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Local rates per ton per mile for the transportation of grain on seven trunk roads.
The foregoing table was prepared in the year 1875. The rates are all " local” or “non-competitive" rates. .
From the foregoing table it appears that the rate for 400 miles is 2.2 cents per ton per mile. The through rates for the transportation of grain from Chicago to the seaboard are, however, very much less than any of these rates. It is generally believed that 40 cents per hundred pounds for the transportation of grain from Chicago to New York, a distance of 837 miles, is a remunerative rate. This, however, is at the rate of only 82 mills per ton per mile, or less than half the local rate for 400 miles stated in the foregoing table.
The length of haul chiefly determines the difference between the cost of transporting through” and “local” traffic. It has been stated upon good authority that more money can be made at 2 cents per ton per mile on long hauls than can be made at 3 cents per ton on a local traffic, in which the expenses incurred by delay of cars at stations exceed the running expenses of cars while in motion.
(h) Alignment of road. A difference of opinion exists among rail. road managers as to the precise value of this element of cost, but the general fact is well established that locomotives can haul a greater number of cars on a straight road or on a road having easy curves than on a very crooked road, especially a road which has heavy grades.
(i) The cost of transporting commodities in bulk is less than the cost of transporting them in separate packages.—The terminal expenses incurred in the transportation of coal, grain, lumber, and cattle are very much less than the expenses of handling and warehousing miscellaneous mer. chandise. Grain is transferred from railroad-cars and vessels into ware. houses, and again from warehouses into railroad-cars and vessels at a cost not exceeding one-fourth to one-half a cent per bushel. Coal is simply dropped from pockets into vessels or is emptied into vessels or cars by chutes. Cattle are loaded and unloaded with very little expense. Valuable merchandise, on the other hand, involves expensive handling, care in transportation, and risks of various kinds. Besides, it must be carried in expensive cars and be carefully protected in warehouses.
( ) Cost of transportation is less for a regular than for an irregular traffic.—This is an economic principle recognized in all branches of busiDess. Every railroad company must, under its obligation as a common carrier, provide cars and other facilities for the traffic which may be thrown upon it at the periods when the demand for transportation is greatest. During certain seasons of the year the equipment required to transport the traffic on many roads is three or four times as great as at other seasons. But a road engaged in such an irregular business must keep on hand many cars, and have in its employ a large number of men not required during the months when business is lightest. · All these cars, and nearly all the employés whose efficiency depends upon their general knowledge of the particular workings of the road, cannot be dispensed with every time the business falls off. This feature of transportation greatly affects the east and west trunk roads, especially in regard to their through traffic. The varying movement of the crops and the fluctuations of commercial operations cause great irregularity in the movements of traffic.
(k) The cost of transportation is greatly affected by the nature and ralue of freights. It is mainly upon consideratious of this character that the classification of freights and the different rates for transporting goods of the various classes are based. These classifications are but expressions in practice of the fact that the actual cost of transporting do two different commodities, including the cost of handling, warehousing, &c., is precisely equal.
The cost of transporting goods which are of a perishable or fragile nature, and require great care in handling and moving, is greater than that of transporting goods which are not liable to decay or leakage. The common carrier is required to transport goods of a perishable Dature with dispatch, and to provide suitable facilities for handling and transporting commodities liable to be injured.
(1) The cost of transporting traffic at high rates of speed is very much greater than the cost at low rates of speed.—In the opinion of well-informed railroad managers the rate of speed for freight-trains yielding the maximum profit is about ten miles an hour. When freight-trains are run at the rate of 20 or 30 miles an hour, the increase in the cost of transportation is about in proportion to the increase of speed.
(m) The cost of transportation is less for commodities mored in large quantities than in small quantities.-A railroad having a traffic of a million tons of a single commodity would, as a matter of economy, be provided with cars and terminal facilities especially adapted to the par. ticular traffic. Full trains could thus be run regularly, insuring the greatest economy of car-service, motive power, and wages of employés. This is an economic condition very clearly recognized by every railroad manager. The transportation of fresh meats by rail from the West to the seaboard did not become a profitable traffic until it had assumed a magnitude warranting the construction of refrigerator-cars especially adapted to the purpose. Conditions of this nature affect the passenger traffic of railroads, commutation and excursion rates being based upon the number of passengers which can thereby be secured for single trains.
(n) The cost of transportation is largely affected by the amount of dead weight carried.—The economy of car-service depends largely upon the exigencies of the traffic of a road and the skill exercised in the management of its equipment under the complicated arrangements and combinations which have sprung up between railroads in order to meet the requirements of commerce.
The ordinary freigbt-cars of the standard gauge of 4 feet 8 inches are capable of carrying a load about equal to their own weight, (i. e., 10 tons,) but, owing to the irregularity of traffic and the fact that the tonnage of freights in one direction usually exceeds the tonnage in the opposite direction, the amount of dead weight carried on almost all roads is much greater than the weight of commodities transported.
It is evident that if a given number of loaded cars are hauled over a road, the cost of motive-power, train-hands, and other expenses directly connected with the movement of the train is much less per ton of freight than if the same number of cars are hauled when only half loaded. It is, however, very seldom practicable to load cars engaged in local traffic to their full capacity.
