profit and loss credit balance of $16,662,887. But this does not
alter the fact that what becomes of rent paid for lease of road
is no more a concern of interstate commerce than what becomes of
the rent paid for warehouses or office space in any terminal. The
operating roads pay all the cost of maintenance of way and equipment.
The leased roads are not common carriers in any sense. They are
simply distributing mediums of the rents paid them--this rent being
the equivalent of interest on so much capital. As appears from the
foregoing table, the expense of maintaining the organization of these
leased properties amounted in 1908 to 35/100ths of 1 per cent.
DISTRIBUTION OF GROSS EARNINGS.
How the gross earnings of the railways reporting to this Bureau in
1909 ($2,375,141,766) were distributed is shown in the next statement
in comparison with a similar division of earnings in 1908 and 1907.
STATEMENT OF DISTRIBUTION OF GROSS EARNINGS OF 221,132 MILES OF LINE
IN 1909 COMPARED WITH THE PERCENTAGES FOR 1908 AND 1907.
(GROSS EARNINGS 1909, $2,375,141,766.)
=======================================================================
Item | Amount |Per Cent|Per Cent|Per Cent
| 1909 | 1909 | 1908 | 1907
-----------------------------+--------------+--------+--------+--------
Operating expenses: | | | |
Maintenance of way and | | | |
structures | $ 299,757,077| 12.62 | 13.41 | 13.27
Maintenance of equipment | 358,747,371| 15.10 | 15.42 | 14.22
Traffic expenses | 48,453,707| 2.08 | 2.00 |
Transportation expenses | 799,690,194| 33.67 | 36.24 | 37.50
General expenses | 61,462,923| 2.58 | 2.58 | 2.54
+--------------+--------+--------+--------
Total |$1,568,111,272| 66.03 | 69.67 | 67.53
| | | |
Disposition of same: | | | |
Pay of employes | $ 973,174,419| 41.00 | 43.43 | 41.42
Fuel for locomotives | 184,359,112| 7.76 | | 7.74
Oil and water for | | | |
locomotives | 19,951,184| .84 | | .88
Material and supplies | 219,463,028| 9.24 | | 11.81
Hire and rent of equipment | | | |
and facilities | 54,638,243| 2.30 | | 2.46
Loss and damage | 56,379,042| 2.37 | | 1.83
Miscellaneous(a) | 60,146,242| 2.52 | | 1.39
+--------------+--------+--------+--------
Total expenses |$1,568,111,272| 66.03 | 69.67 | 67.53
Taxes(b) | 88,531,566| 3.72 | 3.53 | 3.10
Rentals of leased roads | 114,903,630| 4.84 | 4.64 | 4.69
Interest on funded debt and | | | |
current liabilities | 315,884,884| 13.30 | 13.34 | 13.14
Dividends | 171,607,550| 7.23 | 4.42 | 8.78
Deficits of weak companies | 20,223,246| .85 | 1.24 | .19
Betterments, reserves and | | | |
sundries | 47,494,754| 2.00 | 2.07 | 1.50
Surplus | 48,384,864| 2.03 | 1.09 | 1.07
+--------------+--------+--------+--------
Total (gross earnings) |$2,375,141,766| 100.00 | 100.00 | 100.00
Gross earnings 1908 | 2,393,805,989| | |
Gross earnings 1907 | 2,589,105,578| | |
-----------------------------+--------------+--------+--------+--------
(a) Legal expenses, advertising and insurance are included under
"Miscellaneous"; stationery and printing under "Material and
Supplies."
(b) Includes taxes paid by leased lines and deducted from rent.
Owing to the fact that interest on funded debt and dividends are paid
out of the common fund derived from operation and investments, the
amounts devoted to these items in the above statement are necessarily
computations. That they are not underestimates is proved by the fact
that the surplus would not permit of larger charges for interest
and dividends paid out of net earnings. Any interest or dividends
materially greater than the amounts stated above, not paid out of the
rents accruing to leased roads as given, must necessarily be derived
from other sources than transportation revenues, and has no place in
railway accounts coming under the provisions of the Act to Regulate
Commerce among the several states.
