decided by the courts 
 in accordance with contracts, charters, and constitutions; but the 
 second is a question for the consideration of experts in the manage- 
 ment of railroads, and must be decided from a knowledge of the facts 
 and the natural laws controlling the subject. 
 
 Should the courts decide that the government has the right to 
 establish or control railroad tariffs, and it be found in the nature of 
 the case that the exercise of that right necessitated the violation of 
 other fundamental laws, the question as to the abstract right would 
 become of secondary importance. 
 
 There is a decision on record that bears upon this subject. It is 
 not reported in the law-books, but has been universally approved. A 
 certain citizen of Venice was given the right under the law to take 
 one pound of flesh from a fellow-citizen. He found it impossible to 
 obtain It without also taking blood, and probably life, to which he had 
 no lawful claim; and the judgment therefore remained unexecuted. 
 
 The right of the government to establish and enforce railroad 
 tariffs does not carry with it the right to confiscate the property of 
 railroad c ompanies. If a tariff can not be established and enforced 
 unless the property of railroad companies is used without due com- 
 pensation and without their consent, then this right ought not to be 
 exercised, unless it be contended, as it has been by some, that "might 
 is right." But even then it would soon be discovered that to deal 
 unjustly with railroad companies will react sooner or later injuriously 
 upon the public interest, and that to act in accordance with the dic- 
 tates of justice in this as in all other cases will prove the best policy. 
 
 The question as to the right and policy of governmental interfer- 
 ence with railroad tariffs practically resolves itself into this question : 
 whether it be possible for the legislature to undertake this control 
 without the violation of other laws and the rights of parties interested, 
 and in such a manner as to fully accomplish the object for which this 
 control is undertaken. This question I will now consider.
 
 32 
 
 RAILROAD TRANSPORTATION, 
 
 PRINCIPLES UPON WHICH RAILROAt> TARIFFS MUST BE CONSTRUCTED. 
 
 The first principle that should guide the formation of railway 
 tariffs stands written in the good book — " the laborer is worthy of his 
 hire." Those furnishing transportation for others should be reim- 
 bursed for at least the cost. Had this principle not been recognized 
 at the time the roads were built, few would now be in existence, and 
 if it is to be repudiated now, few will be constructed hereafter. The 
 proper basis of railroad tariffs is therefore the cost of the transporta- 
 tion service. 
 
 I have shown in this report the great variation in the cost of rail- 
 way transportation on different roads, and the causes which necessarily 
 bring about this result. From it necessarily follows the impossiblity 
 of enacting general laws establishing tariffs applicable to more than 
 one road. 
 
 What is reasonable compensation for railway transportation service, 
 or what constitutes just or unjust discrimination in railway charges, is 
 not a question that can be decided a priori, or that can be formu- 
 lated into a general law. It can only be decided in each individual 
 case, when all the conditions under which the service is per- 
 formed and the elements controlling' its cost are known; in most 
 cases it can only be decided correctly after the service has been 
 performed. 
 
 It would be just as sensible to predetermine by legislation what 
 shall be the cost of raising a bushel of corn as to predetermine the 
 cost of carrying a ton of freight. The action of the sun and rain 
 upon the growth of the corn and the quantity of the yield are no less 
 uncertain elements than some of the elements which enter into the cost 
 of transportation, service. 
 
 The average cost of moving one ton one mile on the Main Stem 
 of the Louisville & Nashville Railroad is 1.78 cents; on the Glasgow 
 Branch 19.09 cents. What justice would there be in establishing a 
 law requiring both roads to work for the same compensation ? Nor 
 would it be more just to classify the railroads and enact a special 
 tariff for each class, as no general laws exist or have as yet been dis- 
 covered under which such classification could be made; the various 
 combinations of elements of cost are different on and peculiar to 
 each road, controlled as they are by local causes.
 
 RAILROAD TRANSPORTATION. 33 
 
 The great difference in cost referred to in this report occurs in the 
 average cost per ton-mile of transportation during the period of a 
 whole year; but there is still greater difference in the cost of trans- 
 portation of one ton one mile on the same road, varying with the 
 conditions under which the service is performed, according to the 
 length of haul, the quantities in which freight is transported, and 
 whether the freight is carried in cars that would have to return empty 
 or in special trains. I have mentioned that according to these and 
 other conditions it may cost one seventh of a cent only in some 
 cases and seventy-three cents in others to transport one ton of freight 
 one mile. 
 
 The labor therefore of forming a tariff based strictly upon cost is 
 very intricate, and not of such a character that it can be properly per- 
 formed by legislative bodies as at present constituted. The only mode 
 in which they could act would be to appoint competent officers, whose 
 duty it would be to ascertain the cost of transportation on each indi- 
 vidual road, and to establish a tariff accordingly. If this duty could 
 be properly performed, few railroad companies would complain, as the 
 majority work for less than cost. 
 
 A tariff so established strictly upon the basis of cost would, how- 
 ever, be of little use unless it be accompanied by a law forcing the 
 people to ship over the road a certain quantity of freight at the estab- 
 lished rates. If they are left free to select other modes of transporta- 
 tion that may be cheaper, then it would soon become apparent that 
 the railroad would be of use only to a very limited number of people ; 
 as the number of shippers is decreased, the cost of transportation 
 would be increased in many cases to such an extent that the -turnpike 
 would furnish a cheaper mode of transportation. The fact would 
 soon become evident that railroad tariffs can not be based upoji the cost 
 of transportation alone. Other elements enter into their formation 
 that can not be ignored, if it be intended to develop fully the useful- 
 ness of railroad property both to its owners and to the public. 
 
 The question that greatly controls railroad tariffs is what is the 
 service worth, not what does it cost; and this is a mere commercial 
 question, uncontrollable by acts of legislation. The relative value of 
 an article at the place from and to which it is shipped determines the 
 charges for transportation it can bear. If a greater charge is made 
 than the difference in these values, the article can not be moved. It
 
 34 RAILROAD TRANSPORTATION. 
 
 may therefore become necessary to charge on some articles less than 
 the full cost of transportation in order to enable it to be moved at all; 
 and this necessitates again to charge more on others which can bear 
 higher charges. 
 
