three lines, B, D, and E, between the cities A and C (Diagram, page
176). B, being the shortest, will get most of the business when
rates are the same (10 cents, for instance) by each line. But D
and E insist upon participating, so they demand that B shall allow
them to operate lower or "differential" rates--that is, B must
maintain his rate at 10 while allowing D to charge only 8 and E 6
cents, on account of their disadvantages. So that a differential is
practically a premium offered for business by an inferior line.
The foregoing will illustrate how the rivalry of railroads with
each other complicates the making of rates. But even more difficult
to manage is the rivalry of markets, and of products, and of new
methods which threaten property invested in old methods; as, for
instance, the dressed-beef traffic from the West threatens the
investments in slaughter-houses and stock-yards in the East.
As the roads have found it necessary to act together in
establishing running rules and regulations, so, in spite of
all rivalries, there must also be joint agreements reached in
some way concerning rates. Usually the roads serving a certain
territory form an "association," and their freight agents form
"rate committees," which fix and publish joint rates. A tariff
published by one of the trunk lines from the Eastern cities forms a
good example. As the result of many long and bitter wars and many
compromises, it has been agreed among these roads that the rates
from New York to Chicago shall form a basis for all other rates,
and a scale has been fixed showing the percentage of the Chicago
rate to be used as the rate to each important point in the West.
Thus Pittsburgh, Pa., is 60 per cent. of Chicago rate; Indianapolis
is 93; Vandalia, 116. The tariff above referred to gives an
alphabetical list of some 5,000 towns reached over these roads, and
opposite each town the figure showing its percentage of the Chicago
rate. The list begins with Abanaka, O., 90, and ends with Zoar, O.,
74.
The tariff next gives what is called the "Trunk Line
Classification," which is a list comprising every article known to
commerce, in all the different conditions, shapes, and packages in
which it is offered for transportation, and opposite each article
is given its assigned "class." This particular classification
assigns every article to one of six regular, or two special,
classes, and the present rates to Chicago in cents per 100 lbs.
are given as 75, 65, 50, 35, 30, 25, 26, 21. The list of articles
begins with Acetate of Lime, in car-loads, 5th class; in less
quantities, 4th; and ends with Zinc, in various forms from 1st to
6th--comprising in all nearly 6,000 articles. From these tables any
desired rate readily appears. Thus, 500 pounds of acetate of lime
would cost, from New York to Zoar, O., 74 per cent. of Chicago's
4th class rate, or 74 per cent. of 35--say, 26 cents per 100 lbs.,
or $1.30.
There is also given in the tariff pamphlet a list of some 300
manufacturing towns in New England, from each of which the same
rates apply as from New York. So, on the whole, the pamphlet gives
rates on about 6,000 articles from 300 points of origin to 5,000
destinations.
In different sections of the country different classifications are
in use, some of them embracing twenty or more classes, and allowing
finer shades of difference between articles according to their
value, bulk, or many other varying conditions which determine the
class into which each article is put.
Great efforts have been made to bring about a uniformity of
classification over the whole United States, and the number of
classifications in extensive use has been reduced from a very large
number to perhaps a dozen.
But absolute uniformity cannot be obtained under the widely
different conditions which prevail in different sections, without
great loss and sacrifices somewhere. A road, for instance,
competing with a river or canal must adjust the classification of
the particular kinds of freight best adapted to river or canal
transportation so as to secure the traffic in competition with
boats. It must almost entirely disregard bulk, value, and all other
conditions upon which a road not affected by this particular kind
of competition arranges its classification. Uniformity would either
force one of them to lose a legitimate business, or the other to
reduce reasonable rates.