IX
TAXES
So far as taxes are concerned, seasons of prosperity, depression and
marking time are alike to American railways. The burden of their
taxation knows no recession but mounts steadily, absolutely, per mile
and in proportion to gross earnings.
The 368 roads reporting to this Bureau owning 182,046 miles of line
and operating 221,132 miles, of which 39,086 miles were leased, paid
$82,650,214 taxes in 1909. The Commission's report for 1908 shows
that the leased roads paid $5,881,352 taxes out of their rents.
Putting a conservative estimate of $200 a mile on the 11,870 miles of
line not represented in this report would add $2,374,000 to the above
figures and bring the aggregate taxes paid by the railways of the
United States in 1909 up to the striking total of $90,905,566.
How railway taxation has increased absolutely and relatively to
earnings and mileage during the past twenty-one years is shown in the
following statement:
TAXES ANNUALLY AND RELATIVELY, 1889 TO 1909.
============================+=============+==========+===========
| | | Percentage
Year | Taxes Paid | Per Mile | of
| | | Earnings
----------------------------+-------------+----------+-----------
1909 (Official figures) | $89,026,226 | $382 | 3.73
1908 | 84,555,146 | 367 | 3.53
1907 | 80,312,375 | 353 | 3.10
1906 | 74,785,615 | 336 | 3.21
1905 | 63,474,679 | 292 | 3.04
1904 | 61,696,354 | 290 | 3.12
1903 | 57,849,569 | 281 | 3.04
1902 | 54,465,437 | 272 | 3.15
1901 | 50,944,372 | 260 | 3.20
1900 | 48,332,273 | 250 | 3.24
1899 | 46,337,632 | 247 | 3.53
1898 | 43,828,224 | 237 | 3.51
1897 | 43,137,844 | 235 | 3.84
1896 | 39,970,791 | 219 | 3.48
1895 | 39,832,433 | 224 | 3.70
1894 | 38,125,274 | 216 | 3.56
1893 | 36,514,689 | 215 | 2.99
1892 | 34,053,495 | 209 | 2.90
1891 | 33,280,095 | 206 | 3.04
1890 | 31,207,469 | 199 | 2.96
1889 | 27,590,394 | 179 | 2.86
----------------------------+-------------+----------+-----------
In this table the figures for 1909 are based on the monthly reports
to the Commission and are subject to revision, but they are in
substantial agreement with the estimate on the returns to the Bureau.
Observe that the highest ratio of taxes to gross earnings shown
in this table was 3.84 per cent in 1897, when everything relating
to railways, except taxes, was prostrated under the reign of
receiverships that followed the panic of 1893. It was of 1897 that
the Official Statistician recorded the fact that "70.10 per cent
of outstanding stock paid no dividends, and 16.59 per cent of
outstanding bonds, exclusive of equipment trust obligations, paid no
interest."
There is instruction and warning behind the remarkable increase in
the ratio of taxation shown in the figures for 1894 to 1897. There is
the reflection of similar conditions in the rising ratios of 1908 and
1909.
X
DAMAGES AND INJURIES TO PERSONS
There are two items in railway accounts connected with the expense of
operation that give the management most serious concern, because no
means has been devised to limit or control them. In a leaflet issued
by this Bureau in September last, it was estimated that the payments
of American railways on account of "Injuries to Persons" and "Loss
and Damage" for the year 1908 would approximate $56,700,000, or more
than 2.3 per cent of their gross earnings. The Commission has not
yet made public the final figures for 1908, but the returns on these
accounts of the 368 roads reporting to this Bureau for the year 1909,
aggregate $56,379,024, or 2.37 per cent of their gross earnings.