 An element is here necessarily introduced of a purely commercial 
 character, and which requires a knowledge of the value of articles in 
 the different markets of the country between which they are to be 
 exchanged, situated often far beyond the limits of any one state. 
 This element must necessarily work constant changes in tariffs, and 
 it would therefore be impossible to predetermine the same or fix them 
 by legislative action. 
 
 There is another disturbing element that prevents fixed railroad 
 tariffs. // is competition. The simple question requires to be an- 
 swered. Will you carry freight and passengers for the same that other 
 transportation lines charge, either by rail or river, or will you not carry 
 them at all ? 
 
 All that has to be known by the railroad manager to answer this 
 question is the minimum cost at which the service can be performed. 
 K the obtainable rate exceeds cost, no matter how little, it becomes 
 his interest to accept the terms offered. The important question to 
 be decided is what is the minimum cost? 
 
 In the statements I have given on page 20 the average cost of 
 transportation per ton-mile for four different classes of expenses were 
 given. Two of these classes are not affected by the work done, but 
 are fixed; viz., the cost of maintenance of road and the interest on 
 the investment. On the Main Stem of the Louisville & Nashville 
 Railroad they amounted to 0.72 cents per ton-mile, or 40 per cent of 
 the whole cost, and the expenses for moving and handling freight were 
 1.06 cents per ton-mile. 
 
 Now it follows that when freight is to be carried at a rate fixed 
 by competition, and can not be carried at all if a greater rate is 
 demanded, the Louisville & Nashville Railroad Company can carry 
 the same at the rate of 1.06 cents per ton-mile, and not lose thereby; 
 if it could obtain more, the additional receipts would be just so much 
 profit, applicable to lowering the rate on other freight. Yet if the 
 Louisville & Nashville Railroad Company was to be forced by law to 
 do all their business at this low rate, the expenses would exceed the 
 income by 40 per cent, and the road could not be operated at all.
 
 RAILROAD TRANSPORTATION. 35 
 
 Tlic company would prefer to abandon the competitive business and 
 arrange the tariff for way business, by charging, when this is possible, 
 as much more as the profit on the competitive business would have 
 amounted to. 
 
 From this it will be seen that the transaction of this competitive 
 business, apart from the indirect benefits which it may exercise, is 
 more to the advantage of the shipper whose location does not give 
 him competitive privileges than to the railroad company. 
 
 Notwithstanding this fact, the carrying of competitive freight at 
 low rates> k th e m ost fruitful source of complaint on the part of the 
 shipper who pays higher rates. It has given rise to the charges so 
 commonly preferred against railroad companies of making unjust 
 discriminations in their tariffs, and against which legislative protec- 
 tion has mainly been invoked. 
 
 JUST AND UNJUST DISCRIMINATION. 
 
 It is maintained that to carry freight between distant competitive 
 points at lower rates than between intermediate points where no com- 
 petition exists is an act of injustice to the shippers at the latter points. 
 This conclusion is based upon the assumed principle that common 
 carriers are bound to serve their customers alike. The application, 
 however, of a general principle to complicated transactions, such as 
 take place in the business of common carriers, without taking into 
 account a// the facts bearing upon the same, is apt to lead to erro- 
 neous conclusions, as it does in this case. 
 
 I will illustrate this subject by a special case which is a represen- 
 tation of many. Louisville and Memphis are connected by navigable 
 rivers, and in the exchange of commodities between the two cities 
 they have always had the benefit of low rates of river transportation. 
 A railroad 377 miles long is built connecting the two cities, passing 
 through a number of interior places, which had before only imperfect 
 communications. Suppose one of these places, called A, be located on 
 the line of this road, 100 miles from Memphis and 277 from Louisville ; 
 how is it affected by the construction of the road? Before the road 
 was built freight from Louisville destined to A was shipped to Memphis 
 by river and then by wagon to A. Since the road has been built there 
 are two routes from Louisville to A, one by river to Memphis and, 
 thence by rail, and the other by rail direct to A. Taking the first
 
 36 RAILROAD TRANSPORTATION. 
 
 route, the charge for shipping to A is made by adding to the river rate 
 from Louisville to Memphis the rail rate for 100 miles from Memphis 
 to A. This latter rate is much below the rate formerly charged by 
 wagon, and to the extent of this difference the shipper at A has been 
 benefited by the construction of the road, not to mention the greater 
 convenience and saving in time of which he now gets the benefit. 
 This ought and would be satisfactory if the road stopped at A ; but 
 the fact that a new route is opened to him, direct from Louisville, 
 only 277 miles, causes all the trouble. 
 
 The railroad is obliged to carry freight from Louisville to Memphis 
 at the low river rate, which is much below the average cost of railroad 
 transportation; but it derives from this rate a small profit, for reasons 
 fully explained on page 34. It is obliged for the same reasons to 
 charge its customer at A more per ton-mile for the distance of 277 
 miles than is charged to Memphis; but this can in no case exceed 
 the sum of the river and rail rates from Louisville to A via Memphis, 
 for if it did, the latter route would be the preferred one. 
 
 Now the fact that the railroad carries freight from Louisville to 
 Memphis through A at a lower rate than it carries it from Louisville 
 to A is considered an act of injustice to the shipper at A, and he 
 demands that he be put on the same, or even a better, footing with 
 the shipper at Memphis, who always had the advantage of lower rates 
 of transportation before the road was built. His demand amounts to 
 this, that the railroad company having expended millions of dollars 
 in the construction of a railroad connecting the interior places, which 
 were without the improved modes of transportation, with two cities 
 upon navigable rivers, conferring thus a great benefit upon those 
 interior places, shall, in consideration of having done so much, do 
 still more, and secure for them the same advantages possessed by the 
 places situated upon the banks of navigable rivers. 
 