These rates and classifications are the battle-ground for all the
innumerable rivalries of trade and commerce. Every city is here at
war with every other city, every railroad with every other road,
every industry with those which rival it, and every individual
shipper is a skirmisher for a little special rate, or advantage,
all to himself. State legislatures and commissions, Congress, and
the Interstate Commerce Commission are the heavy artillery which
different combatants manage to bring into the contest. On these
rates probably a million dollars are collected every day, yet it is
very rarely that the _positive_ rates are fought over or complained
of. Their average is considerably below that of the average rates
of any other country in the world, even though other nations have
cheaper labor and denser populations. Fifty cents for carrying
a barrel of flour a thousand miles cannot be called exorbitant,
and, indeed, the retail prices paid for bread and clothing would
probably not be reduced in the slightest were the transportation
of all such articles absolutely free. But the battle is over the
_comparative_ rates to different points, over different routes, and
for different commodities.[19]
Passenger rates are established in much the same manner as freight
rates. There are passenger-agents' associations and conventions,
and they fight as do the freight men over comparative rates and
differentials, and commissions to agents. The last within a few
years has been a fearful abuse, and is not yet entirely abolished.
This will illustrate:
[Illustration: (Diagram of railways connecting A to E.)]
The road A B has two connections, C and D, to reach E. It sells
tickets over each at the same rate, and stands neutral between
them. But C agrees with A's ticket-seller that he will give him a
dollar for every ticket he can sell over C's line. D finds that
he is losing travel, and offers, privately, a larger commission.
Neither knows what the other is doing. The ticket-seller gets his
regular salary from A, and from C and D often enormous sums as
commissions, and is interested, not in sending ignorant travellers
over the line which might suit them best, but over the one paying
him the largest secret commission. This should be held as against
public policy, because it tends to prevent reductions in rates
to the public by robbing the roads of much of their revenue, and
it also demoralizes the officers who handle a business which is
practically but the giving away of large sums of money as bribes.
There is another practice in the passenger business which is unfair
at the best and is the source of many abuses. It is charging the
same to the man with no baggage as to the man with a Saratoga
trunk. If the baggage service were specially organized as a trunk
express, it could be more efficiently handled and without any
"baggage smashing," while the total cost of travelling to persons
with baggage would be no more than at present, and to those
without, much less.
As an illustration of the sort of abuses to which it is now liable,
I may cite a single case. I have known a merchant buy a lot of
twenty trunks for his trade, pack them all full of dry-goods,
check them to a city 1,000 miles away by giving a few dollars to
baggage-men, and himself buy a single ticket and go by a different
route. The roads which handled that baggage imagined that it
belonged to their passengers, and were never the wiser. While
the baggage service is free, no efficient checks can be provided
against such frauds.
Essential parts of both freight and passenger departments are the
soliciting agents. They are like the cavalry pickets and scouts of
an army, scattered far and wide over the country and looking after
the interests of their lines, making personal acquaintances of all
shippers and travellers, advertising in every possible manner,
and reporting constantly all that the enemy--the rival lines--are
doing, and often a great deal that they are not. For the great
railroad wars usually begin in local skirmishes brought on by the
zeal of these pickets when the officers in command would greatly
prefer to live in peace.
Besides their receipts from freight and passenger traffic,
railroads derive revenue also from the transportation of mails
and express freight on passenger trains, from the sleeping-car
companies, and from news companies for the privilege of selling
upon trains. Of the total revenue about 70 per cent. is usually
derived from freight, 25 per cent. from passengers, and 5 per cent.
from mail, express, sleeping-cars, and privileges. When it is
considered that high speed involves great risks and necessitates
a far more perfect roadway, more costly machinery and appliances,
and a higher grade and a greater number of employees, the fast
passenger, mail, and express traffic hardly seems at present to
yield its due proportion of income.
* * * * *
We have now followed the line of organization and management
through the physical maintenance of the road and rolling stock,
the safe handling of the trains, the establishment of rates, and
solicitation of business. It only remains to show how the revenue
is collected, how the expenses of operation are paid, and all
statistics of the business prepared. These duties are usually
united under charge of an officer called the comptroller, general
auditor, or some equivalent title. His principal subordinates,
whose duties are indicated by their titles, are the auditor of
receipts, auditor of disbursements, local treasurer, paymaster, and
clerk of statistics.