Divided according to the new system of accounting adopted by the
Commission, these returns show the following figures:
SUMMARY OF PAYMENTS ON ACCOUNT OF INJURIES TO PERSONS AND LOSS AND
DAMAGE DURING THE YEAR 1909.
===========================================+=============+=========
| | Per Cent
Account | Amount | of
| | Earnings
-------------------------------------------+-------------+---------
Injuries to persons | $23,456,038 | .99
Maintenance of way $ 2,702,066 | |
Maintenance of equipment 2,315,119 | |
Transportation 18,438,853 | |
| |
Loss and damage | 32,922,986 | 1.38
To freight $24,768,453 | |
To baggage 300,869 | |
To property 4,469,496 | |
To live stock, etc. 3,384,168 | |
+-------------+---------
Total | $56,379,024 | 2.37
-------------------------------------------+-------------+---------
Unlike many of the other expenses of American railways, the burden of
this "cost of operation" does not fall heaviest on the large systems.
In the case of one road of moderate importance payments on these two
accounts amounting to 4.8 per cent of gross earnings were enough to
tip the balance into a deficit after paying interest on funded debt;
one minor but prosperous road, after paying 14 per cent of gross
receipts to meet these two accounts, had nothing left for dividends
after paying interest, which amounted to less than 10 per cent of its
earnings; and a small third road after being called on to pay 21.5
per cent of its earnings for injuries and damages had only 6 per cent
of its operating revenue left to pay interest on funded debt, which
called for 20 per cent of the earnings, and taxes reduced the net
operating revenue to less than 4 per cent.
These are extreme cases but they illustrate how the "Injury and
Damage" claims strike roads that can ill afford to pay them as well
as the great systems which are the common prey of every claimant with
enough of a grievance to interest an attorney who scents a contingent
fee.
That the claims behind these expenses are largely meretricious is
indicated, if not proved, by their disproportionate increase in the
past ten years, during which the railways have expended millions in
providing safeguards for their trains and employes. This increase
absolutely and relatively to gross earnings is shown in the following
statement:
PAYMENTS ON ACCOUNT OR "LOSS AND DAMAGE" AND "INJURIES TO PERSONS"
DURING THE DECADE 1899 TO 1909 AND PROPORTION TO GROSS EARNINGS.
======================+=======================+======================
| Loss and Damage | Injuries to Persons
+------------+----------+------------+---------
Year | | Per Cent | | Per Cent
| Amount | of | Amount | of
| | Earnings | | Earnings
----------------------+------------+----------+------------+---------
1899 |$ 5,976,082 | .455 |$ 7,116,212 | .541
1900 | 7,055,622 | .474 | 8,405,980 | .565
1901 | 8,109,637 | .510 | 9,014,144 | .567
1902 | 11,034,686 | .639 | 11,682,756 | .676
1903 | 13,726,508 | .722 | 14,052,123 | .739
1904 | 17,002,602 | .861 | 15,838,179 | .802
1905 | 19,782,692 | .946 | 16,034,727 | .770
1906 | 21,086,219 | .907 | 17,466,864 | .751
1907 | 25,796,083 | .996 | 21,462,504 | .829
1908 | -- | -- | -- | --
1909 | 32,922,986 | 1.386 | 23,456,038 | .988
| | | |
Increase in 10 years, | | | |
per cent | 450.5 | 204.6 | 229.6 | 82.6
----------------------+------------+----------+------------+---------
Startling as are these increases absolutely, those relatively to
earnings present a condition truly alarming, for which there is no
apparent relief except through a revulsion in the popular tolerance
of blackmail at the expense of the railways.
In no other country in the world are the railways held up on bogus
claims for damages to the extent they are in the United States. Under
the strict laws of the United Kingdom, as to compensation for damages
and injuries, the British railways paid less than 7/10ths of 1 per
cent of their earnings for all damages, losses and injuries, or less
than one-third the proportion paid by American railways on the same
account.