 It is rather surprising that some courts have decided this position 
 to be right. They have declared it unjust discrimination for railroad 
 companies to charge higher rates of transportation to intermediate 
 than more distant points, a decision based upon the improper appli- 
 cation of the principle that common carriers must not make any 
 distinction among shippers. 
 
 From the foregoing illustration it will appear that discriminations 
 necessarily have to be made ; but it will also appear that it is not
 
 RAILROAD TRANSPORTATION. 37 
 
 the common carrier who creates the same arbitrarily, but the nature 
 of things makes them necessary. To pursue anotlier course than that 
 indicated would result to the disadvantage of all concerned and benefit 
 no one. Were the low competitive freight to be refused, the cost of 
 carrying other freight would be increased. If the same rate was to be 
 charged to all interior points as to the competitive points, the railroad 
 could not be operated at all. 
 
 Different localities are more or less favored in regard to transpor- 
 tation facilities, either by nature or the enterprise of man. It can not 
 be maintained that it is the duty of the common carrier to equalize 
 these existing inequalities at his own expense. All that is required 
 of him is not to create them himself arbitrarily. He must treat all 
 alike that are situated alike ; but he can not be bound to wipe out 
 existing differences. He may be obliged to carry freight at a lower 
 rate to some localities than to others, but this in itself does not con- 
 stitute an injustice or injury to the shipper in a less favored locality, 
 as long as the charges made are reasonable in themselves and alike to 
 all in the same situation. 
 
 Discriminations are the necessary result of competition, and com- 
 petition is the best protection against extortionate charges — much more 
 efficient than any artificial legislative device. To take away the right 
 from railroad proprietors to establish their tariffs upon the recognized 
 principles that guide all other commercial transactions, and substitute 
 fixed tariffs or arbitrary rules on which they must be based, would 
 destroy the great usefulness of railroads. 
 
 It may be and has been asserted that the effect of competition is 
 not felt upon way business for which no direct competition is possible. 
 This, however, is an erroneous view. When there is competition at 
 any one point upon a railroad it makes itself felt over some portion 
 of the road, more or less, according to the situation of the competing 
 line. The truth of this can be illustrated by again referring to the 
 case already cited. The rate from Louisville to an intermediate 
 station on the road from Louisville to Memphis is established, as I 
 have shown, by adding to the river rate to Memphis the railroad rate 
 frorti Memphis to this intermediate station, which I have called A. 
 The rail rate is limited by the charter, which prescribes maximum rates, 
 or where this is not the case it would be limited by the consideration 
 as to what constitutes a reasonable compensation for loo miles of rail
 
 J 
 
 8 RAILROAD TRANSPORTATION. 
 
 transportation, and could in no case exceed the rates charged for 
 transportation by other modes that might be available from Memphis 
 to A. It is therefore the competitive river rate from Louisville to 
 Memphis that influences and establishes the rate to this interior point. 
 
 As the number of competitive points is multiplied on any one road 
 the rates to a greater number of interior points are influenced, and 
 this to a greater extent. Thus the Memphis Line from Bowling 
 Green, where it diverges from the Main Stem to Memphis, 259 
 miles in length, is crossed by two navigable rivers and four other 
 railroads, establishing thus six competing points. The shippers over 
 this line can therefore always avail themselves of the competitive rates 
 to the nearest point. They can in no case be charged more from Louis- 
 ville direct to any station of the road than the competing rate and the 
 rate of the short rail haul added, no matter what may be the distance 
 from Louisville to the interior point. The consequence is that all the 
 interior points enjoy the benefit of whatever competition there is; but 
 it also follows that the tariff" upon such a line can not be constructed 
 upon a mileage basis, but must make more or less discrimination be- 
 tween the different localities according as they are affected by compe- 
 tition. It may necessarily require freight to be hauled over a longer 
 distance for much less than it is carried for a shorter distance. It is 
 either this or the abandonment of competitive business. 
 
 If railroad companies could agree among themselves to stop compe- 
 tition to junction points, one of the most fruitful causes of complaint 
 against discrimination in railroad tariffs would at once be remedied; 
 but it would be at the expense of the benefit of competition. 
 
 The same result must follow if the rates to competing points are 
 determined by the legislature of the state in which they are situated. 
 But in this case competitors by river and railroads in other states should 
 also be compelled to maintain these rates; otherwise the roads over 
 which the state has complete control could not do business at all at 
 competing points. Surely the people could not be benefited by such 
 a course; it would be much better to let the natural laws of compe- 
 tition have their full force. To interfere with them is certainly not 
 to regulate but to obstruct commerce, for which there is no authority 
 in the constitution of the United States. 
 
 The problem of establishing a railroad tariff that possesses all the 
 desirable requirements is one not of easy solution. It is an intricate
 
 RAILROAD TRANSPORTATION. 39 
 
 and difficult problem ; but the more complicated we find it to be, the 
 more reasonable it is to assume that it can better be solved by those 
 who are directly interested, who practically devote their whole time 
 and attention to it, than by members of a legislature, a majority of 
 whom may be presumed to be utterly ignorant of this special subject. 
 
 It is generally supposed that the right to establish their own tariffs 
 gives great power, liable to abuse, into the hands of railroad managers, 
 but upon closer investigation it will be found that the extent of this^ 
 power is generally much overrated. Enlightened self-interest dictates 
 its exercise reasonably, and in a spirit of liberality; competition, 
 especially with water transportation, circumscribes it into the narrowest 
 limits, if it does not nullify it altogether. 
 
 On the roads operated by the Louisville & Nashville Railroad 
 Company the maximum legal rates authorized by the charter vary 
 from 7 to 10.2 cents per ton per mile. The average actual charge 
 made is 2.172 cents. Why does not the company charge more, 
 having an undoubted right to do so? Other causes than the mere 
 will of the managers limit the charges. In one case it is competition, 
 in another the freight is of such a character that it can not bear higher 
 charges, or both of these causes are in operation at the same time. 
 