The record of a single shipment of freight will illustrate methods,
so far as limits will permit. A shipper sending freight for
shipment sends with each dray-load a "dray ticket" in duplicate,
showing the articles, weight, marks, and destination. If he has
prepaid the freight, or advanced any charges which are to be
paid at destination, it is also noted on the dray ticket. When
the drayman reaches the outbound freight depot with his load,
he is directed to a certain spot where all freight for the same
destination is being collected for loading. A receiving clerk
checks off his load against the duplicate dray tickets, keeps one
and files it, and gives the drayman the other, receipted. In case
of any loss arising afterward, the original dray ticket, made by
the shipper himself, with his marks and instructions, becomes a
valuable record. When the entire shipment has been delivered at
the loading point, the shipper takes the dray tickets representing
it to the proper desk, and receives "a bill of lading." This bill
of lading is made in triplicate. The original and a duplicate
are given to the shipper. He keeps the last and sends the former
to the consignee. It represents the obligation of the railroad
to transport and deliver the articles named on it to the person
named, or his assignee. It is negotiable, and banks advance money
upon it. But the shipper may still, by a legal process, have the
goods stopped _en route_ should occasion arise, as, for instance,
by the bankruptcy of the consignee. The goods are also liable for
garnishments in certain cases, and there is much railroad and
commercial law which it behooves the officials interested to be
well posted in. When the goods arrive at destination the possession
of the bill of lading is the evidence of the consignee's right to
receive them.
Now we will return to the shipment itself and see how it is
taken care of. The whole structure of the system of collecting
freight revenue, holding accountable all agents who assess it and
collect it, dividing it in the agreed proportions between all the
railroads, boats, bridges, wharves, and transfer companies who
may handle it in its journeys, even across the continent, and
the tabulating of the immense mass of statistics which are kept
to show, separately, the quantities of freight of every possible
class and variety, by every possible route, and to and from every
possible point of destination and departure--all this system,
neither the magnitude nor the minute elaboration of which can be
adequately described within limits, is founded upon a paper called
the way-bill.
The theory of the way-bill is that no car must move without one
accompanying it, describing it by its number and the initials
of the road owning it, and showing its points of departure and
destination, its entire contents, with marks and weights of each
package, consignors and consignees, freight and charges prepaid
or to be collected at destination, and the proportion of the same
due to each carrier or transfer in the line. And not only must a
way-bill accompany the car, but a duplicate of it must be sent
immediately and directly, by the office making the original, to
the office of the auditor of freight receipts. If the railroad
is a member of any association, as the Trunk Line Association in
New York, another duplicate is sent to its office, that it may
supervise all rates, and see what each road is doing. The sum of
all the way-bills is the total of a road's freight business. To
facilitate taking copies they are printed with an ink which will
give several impressions on strong, thin tissue-paper, forming
"soft copies," while the "hard copy," or original, goes with the
freight to be checked against it when the car is unloaded.
And while the original way-bill fulfils its important function of
conducting the freight to destination and delivery, the duplicate
which was forwarded directly to the auditor of freight receipts
has no less important purposes. It is the initial record that
freight has been earned, and it shows which agent of the company
has been charged with its collection. Before making any entries
from it its absolute correctness must be assured. For this purpose
all its figures are first checked by a rate-clerk, who is kept
constantly supplied by the traffic department with all current
rates, classifications, and percentage tables by which through
freights are divided. These way-bills, coming in daily by hundreds
and thousands, are then the grist upon which the office of the
auditor of receipts grinds, and from which come forth the accounts
with every agent, showing his debits for freight received, and the
consolidations showing the freight earnings of the road. Agents
remit the moneys they collect direct to the treasurer, who makes
daily reports of the credits due to each one. A travelling auditor
visits every station at irregular intervals and checks the agent's
accounts, requiring him to justify any difference between his
debits and credits by an exhibit of undelivered freight.