XI
LOCOMOTIVE FUEL
Despite the continuous improvements in the steam-producing capacity
of railway locomotives per ton of coal, the steady advance in the
cost of coal during the past ten years has more than offset the
economies of locomotive construction. This is shown in the next
statement, which gives the cost of locomotive fuel and its relative
proportion to gross earnings and operating expenses, and also the
average price per short ton of coal in the United States since 1899:
SUMMARY OF COST OF LOCOMOTIVE FUEL AND PROPORTION TO EARNINGS AND
EXPENSES OF AMERICAN RAILWAYS, 1909 TO 1899, WITH PRICE OF BITUMINOUS
COAL PER TON DURING THE SAME PERIOD.
======+=========+==============+==========+==========+==========
| | |Proportion|Proportion|Price of
|Miles of | Cost of | to | to | Coal at
Year | Line | Locomotive | Operating| Gross | Mines
| | Fuel | Expenses | Earnings |per Ton(a)
------+---------+--------------+----------+----------+----------
1909 | 221,132 | $184,359,112 | 11.757 | 7.77 | --
1908 | 230,494 | 197,385,513 | 12.098 | 8.25 | 1.12
1907 | 227,454 | 200,261,975 | 11.471 | 7.74 | 1.14
1906 | 222,340 | 170,499,133 | 11.119 | 7.34 | 1.11
1905 | 216,973 | 156,429,245 | 11.278 | 7.51 | 1.06
1904 | 212,243 | 158,948,886 | 11.893 | 8.05 | 1.10
1903 | 205,313 | 116,509,031 | 11.675 | 7.70 | 1.24
1902 | 200,154 | 120,074,192 | 10.776 | 6.96 | 1.12
1901 | 195,561 | 104,926,568 | 10.602 | 6.61 | 1.05
1900 | 192,556 | 90,593,965 | 9.809 | 6.09 | 1.04
1899 | 187,534 | 77,187,344 | 9.478 | 5.88 | .87
------+---------+--------------+----------+----------+----------
(a) These figures are from the latest report of the United States
Geological Survey.
The significance of this table is that it cost the railways almost
one-third more for fuel per dollar earned in 1909 than it did in
1899, the increase in the proportion of fuel cost to gross earnings
having been 32%, due to the advance of 31% in the price of coal at
the mines during that period.
The effect of the anthracite coal strike and the Commission's award
of date March 18, 1903, upon the cost of bituminous coal is seen in
the sharp advances in 1902 and 1903.
The railways have not escaped the advance in their cost of living due
to the increased price of fuel any more than the public at large, and
so far they have not been able to shift any portion of that cost, as
manufacturers and shippers have done.
XII
THE SAFETY OF AMERICAN RAILWAYS
Never before in the history of railways has such a record for
comparative safety been made as that recorded of American railways
during the year ending June 30, 1909. Following its custom the
Interstate Commerce Commission has published the report of accidents.
It remains to set forth here the more remarkable record of safety.
OF THE 368 COMPANIES REPORTING TO THIS BUREAU, NO LESS THAN 347,
OPERATING 159,657 MILES OF LINE AND CARRYING 570,617,563 PASSENGERS,
WENT THROUGH THE YEAR WITHOUT A SINGLE FATALITY TO A PASSENGER IN A
TRAIN ACCIDENT.
Of the remaining 21 companies, no less than 10, operating 27,681
miles and carrying 185,447,507 passengers, only missed such perfect
immunity by a single fatality each in accidents to trains. This
leaves 11 roads whose misfortune it was to bear the burden of train
accident fatalities to passengers during the year.
The invariable rule of the Bureau precludes the publication of
the honor roll of safety. And it is well so, for it would lead to
invidious comparisons, where, in such matters as accidents, all
comparisons are as irrelevant as they are invidious.