 I can assert from my personal experience that on 920 miles of 
 railroads, stretching in all directions over a large territory of country, 
 the managers have no more to do with the making of the tariffs than 
 to study the conditions and limitations to which I have referred, and 
 to conform to the same. The result is that the tariff charges on these 
 road= arc b^it from 20 to 30 per cent of the maximum authorized by 
 law. I can also affirm that a similar state of affairs exists in regard to 
 the large number of railroads with whose affairs I am acquainted. 
 
 If the mere will of the managers, w.ich'jckcu by other consid- 
 erations, had absolute control over railroad tariffs, would it be likely 
 that so many roads in the United States would be in the hands of 
 receivers; so many more unable to pay dividends to stockholders; 
 so comparatively few paying the usual interest on the cost of con- 
 struction; and so few paying a larger interest? 
 
 Any one who asserts that the railroads in this country as a whole 
 are guilty of extortion only shows his own ignorance of the facts, easily 
 accessible, and exhibited by the statistics in regard to the financial 
 result of railroad operation in the United States. The truth is that
 
 40 
 
 RAILROAD TRANSPORTATION. 
 
 the people of this country are furnished with transportation for less 
 than its cost, at the expense of the owners of railroad property. 
 
 The general practice of citing one or two cases of unreasonable 
 railroad charges, or a few cases where railroad companies pay divi- 
 dends upon watered stock, and basing upon this the charge that all or 
 the great majority of railroads in the country are doing this, is mani- 
 festly unjust. If the charge is made against the railroad system as 
 a whole, it stands refuted by the general result of its operations as a 
 * whole. 
 
 That errors are committed by railroad managers in arranging their 
 tariffs, especially in details, can not be denied (and this is equally true 
 in other important human avocations), nor can it be wondered at, if we 
 bear in mind the complications and difficulties of this work. But as 
 the interests which are intended to be served necessarily suffer from 
 these errors, it should be presumed that they are the result of ignorance 
 rather than evil intent, and the only correction in this matter is better 
 information, sounder judgment, and greater intelligence. If these 
 requirements could be supplied by legislation, the end would be 
 accomplished. Much might be done by instituting intelligent in- 
 quiry and investigation of the facts bearing upon the subject, and by 
 disseminating the result among the people. In this direction legis- 
 lative influence should first be exercised. 
 
 GOVERNMENTAL RAILROAD TARIFFS A FAILURE. 
 
 The foregoing consideration of the subject of legislative control 
 of railroad property leads to the following conclusion^. 
 
 First, that such control can not be exercised by general laws estab- 
 lishing fixed railroad tariffs without a violation of the rights of the 
 parties ownir.^ Cw.^ p.op'^'rty. 
 
 Seconi^,\^\'3X it is impossible under such fixed railroad tariffs to fully 
 develop the usefulness of railroads to their owners and the people. 
 
 The experience of the past regarding special railroad legislation 
 confirms the correctness of these conclusions. 
 
 Mr. Charles F. Adams sums up the result of his thorough investi- 
 gations of the subject of governmental interference with railroad 
 tariffs in the report of the railroad commissioners to the legislature 
 of the state of Massachusetts. Referring especially to Great Britain, 
 he says, "Nowhere has the system of special legislation been more
 
 RAILROAD TRANSPORTATION. 
 
 41 
 
 persistently followed, and nothing, it may be added, could have been 
 more complete than its failure." 
 
 And again: "The result of thirty years of successive and wholly 
 abortive efforts in this direction in England has been that Parliament 
 has at last settled down in the conviction that the developments and 
 necessities of trade in practice always have nullified, and inevitably 
 must nullify, the special acts, no matter how carefully and skillfully 
 they may be prepared." 
 
 PREVENTION OF EXTORTION AND UNJUST DISCRIMINATION. 
 
 It is only surprising that it should have required thirty years to 
 establish a fact that must appear evident at once if we thoroughly 
 analyze the nature of the object sought to be attained, and the 
 instruments and means available for its attainment, and still more 
 surprising when we consider that the object of all the efforts re- 
 ferred to could be simply reached by enforcing the commo?i law, 
 which prohibits common carriers from making unreasonable charges 
 for transportation. 
 
 Let the parties guilty of a violation of this law alone be held 
 responsible. This course has been deemed sufficient heretofore to 
 prevent wrong-doing, and if followed and adhered to, should also be 
 sufficient to prevent extortion on the part of railroad companies. 
 
 It has been urged against the efficiency of the law that the expense 
 of litigation deters individuals from seeking redress. To remove this 
 objection the state could provide an indictment against offending rail- 
 road companies, and throw the cost of litigation upon the common- 
 wealth. It has also been urged that it is difficult, if not impossible, to 
 make proof of the unreasonableness of railroad charges. Several plans 
 have been proposed to remove this objection. 
 
 The House of Representatives of the United States proposed a law 
 by which nine commissioners were to guess at the rates which should 
 be considered reasonable. I say guess, because it would be entirely 
 impossible for nine men to ascertain what are reasonable rates, upon 
 correct principles, for all roads in the United States. 
 
 The legislatures of some states have adopted arbitrary tariffs, which 
 are to be considered reasonable until proved otherwise. The object 
 of these measures is simply to throw the burden of proof as to the 
 reasonableness of transportation charges upon the railroad companies. 
 
 F
 
 42 RAILROAD TRANSPORTATION. 
 
 But in so doing it raises fictitious issues; it declares certain things 
 reasonable which are not so, and makes an untruth the basis upon 
 which a legal action is to be brought. 
 
 It is difficult to perceive why all this complicated machinery was 
 invented to reach an object that can be simply reached by enacting a 
 law which shall throw at once the burden of proof upon the railroad 
 companies. Such a law would be perfectly just and proper. It is the 
 business of the common carrier to know when he establishes a tariff 
 that it is in accordance with the requirements of law; and having all 
 the facts bearing upon the question in his possession, he should have 
 no difficulty in making the proof. 
 