The passenger earnings are obtained from daily reports by all
conductors of their collections, and by all ticket-sellers of
tickets sold. These reports are also checked by a passenger
rate-clerk, and the travelling auditor frequently examines and
verifies the tickets reported by agents as on hand unsold.
After the auditor of receipts has finished with the way-bills and
ticket reports, they go to the statistical department, where are
prepared the great mass and variety of statistics required by
different officers to keep themselves thoroughly posted on the
growth or decrease of business of every variety, and from and to
every market reached by the road. Finally, the way-bills are filed
away for reference in case of claims for overcharges, or lost or
damaged goods.
The auditor of disbursements has supervision of all expenditures of
money, which is only paid out by the paymaster or treasurer upon
vouchers and pay-rolls approved by proper authority. The vouchers
and pay-rolls then form the grist upon which his office works, and
from which are produced the credits to be given all officers and
agents who disburse money, and the classified records of expenses,
and comparison of the same with previous months and years, and
between different divisions.
* * * * *
I have thus outlined the skeleton of a railroad organization, and
suggested briefly the relations between its most important parts,
and some of the principles upon which its work is conducted. The
scheme of authority is outlined in the diagram on page 185. But
space is utterly lacking to clothe the skeleton with flesh and
go into the innumerable details and adjustments involved in the
economical and efficient discharge of all of its functions.
It seems a very simple matter for a railroad to place a barrel of
flour in a car, to carry it to its destination, and to collect
fifty cents for the service. It is done apparently so spontaneously
that even the fifty cents may seem exorbitant, and I have actually
heard appeals for free transportation on the ground that the cars
were going anyhow. So it also seems a very simple matter for a
man to pick up a stone and place it on a wall. But this simple
act involves in the first place the existence of a bony frame,
with joints, sinews, and muscles, sustained by a heart, lungs, and
digestive system, with eyes to see, a brain to direct, nerves to
give effect to the will-power, and a thousand delicate adjustments
of organs and functions without which all physical exertion would
soon cease. Similarly, a railroad organized to respond efficiently
to all the varied demands upon it as a common carrier, by the
public, and as an investment by its owners, becomes almost a living
organism. That the barrel of flour may be safely delivered and
the fifty cents reach the company's treasury, and a part of it
the stockholder's pocket, the whole organization outlined in the
diagram must thrill with life, and every officer and employee, from
president to car-greaser, must discharge his special functions.
All must be coordinated, and the organization must have and use
its eyes and its ears, its muscle, its nerves, and its brain. It
must immediately feel and respond to every demand of our rapidly
advancing civilization.
Each road usually has its own individuality and methods, and its
employees are animated with an _esprit de corps_, as are the
soldiers in an army. There is much about the service that is
attractive, and, on the whole, the wages paid railroad employees
are probably in excess of the rates for similar talent in any other
industry, although labor in every other industry in the United
States is protected by high tariffs, while in this it is under the
incubus of legislation as oppressive as constitutional limits will
permit.
PRESIDENT
|
+------------------------+--------------------------+
| | |
_Secretary and Treasurer_ _General Manager_ _General_
| _Counsel_
------------------------------------+----------------------------------
|
+----------------------------------+
|
| {Auditor of Receipts
| {Auditor of Disbursements
+-Comptroller--------{Travelling Auditor
| {Local Treasurers
| {Local Paymasters
| {Clerk of Statistics
|
+-Purchasing Agent--+-Local Storekeepers
| |
| | {Receiving Clerks and Laborers
| | {Loading Clerks and Laborers
| | {Billing Clerks
| ...+-Station Agents--{Discharging Clerks and Laborers
| : | {Delivery Clerks
| : | {Collectors {Yard Engines
| : | {Yard Master----{Switchmen
| : | {Brakemen
| : |
| : |
+-Superintendent of | {Train Despatchers
| Transportation-+-Train Master----{Operators
| | {Conductors
| | {Trainmen
| |
+-Division | {Engine Runners
| Superintendents---+ +-Foreman {Firemen
| | | Machine Shop--{Hostelers and
| | | { Cleaners
+-Superintendent of | | {Mechanics
| Machinery-+-Master Mechanic-+ {Laborers
| | |
| | | {Car Inspectors
| | +-Foreman {Greasers
| | Car Shop----{Mechanics
| | {Laborers
| |
| |
| | {Bridge Foremen
| | +-Supervisors {Watchmen
| | | of Bridges---{Carpenter Gangs
+-Superintendent of | | {Mason Gangs
| Roadway-+-Road Master-----+
| | {Section Foremen
| +-Supervisors {Gangs and Track
| of Road---{ Walkers
| {Wood and Water
| { Tenders
| {Floating Gangs
| {Construction
| { Trains
+Car Accountant-------Lost Car Agents
|
| +-General {Travelling Agents
| | Passenger Agent---{Local Agents
| | {Rate and Division Clerks
+Traffic Manager----+-Claim Agent
|
+-General {Travelling Agents
Freight Agent-----{Local Agents
{Rate and Division Clerks
Diagram showing the Skeleton of a Railroad Organization, and Lines of
Responsibility.