But it may be stated that the roll of immunity includes roads in
every section of the union, from Maine to California, several great
systems operating over 7,000 miles of line each, as well as little
branch lines of below ten miles of single track; lines operated with
all the safety appliances known to twentieth century progress and
lines operated under as primitive conditions as prevailed on this
continent more than half a century ago.
THIS RECORD OF COMPLETE IMMUNITY, STRETCHING OVER 159,657 MILES OF
OPERATED LINE, REPRESENTS A MILEAGE NEARLY SEVEN TIMES THAT OF ALL
BRITISH ROADS, AND EQUALS THE AGGREGATE OF ALL EUROPE, EXCLUDING
RUSSIA BUT INCLUDING THE BRITISH ISLES.
What immunity to fatalities to passengers over such a vast mileage
means may be partly realized from the fact that only twice in half a
century has it occurred on the 23,000 miles of British railways, and
never, to the writer's knowledge, so far as statistics reveal, on the
railways of any of the great divisions of Europe. Certainly it has
never occurred on the aggregate railways of Europe.
It would take seven consecutive years of immunity from fatalities
to passengers in train accidents on British railways to equal this
phenomenal record of American roads.
In presenting similar returns for 1908, it was said that "considering
the myriad units of risk involved, the record for immunity from fatal
accidents to passengers is without parallel in the history of railway
operation." How that record has been not only equalled but surpassed
is shown in the following statement for the last two years:
SUMMARY OF MILEAGE AND TRAFFIC OF ROADS ON WHICH NO PASSENGER WAS
KILLED IN A TRAIN ACCIDENT DURING THE YEARS 1908 AND 1909.
=====================================+=================+================
| 1909 | 1908
-------------------------------------+-----------------+----------------
Number of operating companies | 347 | 316
Mileage of these companies | 159,657 | 124,050
Passengers carried | 570,617,563 | 455,365,447
Passengers carried 1 mile | 18,953,025,000 | 14,776,368,000
Tons of freight carried | 1,116,877,052 | 916,123,410
Tons of freight carried 1 mile | 151,974,495,000 | 121,589,399,000
Passengers killed in train accidents | None | None
Passengers injured in train accidents| 2,585 | 2,695
-------------------------------------+-----------------+----------------
This table proves that the area of perfect safety, so to speak, was
extended over from 22% to 26% more units of risk in 1909 than in
1908, which already held the palm for immunity in train accident
fatalities to passengers.
The figures given above as to passengers injured in train accidents
are equally illuminating as to the safety of American railways,
for they demonstrate that with the multiplication of risks in 1909
the number of injured was less by 4%. The fact that no passenger
is killed in train accidents is more or less adventitious, but a
reduction in the number injured testifies to a reduction in the
opportunities for fatalities.
During the past ten years the average of passengers injured in train
accidents on British railroads has been 580, which, considering the
difference in the units of risk, is 100% higher than the above record
for 159,657 miles of American railway in 1909.
The following table, which includes no less than six great systems of
over 2,000 miles each, presents similar data in respect to the ten
roads whose record for safety to passengers in train accidents is
marred by a single fatality:
SUMMARY OF MILEAGE AND TRAFFIC OF ROADS ON WHICH ONLY ONE PASSENGER
WAS KILLED IN A TRAIN ACCIDENT DURING THE YEAR 1909.
=========================================+===============
| 1909
-----------------------------------------+---------------
Number of operating companies | 10
Mileage of these companies | 27,681
Passengers carried | 185,447,507
Passengers carried 1 mile | 5,778,621,000
Tons of freight carried | 213,086,612
Tons of freight carried 1 mile | 40,177,881,000
Passengers killed in train accidents | 10
Passengers injured in train accidents | 778
-----------------------------------------+---------------
These figures show a mileage of 4,481 miles greater than all the
railways of the United Kingdom, approximately one-half the passenger
mileage, and over three times the ton mileage, with only 10
passengers killed in train accidents, to an average of 20 on British
railways during the past ten years.
