Gross ton mileage—Baggage and express cars, 444,240,000x30 tons13,327,000,000Sleepers, diners and parlor cars, 200,000,000x50 tons10,000,000,000Coaches, etc., 1,263,000,000x40 tons50,550,400,000———————Total ton miles dead weight73,877,400,000———————Ton miles of passengers, 27,718,030 (a) passenger miles at 150 pounds per passenger2,078,891,552Ton miles of baggage and express, 444,240,000 car miles estimated at only 3 tons average load in a car1,332,700,000——————Total ton miles revenue load3,411,591,552Total gross ton miles77,288,991,552Total revenue received from passengers and express$621,939,274Total revenue received per gross ton mile (cents)0.805Total revenue received per revenue ton mile (cents)18.23Ratio of paying weight to dead load1 to 21.7FREIGHT SERVICE.Total miles run by freight cars (a)17,122,259,754Total ton miles dead weight, each car estimated at 15 tons (b)256,833,896,310Total ton miles revenue freight (a)236,601,390,413———————Total gross ton miles510,557,546,477Ratio of paying to dead load1 to 1.1Total revenue received for transporting freight$1,823,651,998Total revenue received per gross ton mile (cents)0.369Total revenue received per revenue ton mile (cents), (a)0.759Tons per car revenue freight (loaded and empty)13.8Revenue per car mile (cents)10.5(a) Statistics of Railways of United States, 1907.(b) Experience of Union Pacific and Southern Pacific Systems.
RELATIVE COST OF SERVICE.
To determine the relative costs to the railroads of performing mail, passenger and freight service, we must allocate the expenses to freight and passenger service as a whole, afterwards apportioning the latter to mails and other service. Railroad operating expenses apply jointly to both passenger and freight trains, so that, with few exceptions, it is impossible to determine exactly from any published statistics the cost of passenger train service as distinguished from freight. There are some items of train mile expense directly connected with movement which are less for passenger than for freight trains, whilst, on the other hand, many other expenses are greater for passenger than for freight, such as danger from casualties, necessity of expensive terminals, delays to other traffic through preference given to passenger trains, additional main tracks, and, particularly, higher standards of maintenance of roadbed required for high speed passenger train movement.
On account of the impossibility of separating the expenses, we assume that the above factors about balance each other and that the average cost of runningalltrains can be taken as either passenger or freight train mile cost, respectively, without serious error.
We allocate a proportion of the passenger train cost to the mails on the basis of the gross ton miles handled in each class of passenger traffic.
The relative revenues and expenses are shown on opposite page, mail revenues being as shown by 1908 Report of Postoffice Department, and other statistics as given in the 1907 Statistics of Railways of the United States, published by the Interstate Commerce Commission, or are computed therefrom.
ALL RAILROADS IN UNITED STATES.
Summary of Mail, Passenger and Freight Service.
Mails.Other Passenger.Total Passenger.Freight.Gross revenue$ 48,155,379$621,939,274$670,094,653$1,823,651,998Operating expenses$ 96,322,357$677,614,637$773,936,994$ 974,577,820Taxes and interest on bonds$ 23,503,973$165,582,552$189,086,525$ 235,468,467Total expenses$119,826,330$843,197,189$963,023,519$1,210,046,281Surplus———$ 613,605,711Deficit$ 71,670,951$221,257,915$292,928,866—Ton mileage (thousands)—Revenue weight484,6833,411,5923,896,275236,601,390Dead weight10,498,48273,877,40084,375,882256,833,896Total gross10,983,16577,288,99288,272,157493,435,286Tons dead weight per ton revenue21.721.721.71.1Per gross ton mile (cents)—Gross earnings0.4380.8050.7590.369Operating expenses0.8770.8770.8770.197Earnings over operating expenses———0.172Operating expenses over earnings0.4390.0720.118—Taxes and interest on bonds0.2140.2140.2140.048Surplus———0.124Deficit0.6530.2860.332—Per cent of operating expenses to earnings20010911553Gross expenses to earnings24913514467Figures exclude dividends, betterments and additions, etc.
The above shows that whilst passenger service as a whole is unremunerative, the mail earnings are hardly what they should be to pay a fair share of the railroad operating expenses only, regardless of taxes and interest.
Or, put in another way, our computations have shown that in each passenger train run the railroads haul an average of 43/100 of a mail car, and the contents of this car yielded average earnings of 9.4 cents for each mile run. The computation just made shows that each freight car run, loaded or empty, yields a revenue to the carrier of 10.5 cents per mile. Incredible as this may seem, it is understandable when we reflect that the railroads transport 1.1 tons of dead weight for each ton of freight for which they are paid; withmail they transport 21.7 tons, or twenty times as much. The freight rate is .759c per ton mile, the mail rate 9.94c, or only thirteen times as much.