In Europe, where the pooling system practically prevails, the
service is much more stable than in the United States, and in many
instances there are pensions and insurances and disability funds,
and regular rules for promotion and retirement, and provision for
the children of employees being brought into service in preference
to outsiders. Such relations between a company and its employees as
must result from arrangements of this character are surely of great
benefit to both. They are the natural outgrowth of _stability of
business_. Their most advanced form is found in France, where each
road is practically protected from dangerous competition by means
of a division of territory. In the United States we are still in
the midst of a fierce competition for territory and business, and,
as pooling is forbidden, the railroad companies will be in unstable
equilibrium until consolidation takes place. As that goes on, and
large and rich corporations are formed, with prospects of stability
in management and in business, we may hope to see similar relations
established between our companies and their employees. Already
there is a beginning upon some of the largest roads, such as the
Baltimore & Ohio and the Pennsylvania Central. But the ground still
needs preparation also on the employees' side, for our American
spirit is aggressive and is sometimes rather disposed to resent,
as interfering with its independence, any paternal relations with
a corporation. And as we have before found railroad management
in intimate contact with every problem of finance and commerce,
it is here confronted with the social and industrial questions
involved in labor unions and problems of co-operation. As to the
results, we can only say that, as war is destructive, no state of
warfare, even between capital and labor, can be permanent. Peaceful
solutions must prevail in the end, and progress toward stability,
peace, and prosperity in railroad operation and ownership will be
progress toward the happy solution of many vexed social questions.
FOOTNOTES:
[14] See "How to Feed a Railway," page 302.
[15] See "The Freight-car Service," page 275.
[16] Of course, this "stringing" of an extra train is not always
done in actual operation. Practice and experience will give as
wonderful expertness to a train-despatcher in handling trains "in
his head" as to a mathematician in solving problems, and often all
trains on a road will be handled entirely "by order," or as extras.
But the example given illustrates the principle upon which expert
practice is based.
[17] See "Safety in Railroad Travel," page 204.
[18] See "The Freight-car Service," page 288.
[19] An idea may be gained of the extent and minuteness of the
classification, and of the constant changes and adjustments,
both of rates and classifications, perpetually going on from the
following partial list of subjects submitted to a recent meeting
of the Rate Committee of the Southern Railway and Steamship
Association.
RATES.--Watermelon rates; canned goods, Richmond to Atlanta; rates
on cement from Eastern cities to Association territory; rates
on sulphuric acid from Atlanta; rates from Atlanta, etc., to
California and Transcontinental terminals; special iron rates from
Cincinnati, etc., to Carolina points; rates on earthenware, East
Liverpool to S. E. territory; rates on cotton bags to Memphis from
Atlanta; rates on fertilizers to Mobile, Ala.; beer rates; rates
on special iron articles from Chattanooga; rates from the West to
Camden, S. C.; rates from Evansville and Cairo, on business from
points between Cairo, Evansville, and Chicago.