Further analysis of the returns to the Bureau, since data along this
line has been compiled, affords the following statement of the number
of roads and their mileage that have records of entire immunity from
fatalities to passengers in train accidents of from one up to six
years:
STATEMENT SHOWING NUMBER OF RAILWAYS AND MILEAGE ON WHICH NO
PASSENGER HAS BEEN KILLED IN A TRAIN ACCIDENT, 1904 TO 1909.
=======================================+===========+=========
| Number of | Miles of
| Companies | Line
---------------------------------------+-----------+---------
Six consecutive years, 1904-1909 | 17 | 9,641
Five " " 1905-1909 | 95 | 44,894
Four " " 1906-1909 | 177 | 57,331
Three " " 1907-1909 | 228 | 69,713
Two " " 1908-1909 | 287 | 108,710
One year, 1909 | 347 | 159,657
---------------------------------------+-----------+---------
Gratifying and remarkable as was the immunity from fatalities of the
class under consideration in 1909, the fact that for a period of five
years 95 American roads with a mileage practically double that of
all British railways have carried hundreds of millions of passengers
without a fatality to one of them is so at variance with the popular
impression regarding the dangers of American railway travel as to
seem little short of marvelous.
The impressive character of this showing will be better appreciated
when it is understood that the immunity from fatalities in train
accidents represents consecutive years counting back from 1909.
No road has been admitted to the list where the immunity has been
interrupted by a single accident. With this fact in mind, the clean
slate of the 17 roads for six years challenges admiration, especially
as the Bureau's reports in 1904 covered less than two-fifths of the
operated mileage of the United States.
RAILWAY ACCIDENTS IN 1909.
Having thus shown the gratifying immunity from fatalities to
passengers in train accidents during the year 1909, and on 9,641
miles of line since 1904, it remains to present the reverse side
of the picture, which is so invariably thrust forward in official
documents. Accident Bulletin No. 32 of the Interstate Commerce
Commission furnishes the following data as to the number killed and
injured on the railroads of the United States during the last two
fiscal years:
SUMMARY OF CASUALTIES TO PERSONS IN RAILWAY ACCIDENTS FOR THE YEARS
ENDING JUNE 30, 1909 AND 1908.
================================+================================
| 1909
+---------------+----------------
Class of Accident | Passengers | Employes
+------+--------+-------+--------
|Killed| Injured| Killed| Injured
--------------------------------+------|--------+-------+--------
Collisions | 94 | 3,033 | 248 | 2,362
Derailments | 37 | 2,717 | 227 | 1,448
Miscellaneous train accidents, | | | |
including locomotive | | | |
boiler explosions | -- | 115 | 45 | 1,067
+------+--------+-------+--------
Total train accidents | 131 | 5,865 | 520 | 4,877
+------+--------+-------+--------
Coupling or uncoupling | -- | -- | 161 | 2,353
While doing other work | | | |
about trains or while | | | |
attending switches | -- | -- | 93 | 14,315
Coming in contact with | | | |
overhead bridges, structures | | | |
at side of track, etc | 2 | 36 | 76 | 1,229
Falling from cars or engines | | | |
or while getting on or off | 137 | 3,076 | 481 | 10,259
Other causes | 65 | 3,139 | 1,125 | 18,771
+------+--------+-------+--------
Total (other than train | | | |
accidents) | 204 | 6,251 | 1,936 | 46,927
+------+--------+-------+--------
Total (all classes) | 335 | 12,116 | 2,456 | 51,804
| | | |
Totals in 1907: | | | |
In train accidents | 410 | 9,070 | 1,011 | 8,924
In other than train accidents | 237 | 4,527 | 3,342 | 53,765
+------+--------|-------+--------
All classes of accidents | 647 | 13,597 | 4,353 | 62,689
--------------------------------+------+--------+-------+--------