 A rigid and frequent application of the law as above suggested to 
 railroad carriers would soon prove whether the many complaints made 
 are based upon facts or upon fiction. The judicial investigation in a 
 number of cases, aided by the testimony of experts in railroad manage- 
 ment, would soon bring to light and establish the proper principle 
 upon which questions as to extortionate rates and unjust discrimina- 
 tions should be decided ; and it would not be long before people would 
 learn to understand and look upon the subject in its proper light. 
 
 The present persecution of railroads, which in some parts of the 
 country has become a mania, is not unlike the persecution of witch- 
 craft in former years. It must cease as soon as intelligence has taken 
 the place of ignorance. When this point has been reached many of 
 the supposed difficulties of the railroad problem will be solved. 
 
 It has been with a view of contributing something toward this 
 desirable end that I have discussed the subject in this report at so 
 great length. 
 
 CONTENTS OF TABLES OF ANNUAL REPORT. 
 
 I propose now, after having referred to the subject of railroad 
 transportation in general, to complete the report of the operations 
 of the Louisville & Nashville Railroad during the past year. The 
 contents of tables I to XXV, relating to the expenditures, were 
 referred to on pages 8 to 17. I wish now to refer to the remaining 
 tables, from XXVI to XLV, containing information in regard to the 
 tonnage and number of passengers transported, and the revenue derived 
 therefrom, and showing also the sources from which the business is 
 derived, character of the freight, etc.
 
 Table XXVI shows the number of tons and ton-miles of local and 
 through freight transported ; the total revenue received from freight; 
 also the revenue and the operating expenses per ton-mile on each road. 
 
 Table XXVII shows the number of tons of freight transported to 
 and from each station, and the number of tons carried one mile. 
 
 Table XXVIII shows the quantity and kind of freight forwarded 
 from each station. 
 
 Table XXIX shows the total quantity of each kind of freight for- 
 warded from all stations of each road during the past and preceding 
 years. 
 
 Table XXX shows the quantity and kind of freight received at 
 each station. 
 
 Table XXXI shows the quantities and kind of freight received at 
 Louisville from each station on the various roads. 
 
 Table XXXII shows the total quantity of each kind of freight 
 received at Louisville during the past and preceding year. 
 
 Table XXXIII shows the quantity and kind of freight forwarded 
 to each station of the road from Louisville. 
 
 Table XXXIV shows the quantity of each kind of freight for- 
 warded from Louisville during the years 1872-3 and 1873-4. 
 
 Table XXXV shows the number of bales of cotton carried to and 
 from Memphis, and from stations on Memphis & Ohio Railroad. 
 
 Table XXXVI shows the revenue from freight and passengers at 
 each station of the road, and the tons of freight and number of pas- 
 sengers carried one mile from and to each station. 
 
 Table XXXVII shows the tonnage of and revenue from freight 
 carried between Louisville and Nashville, coming from or destined to 
 Louisville and all points North, or coming from or destined to Nash- 
 ville and all points South. 
 
 Table XXXVIII shows the tonnage of and revenue from freight 
 carried between Louisville, Memphis, and all junction points on the 
 Memphis Line, arriving from and destined to Louisville, Memphis, 
 and points beyond. 
 
 Table XXXIX shows the tonnage and revenue from freight com- 
 ing from and going to points between Louisville and Montgomery and 
 junction points. 
 
 Table XL shows the tonnage and revenue from freight between 
 Nashville and Montgomery.
 
 ' 
 
 44 RAILROAD TRANSPORTATION. 
 
 The preceding tables contain full information in regard to the 
 competitive freight business, the sources from which derived, and its 
 value to the company. The rates at which each separate class of busi- 
 ness is carried and the net profits derived from each can be ascer- 
 tained, and the question decided how profitable it is to the company 
 or when it ceases to be so. 
 
 Table XLII shows the number of miles traveled by local and 
 through passengers, and the average revenue per mile. 
 
 Table XLIII shows the number of local passengers on Main Stem 
 and branches, and revenue derived from same on each road. This 
 table shows the interchange of local passenger traffic between the 
 various roads. 
 
 Table XLIV gives the same information in regard to both local 
 and through passenger traffic. 
 
 Table XLV shows the proportion of revenue derived from freight 
 business upon each road originating upon the other roads. 
 
 ESTIMATES OF THE VALUE OF BRANCH ROADS TO MAIN LINE. 
 
 From tables XLIV and XLV we are enabled to make estimates 
 of the value of the branch roads and extensions of the main line 
 as feeders to it. One of the principal feeders is the Memphis Line. 
 Its business passes over ii8 miles of the Main Stem. 
 
 From Table XLIV it appears that the gross earnings of the 
 Main Stem from passenger business coming from or going to the 
 Memphis Line are $145,995.40. At 29.13 per cent the net earnings of 
 the Main Stem — its total net earnings on account of this business — 
 were 42,528 46 
 
 From Table XLV it appears that the gross freight 
 earnings on the Main Stem derived from that line were 
 $368,588.69, and net earnings, 39.20 per cent 144,486 76 
 
 Total net earnings derived on Main Stem from busi- 
 ness of the Memphis Line $187,015.12 
 
 The value of the Nashville & Decatur and South & North Alabama 
 Railroads to the Main Stem as feeders may be estimated as follows : 
 
 Table XLIV shows the gross passenger earnings on the Main Stem 
 derived from business on 
 
 Nashville & Decatur Railroad I9>537 36 
 
 South. & North Alabama Railroad 28,673 04 
 
 Total $48,210 40
 
 RAILROAD TRANSPORTATION. 45 
 
 As no extra trains are run on the Main Stem to accommodate 
 this passenger' business, the whole of this may be considered as net 
 earnings. 
 