The report of the railroad commissioners of Massachusetts for the year 1875 shows that for every ton of freight carried on the roads of that State there were transported 3.292 tons of dead weight; or, in other words, that the average load was less than one-third of the capacity of the cars.
On the Pennsylvania Railroad, during the year 1875, only 58 per cent. of the space occupied by freight bound eastward, was occupied in the westward movement.
On the main line of the Louisville and Naslıville, Railroad during the year 1874, the south-bound tonnage was but 68 per cent.of the north-bound tonnage. But this great loss of effort is not peculiar to railway transportation. It is observable in every branch of human activities. A striking illustration of the loss sustained in consequence of hauling dead weight or unprofitable car-service is presented in a report by the presidents of the Chicago and Northwestern and tbe Milwaukee and Saint Paul Railways to the Wisconsin legislature. Referring to the Chicago and Northwestern Railway, those gentlemen say:
The actual freight-mileage capacity of the cars on that road, allowing ample time for loading and unloading and for the disability of a liberal number of cars, is about
144,000,000 car-mileages, or 1,440,000,000 ton-mileages, while the actual ton-mileage performed was 212,275,311, wbich shows that the actual car-mileage was only 15 per cent. of the car-mileage which the equipment required by the fluctuating business is capable of doing, and this percentage is further reduced by the fact that of the actual ar-mileage made about 75 per cent. only was paying ton-mileage, showing that the total tonnage of the Chicago and Northwestern system is but 11 per cent. of the capacity of the rolling-stock the company is obliged to keep; or, in other words, were the freight-traffic constant, regular, and in car-loads, 739 cars would do the same business which now requires 6,628 cars.
The theoretical limit of the economy of car-service can, of course, never be obtained in practice. The proportion of dead-weight carried differs widely on different roads.
(0) The cost of transportation differs greatly on roads on account of the maintenance of the road itself. The ratio which the cost of maintenance of roadway bears to the total operating expenses on several important roads is shown in the following table:
cost of mainten-
25 12 14. 453 24. 500 14. 500 25, 500
The cost of the maintenance of a road having few bridges and located in a comparatively level country having a sandy or gravelly soil is very much less than of a road built upon a yielding soil and baving heavy excavations and embankments and many bridges. This source of expenditure is of course affected very much by the character of the con. struction of the road-bed and superstructures.
(p) Perhaps the most important of all the considerations affecting the cost of transportation on a railroad is the skill with which it is managed, embracing both the direction of matters of detail and general administration.
In the management of the great trunk lines connecting the interior with the seaboard this is the consideration of especial importance. In the course of the contests between the trunk lines when competition runs wild, the general administration of the affairs of a road embraces questions of very great magnitude and of national interest. The proper management of these great trunk lines requires executive ability of a high order and an extensive knowledge of the details of transportation and of commercial affairs.
The circumstances and conditions governing the cost of transportation on railroads which have thus far been mentioned may be summarily stated as follows: First, gradients; second, cost of roads; third, the wages of labor and cost of material; fourth, cost of fuel ; fifth, effects of frost and snow; sixth, volume of traffic ; seventh, distance; eighth, alignment of road; ninth, the distinction as to bulk or package traffic; tenth, regularity of movement; eleventh, nature of commodities, as to their being perishable or fragile; twelfth, speed; thirteenth, quantity transported of one kind; fourteenth, dead weight; fifteenth, maintenance of road; sixteenth, skill in management. There are other conditions affecting the cost of transportation, of comparatively trifling importance on certain roads, but of very great importance on other roads.
The facts presented clearly indicate the absurdity of tables parporting to give the cost of transportation by rail based upon the single con. dition of gradients. Mr. Albert Fink, in a report on the cost of transportation, has named fifty-eight different elements of cost applying to the management of a railroad, a list of which may be found on page 256 of the Appendix. He has also prepared a formula for ascertaining the cost of transportation per ton per mile, which may be found on page 257 of the Appendix.
Attention is called to an explanatory note appended to this formula, and especially to the remark that “ It is necessary to know the fifty. eight items of expense enumerated in order to arrive at a correct estimate of the cost of transportation on railroads."
QUESTIONS OF POLICY IN RAILROAD MANAGEMENT WHICH AFFECT
Besides the circumstances which have just been mentioned as affecting the cost of transportation, there are certain questions of policy based upon conditions, beyond the control of the managers of railroads, which have great weight in the establishment of freight-tariffs. A few of the more important questions of this character may be mentioned.
First. Questions as to the establishment of freight-tariffs arising from the relative amount of freight in each direction and from considerations as to the advisability of carrying freights, which cannot be made to yield the aver. age cost of transportation.
There is no railroad in the country upon which the freight-traffic in both directions is equal. Generally, the tonnage of freight in one direction largely exceeds the tonnage in the opposite direction. This is es. pecially the case upon all the trunk railroads connecting the West with the Atlantic seaboard, as indicated by the following facts :
Pennsylvania Railroad, 1875. Through freight eastward
1,002, 072 tons. Through freight westward..
352,131 tons. The east-bound tonnage on this road appears to be nearly three times as great as the west-bound tonnage.