Page:EB1922 - Volume 32.djvu/254

Rh no way in which its recommendations might be enforced when objections were raised against its terms, there seemed likely to be long-drawn-out controversy and additional legislation before an ideal scheme of consolidation into a small number of systems of fairly equal financial strength would be made effective. The new Act enlarges the powers of the Commission over financial management and requires it to exercise a general supervision over all new issues of securities. The Railway Labour Board (consisting of nine members divided equally among representatives of management, labour and the public) is empowered to fix wages and working rules.

The foregoing outline mentions most of the important new features in the 1926 legislation amending the original Act to Regulate Commerce and the amendments up to 1920. The fundamental provisions of the original Act remained in force in 1921 and had been extended or otherwise strengthened. Briefly, the Commission is required to see that rates and charges are just and reasonable; to prescribe the rules under which rates may become effective; to prevent unfair discriminations between shippers, carriers or localities; to prevent, except when specifically authorized, the charging of a higher rate for a short haul than for a longer haul over the same route in the same direction; to prevent the pooling of freight or earnings; to require complete reports from carriers in prescribed form; and to prescribe and enforce uniform rules for accounting and for compilation of statistics of operation.

In addition to the Federal legislation just described, each state exercises its powers of regulating intrastate traffic and of exercising what may be termed “police powers” over railway management and service within its own borders. The line between Federal and State regulation is not clearly drawn, and controversies between the two authorities have been frequent. On the whole, the tendency of court decisions during the decade 1910-20 was toward according greater powers to the Federal commission and less power to the State commissions, as it has been shown that the states, when exercising control over intrastate rates and service, may indirectly discriminate against interstate traffic and service.

In addition to the changes in the Act to regulate commerce, new legislation was enacted during the decade which strengthened and extended the laws pertaining to safety appliances and accident prevention. These laws govern certain features of design and maintenance of locomotives and cars and of operating methods in train service. For example, the use of high-power headlights has been made compulsory, and the requirements as to boiler inspection and the general condition of locomotives have been made more rigid. The scope of the laws governing maximum hours of service was enlarged. The eight-hour basic day, prescribed for train service employees by the Adamson Act, passed by Congress in 1916, was extended during the period of Federal control to apply to practically all classes of railroad employees.

Statistics.—The salient features of mileage, investment, income and transportation production in ton-miles and passenger-miles, are shown in Table I. compiled by the Bureau of Railway Economics, Washington, D.C., under date of March 21 1921. The figures apply only to Class I. railways, i.e. those which have operating revenues in excess of $1,000,000 per year. These railways comprise about 92% of the total main-track m., about 95% of the total capitalization, and they earn about 97% of the total operating revenues.

In interpreting the figures in Table I. it is necessary to bear in mind that the results of 1917-20 were very much affected by war conditions and by Federal operation of railways from Jan. 1 1918 until March 1 1920. The period was one of abnormally high operating expenses and of greatly diminished net income, notwithstanding the large operating revenues. Obviously a continuation of the low income of 1919 and 1920 would cause universal railway bankruptcy. The aim of the Transportation Act of 1920 was to restore the pre-war earning power, to enable the railways to give better service, and to provide revenues which with reestablished credit would permit expansion and improvements in facilities and equipment.

Details for 1917.—Instead of figures for a later year, those of 1917 are selected to give an indication of the normal characteristics—financial, operating and public service of American railways.

On Dec. 31 1917 the total route mileage of railways of all classes was 253,626 miles. This was equivalent to 8.53 m. of railway for each 100 sq. m. of territory, or 24.39 m. for each 10,000 inhabitants. The relation of route mileage to track mileage (for Class I. roads only) is shown in Table II.:—

The total route m. for railways of all classes in 1917 was owned by 1,874 separate companies. Of these, 186 were railways of Class I.

with route mileage as shown in Table II., made up of 178,707 m. owned and 53,990 route m. operated under lease or similar arrangement. The average route mileage operated per Class I. road was 1,251 miles. For railways of Classes II. (those with operating revenue $100,000 to $1,000,000 per year) and III. (those with operating revenues below $100,000 per year, including switching and terminal railways) the average was 44 miles. The greater part of the mileage owned by the large number of small companies is leased to and operated by Class I. roads.

Finances.—The total railway capital outstanding Dec. 31 1917 was $21,249,357,241. This, however, included certain duplications in securities of one company held by another company and used by the second company as the basis for additional securities. Eliminating the intercorporate holdings and other duplications, the net capitalization on that date was $16,401,786,017, or $66,699 per route mile. Of this net capitalization, $39,930 per route m., or 59.9% of the total, was in capital stock, and $26,769, or 40.1% of the total, was in bonds or other forms of funded debt. In that year the average dividend paid on all stock was 4.24%, but no dividends whatever were paid on 36.7% of the stock. The average dividend rate on the dividend paying stock alone was 6.81 per cent. The average rate of interest paid upon funded debt may be estimated as about 4 per cent. The number of stockholders was approximately 670,000 and the number of bondholders about 300,000.

Table III. gives the income account of all railways considered as one system, including switching and terminal companies, for the year ended Dec. 31 1917:—

Of the total operating revenues about 70% came from the transportation of freight and about 25% from passenger-train service including mail and express. The remaining 5% was miscellaneous operating revenue. The operating expenses were divided as follows: maintenance of way and structures, 15.6%; maintenance of equipment, 24.2%; traffic (solicitation, advertising, etc.), 2.3%; transportation (operation of stations, yards, terminals and trains), 53.6%; general expenses, 3.4%; and miscellaneous, 0.9%.

On Dec. 31 1917 the equipment owned by railways of all classes was as follows:—

The item “other locomotives” is made up almost entirely of electric locomotives. “Freight train cars” do not include private freight cars (numbering about 80,000) owned by meat-packers, oil companies and similar industrial concerns. “Passenger train cars” do not include parlour and sleeping cars owned by the Pullman Co., of which there were 7,706. “Company service cars” include ballast cars, construction cars, wrecking cranes, etc.

The average number of employees during the year 1917 for all railways was 1,833,732. For Class I. railways only, the number was 1,732,876, divided as follows:—