 The gross earnings from freight business on the Main Stem 
 
 Coming from or going to the Nashville & Decatur Railroad are 52,763 73 
 
 From Soutli and North Alabama Railroad 223,691 28 
 
 ;55276,455 01 
 
 And the net earnings from this business (39.20 per ct.), ^108,370.36. 
 The total net earnings of Main Stem increased by these two roads 
 are $156,580.76. 
 
 The value of the Knoxville and Richmond Branches as feeders to 
 the Main Stem may be estimated as follows : 
 
 Proportion of gross passenger earnings on Main Stem from business 
 coming from or going to these two branches (Table XLIV) on 
 ^536,937.42 at 29.13 per cent net profit is iO)7S9 87 
 
 Proportion of gross freight earnings (Table XLV), $102,279.47, at 
 
 39.20 per cent 40,093 55 
 
 Total net earnings on Main Stem derived from business of these two 
 
 branch roads , 50,853 42 
 
 Add this to the net earnings of these two branches 86,563 14 
 
 The total net earnings of these two branches $137,416 56 
 
 The value of the Bardstown Branch as a feeder to the Main Stem 
 is as follows : 
 
 Main Stem proportion of passenger earnings (Table XLIV), $10,775.53, 
 
 at 29.13 per cent 3,138 91 
 
 Freight earnings (Table XLV), $16,915.65, at 39.20 per cent 6,630 93 
 
 9,776 84 
 Add to this the net earnings of the Bardstown Branch itself. S>338 06 
 
 Total net earnings $15,107 90 
 
 The value of the Glasgow Branch as a feeder to the Main Stem is 
 as follows : 
 
 Proportion of passenger earnings on the Main Stem from business from 
 
 the Glasgow Branch (Table XLIV) 12,181 08 
 
 No additional trains are run to accommodate this business, and the whole 
 amount may be considered as net earnings. 
 
 Proportion of freight earnings, as per Table XLV, $28,843.68; net 
 
 profit 39.20 per cent 11,306 72 
 
 Total $23,487 80
 
 46 RAILROAD TRANSPORTATION. 
 
 Recapitulating the results of the above estimates, we have the pro- 
 portion of the net earnings which the Main Stem has derived from 
 the business of the extension and branches as follows : 
 
 From Memphis Line 187,015 22 
 
 From Nashville & Decatur and South & North Alabama Raih-oads 156,580 76 
 
 From Knoxville and Richmond branches 5°'853 42 
 
 From Bardstown Branch 9.769 84 
 
 From Glasgow Branch ",306 72 
 
 Total 415.525 96 
 
 The total net earnings of the Main Stem were 896,244 64 
 
 Showing that without the branch roads and extensions the net revenue 
 
 of the Main Stem would have been only $480,718 68 
 
 But we must consider that in the above estiinate of the net earn- 
 ings we have only taken the average net earnings. The large amount 
 of business thrown on the Main Stem by these feeders has greatly 
 reduced the operating expenses. The reduction so made may be 
 estimated as follows: 
 
 The operating expenses on the Main Stem were 63.8 per cent 
 of the gross earnings. The operating expenses on account of the 
 $415,525.96 net earnings derived on the Main Stem from the busi- 
 ness of the branch roads can therefore be estimated at ||;| X 
 
 $4i5>525-96 = $732,335-8i- 
 
 Twenty per cent of these expenses belong to that class which are 
 
 fixed and independent of the amount of business (see Table A, p. 20, 
 interest excluded), so that without the business that was brought to the 
 Main Stem by its feeders the expenses of transacting the other business 
 
 would have been increased by $732,335.81 XyV^'o 146,467 16 
 
 Add to this the net earnings as above estimated 415,525 96 
 
 We have the total net earnings of the Main Stem on 
 
 account of the branch roads and extension $561,993 12 
 
 This estimate shows that branch roads and extensions, although 
 they may not be profitable in themselves, may become so by the influ- 
 ence they exercise upon the net revenue of the main line. It may 
 occur even that a whole system of roads — main line and branches — 
 is not remunerative, yet the final financial result that must be con- 
 sidered the test of the judiciousness of the investment in branch 
 roads — the proportion of the net revenue to the capital invested — may 
 be greater with than without the branches. It is therefore not 
 possible to judge correctly of the judiciousness of such investments 
 unless correct estimates can be made showing the net earnings directly 
 and indirectly obtained on account of branch roads and extensions.
 
 RAILROAD TRANSPORTATION. 47 
 
 HEADING OF ACCOUNTS. 
 
 FROM TABLES 
 
 1 AND in. 
 
 MAINTENANCE OF ROADWAY AND 
 
 
 « 
 
 GENERAL SUPERINTENDENCE. 
 
 
 
 Road Repairs per Mile of Road — 
 
 
 
 I Adjustment of track. 
 
 35 
 
 Total per train mile. 
 
 2 Ballast. 
 
 36 
 
 Stationery and printing. 
 Telegraph expenses. 
 
 3 Ditching. 
 
 37 
 
 4 Culverts and cattle-guards. 
 
 38 
 
 Depot repairs. 
 
 5 Extraordinary repairs — slides, etc. 
 
 39 
 
 Total per train mile. 
 
 6 Repairs of hand and dump-cars. 
 
 40 
 
 Total station expenses per train mile. 
 
 7 Repairs of road tools. 
 
 
 
 8 Road watchmen. 
 
 
 
 9 General expense of road department. 
 
 MOVEMENT EXPENSES PER TRAIN" | 
 
 10 Total. 
 
 
 MILE. 
 
 II Cross-ties replaced — value. 
 
 
 
 12 Cross-ties, labor replacing. 
 
 41 
 
 Adjustment of track. 
 
 13 Cross-ties, train expenses hauling. 
 
 42 
 
 Cost of renewal of rails — value. 
 
 14 Total cost of cross-ties per mile of road. 
 
 43 
 
 Labor replacing rails. 
 
 15 Bridge superstructure repairs. 
 
 44 
 
 Train expenses hauling rails. 
 
 16 Bridge watchmen. 
 
 45 
 
 Joint Fastenings. 
 
 17 Shop-building repairs. 
 
 46 
 
 Switches. 
 
 18 Water-station repairs. 
 
 47 
 
 Total cost of adjustment of track and re- 
 
 19 Section-house repairs. 
 
 
 placing rails per train mile. 
 
 20 Total cost of bridge and building repairs 
 
 48 
 
 Locomotive repairs. 
 
 per mile of road. 
 
 49 
 
 Oil and waste used on locomotives. 
 
 21 General superintendence and general ex- 
 
 50 
 
 Watching and cleaning. 
 
 pense of operating department. 
 
 51 
 
 Fuel used in engine-house. 
 
 22 Advertising and soliciting passengers and 
 
 52 
 
 Supervision and general expense in engine- 
 
 freight. 
 
 
 house. 
 
 23 Insurance and taxes. 
 
 53 
 
 Engineers and firemen's wages. 
 
 24 Rent account. 
 
 54 
 
 Total engine expenses per train mile. 
 
 25 Total per mile of road. 
 
 55 
 
 Conductors and brakcmen. 
 
 26 Salaries of general officers. 
 
 56 
 
 Passenger-car repairs. 
 
 27 Insurance and taxes and general expense. 
 
 57 
 
 Sleeping-car repairs. 
 
 28 Total per mile of road. 
 
 58 
 
 Freight-car repairs. 
 
 29 Total cost per mile of road for tiiainte- 
 
 59 
 
 Oil and waste used by cars. 
 
 natice of roadway and buildings. 
 
 60 
 
 Labor oiling and inspecting cars. 
 
 29^ Total cost per train mile for maintenance 
 
 61 
 
 Train expenses. 
 
 of roadway and buildings. 
 
 62 
 
 Total car expenses per train mile. 
 
 
 63 
 
 Fuel used by locomotives. 
 
 Water supply. 
 
 Total fuel and water expense per train mile. 
 
 STATION EXPENSES PER TRAIN MILE. 
 
 64 
 
 
 65 
 
 30 Labor loading and unloading freight. 
 
 66 
 
 Damage to freight, and lost baggage. 
 
 31 Agents and clerks. 
 
 67 
 
 Damage to stock. 
 
 32 Gen'l expense of stations — lights, fuel, etc. 
 
 68 
 
 Wrecking account. 
 
 33 Watchmen and switchmen. 
 
 69 
 
 Damage to persons. 
 
 
 Expense of S^uitc/tin^—Eng'mc repairs. 
 
 70 
 
 Gratuity to employees. 
 
 
 Engineers and firemen's wages. 
 
 71 
 
 Fencing burned. 
 
 
 Expense in engine-house. 
 
 72 
 
 Law expenses. 
 
 34- 
 
 Supervision and general expense. 
 
 73 
 
 Total per train mile. 
 
 
 Oil and waste. 
 
 74 
 
 Total movement expenses per train mile. 
 
 
 Water supply. 
 
 75 
 
 Grand Total for maintenance and move- 
 
 
 Fuel. 
 
 
 ment per train mile.
 
 48 
 
 RAILROAD TRANSPORTATION. 
 
 
 
 Co 
 
 I-. 
 Co 
 
 Co 
 
 K 
 H 
 
 O 
 H 
 
 a 
 g 
 
 z 
 
 2 
 
 s 
 
 13 
 
 D 
 O 
 
 S 
 < 
 
 
 SO e 
 
 < :_• 
 
 5 u 
 
 2 2 
 - < 
 
 z « 
 
 s 
 
 ^ 
 
 Or 
 
 o 
 
 Uj 
 
 r- 
 
 <;i 
 
 
 Co 
 
 U 
 
 '^ 
 
 z 
 
 
 U) 
 
 Qc 
 
 OS 
 
 c> 
 
 UJ 
 
 u. 
 
 11! 
 
 *=»: 
 
 Pi 
 
 -J 
 
 1 1 
 
 :::i 
 
 
 ^ 
 
 s- 
 
 Qc 
 
 
 5 
 
 o" 
 
 CO 
 
 
 hJ 
 
 
 <! 
 
 
 C5 
 
 
 2 
 
 
 l-H 
 
 
 & 
 
 
 O 
 
 
 S 
 
 
 yj 
 
 
 V 
 
 - "1° 
 
 2 ° 
 
 1) 
 
 <U 3 
 
 1) 
 ci 
 
 > 
 
 ■ 
 
 a 
 o 
 
 a, 
 
 B 
 
 a, 
 <u 
 
 a 
 «i 
 
 B 
 
 > 
 o 
 
 > 
 ■a 
 
 + 
 c 
 o 
 
 s 
 
 Q '-P. 
 
 be 
 
 c 
 
 rt 
 
 O 
 
 U 
 
 s 
 
 s 
 o 
 
 
 04 
 
 »< 
 V 
 
 c 
 
 •t-t 
 
 B 
 
 
 a 
 
 3 
 
 X 
 
 CI 
 
 1. I O 
 
 (U 
 
 c 
 o 
 
 > 
 
 o 
 
 <u 
 
 o 
 
 
 M 
 
 'll- 
 
 60 
 
 ir. 
 
 i 
 
 o 
 
 
 a* 
 
 >« 
 
 
 
 u 
 
 o 
 
 o 
 
 
 
 tr> 
 
 
 S 
 
 c 
 
 in 
 
 s 
 
 
 
 O 
 
 
 
 
 
 ' ' 
 
 
 rt 
 o 
 
 (U 
 
 O 1 3 
 
 o 
 
 s 
 
 c! 
 
 
 o 
 
 rt 
 
 > 
 
 CIS 
 
 o 
 
 rt 
 O 
 
 0) 
 
 u 
 
 c 
 
 c 
 
 V 
 
 rt 
 
 
 J 
 
 
 (« 
 
 
 « 
 
 
 >> 
 
 
 u 
 
 
 V 
 
 u 
 
 u. 
 
 rt 
 
 ., 
 
 V 
 
 Ul 
 
 >> 
 
 t/} 
 
 
 n 
 
 K 
 
 n, 
 
 
 
 
 & 
 
 T3 
 
 
 
 
 
 
 
 
 
 F 
 
 >., 
 
 
 
 c 
 
 «- 
 
 ri 
 
 4) 
 
 t. 
 
 
 j^ 
 
 g 
 
 ^ 
 
 
 bd 
 
 
 
 
 
 u 
 
 
 
 
 
 
 V 
 
 
 
 
 
 
 
 
 
 <y 
 
 0) 
 
 > 
 
 .0 
 
 
 
 F 
 
 u 
 
 
 u^ 
 
 c 
 
 
 
 
 Lr 
 
 
 u 
 
 
 Xi 
 
 
 B 
 
 
 
 
 
 
 c 
 
 > 
 
 s, 
 
 rt 
 <U 
 
 U 
 
 -a 
 
 rt 
 
 o 
 
 > 
 
 o 
 
 o 
 a, 
 tfi 
 
 c 
 
 rt 
 
 to 
 
 •S| 
 
 ^ i i= 
 
 rt 
 
 o 
 
 o 
 
 rt 
 
 > 
 cs 
 
 1 
 
 c 
 o 
 
 4> 
 
 <u 
 
 + 
 
 + 
 
 o — 
 
 o 
 o 
 
 o 
 
 
 4> O 
 
 tn 
 -~> "35 
 ■* rt 
 
 o o 
 
 •- 1) 
 ^ to 
 
 to OJ 
 
 to 
 
 rt 
 
 "* <u £ 
 
 w rt 
 in c 
 
 to 
 
 4> 
 
 C 
 
 o 
 
 o 
 
 c 
 o 
 
 '3 
 1) 
 
 c 
 
 o 
 
 rt 
 
 rt 
 
 u 
 
 
 
 u 
 rt 
 
 
 to 
 
 F 
 
 > 
 
 >% 
 
 (U 
 
 3 
 
 
 
 4) 
 
 rt 
 
 c 
 
 p 
 
 X 
 
 V 
 
 '"' 
 
 
 
 
 
 u^ 
 
 , 
 
 .C 
 
 
 
 
 
 ,0 
 
 -4-> 
 
 lA 
 
 IT. 
 
 
 ,, 
 
 91 
 
 a 
 
 
 
 c 
 
 a. 
 
 0) 
 
 
 
 
 
 
 
 
 
 CJ 
 
 <U 
 
 to 
 
 rt 
 
 fA 
 
 
 
 ^ 
 
 CJ 
 
 
 
 u 
 
 
 m 
 
 
 
 (U 
 
 u 
 
 
 
 s 
 
 > 
 
 .a 
 
 •^ 
 
 n 
 
 CJ 
 
 
 
 r/: 
 
 j^ 
 
 n 
 
 n 
 
 
 H 
 
 C 
 
 rt 
 
 O 
 
 to 
 
 .s «• 
 
 :-i TO 
 3 rt 
 T) O 
 
 <u rt 
 o o 
 
 to .2 
 
 C !" rt 
 
 c 
 
 in rt 
 § - 
 
 o 
 
 o 
 u 
 
 o 
 
 1) 
 
 .a 
 
 3 -fl 
 
 
 -i .^ " <^ 
 
 S — o 
 u rt 
 
 
 -a .5 
 
 ■^ -5 -; 2 c 'o 
 
 o m 
 to 
 
 ■= rt ■" 
 
 he ir " <" 
 
 .i <u 
 
 _ rt 2 c g „ S 
 
 ^ I/: .- •- O £> ." 
 
 3 _ :::: SP s 
 
 ^- ^j ^\ rt ■•-* 
 
 o 
 
 c 
 
 "3 
 
 rt 
 
 O 
 
 !_ 
 
 .^ 
 
 
 
 
 
 ^ 
 
 
 
 hft 
 
 R 
 
 
 ^2 
 
 rt 
 
 
 
 
 
 
 
 <u 
 
 > 
 
 
 rt 
 
 ^ 
 
 rt 
 
 ■*-> 
 
 
 
 
 c 
 
 CJ 
 
 ^ 
 
 <u 
 
 (U 
 
 t^ 
 
 ■C 
 
 0) 
 
 t/3 
 
 rt 
 
 ^ 
 
 
 
 
 
 
 "T! 
 
 l> 
 
 to 
 
 
 
 ^ 
 
 rt 
 
 rt 
 
 
 
 
 ■*-» 
 
 c 
 
 
 
 n 
 
 4) 
 
 
 
 
 
 ^ 
 
 
 1) 
 
 
 -*-* 
 
 a 
 
 > 
 
 c 
 
 Cm 
 
 n 
 
 c 
 
 ^ 
 
 
 
 
 0^ 
 
 
 ,£: 
 
 Q-i 
 
 
 -a 
 
 1/5 
 
 ■—. 
 
 d 
 
 c 
 
 
 4-^ 
 
 rt 
 
 rt 
 
 s 
 
 5J 
 
 s 
 
 
 
 
 3 
 
 
 ,^ 
 
 "^ 
 
 
 
 ^^ 
 
 r! 
 
 0> 
 
 ^ 
 
 rt 
 
 
 
 
 
 
 i«-i 
 
 
 a> 
 
 u 
 
 ^« 
 
 tn 
 
 j= 
 
 
 f) 
 
 0) 
 
 
 
 
 ,£ 
 
 T3 
 
 
 
 f'l 
 
 f-.D 
 
 OJ 
 
 <u 
 
 
 D 
 
 23 
 
 ;^ 
 
 — 
 
 s 
 
 
 fa 
 
 4> C 
 
 
 o 
 
 
 
 ?= o 
 
 rt ^. 
 
 
 
 ^- "^^ "^ '^ 
 M -r" •S; rt 
 
 rt a. 
 
 c -a 
 
 ■5 rt 
 
 2 P