Arguing in still another way: Average number of cars in each passenger train handled in United States is 3.95, of which mail cars amount to 0.43, or 11 per cent. Eleven per cent. of the average earnings of a passenger train is 13.8 cents, but mail contributed only 9.4 cents. That is, it should pay 47 per cent. more than it does to be made to contribute a fair share to the insufficient earnings of a passenger train. Mails are fairly responsible on basis of space used for 11 per cent. of the cost of running a passenger train, or 16.17 cents, and as dead weight per foot of space is greater with mails, their proportion of train mile cost is even larger. They pay little more than one-half this cost.
By building larger capacity cars and larger engines, the cost of handling freight traffic, entirely in the control of the carrier, has been reduced to follow rate reductions and increased expenses.
On the other hand, because methods of conducting passenger traffic are largely—and mail traffic entirely—beyond their control the cost of handling mail and passengers has been steadily increasing, and, as revenue has not increased, the net revenue or margin of profit has been cut to a point where it is unremunerative.
The argument advanced by advocates of reduced mail pay, that increasing density permitted economies and that lower rates would yield more net, is not applicable when the carriers' hands are tied and measures of economy so successfully applied to handling freight are prohibited. The following will illustrate this:
On routes where pouch service is used mail is handled with express and baggage without much increase of cost over other passenger traffic. A somewhat greater mail traffic obliges the railroads to furnish apartment cars, at increased expense and dead weight for the postoffice feature, but still permitting the railroads to carry other traffic in the same car. A still further increase in weight means the establishment of full R. P. O. lines for which the railroads receive extra, but inadequate, compensation, these cars being used for no other class of traffic and adding largely to the weight and cost of train service. Even after the route has been made an R. P. O. route, the railroads are not permitted to economize by carrying more mail in the car, and as traffic density grows the roads must under the requirements of the Department add morecars, almost in proportion to the business, as the loads carried in R. P. O. cars, as shown by recent special weighing, average only 2¾ tons, and many of them return empty—for which empty haul the railroads often receive no pay. When the mail business has assumed very large proportions and the R. P. O. cars have multiplied in ratio therewith, special trains are then added to carry the bulk of the mail, being run at very high speed and adding to the railroad expense account in a far higher degree per unit of business than any other class of traffic.
In contrast to the above, baggage and express are very generally hauled in the same and a much lighter and less costly car than the mail car, and increase in tonnage is accommodated by hauling greater loads per car. In the case of freight, increased density means larger car and train loads and greatly reduced costs of operating per ton mile.
Despite these differences in conditions, the automatic scale has secured to the Government a larger reduction in mail rates per ton mile in the last ten years than the percentage of fall in freight rates, despite higher labor and material costs of railroad operating. As a result, the mail business—which, according to evidence introduced before the Congressional Committee of 1899, was unprofitable at that time, has been made more unprofitable at the present time by the heavy rate reductions of 1906-7.
As the greatest reduction made deals with mail routes on which traffic is heaviest, a consideration should be given to the following conditions of handling mail on such routes:
HEAVY TRAFFIC MAIL ROUTES.
On very many of the heavy traffic routes where the principal reduction in pay occurred a large part of the mail is now handled in special mail trains run at excessively high rates of speed. Such trains introduce the following conditions:
1. A very much greater liability to accident. A large proportion of the deplorable accidents that have occurred on the American railroads in recent years have occurred to excessively high speed trains, accidents to such trains being almost invariably destructive to life and property. An examination of serious accidents on the Union Pacific System and Southern Pacific Company for the calendar year 1906 shows that 36 per cent. of the property damage from all causes, including negligence, as traceable to trains not under control and excessive speed, whilst 30 per cent. additional damagewas due to causes that might prevent inferior trains getting out of their way, such as keeping main line on time of superior trains, failure to observe signals or orders, etc.
2. Mail trains run at excessive high speed are much more expensive to operate than other trains, for the following reasons:
(a) Fuel consumption per traffic unit is very much greater at high speed because of diminished tractive power of locomotives.(b) A relative greater hauling capacity of locomotives must be consumed in moving trains at higher speeds.(c) Excessive speed requires higher standards of track maintenance, double-tracking, block signals, heavy rail, better ballasted roadbed, etc., etc.(d) High speed means increased wear and tear on equipment and track.(e) High speed trains are expensive, delaying and adding to the cost of other traffic.
(a) Fuel consumption per traffic unit is very much greater at high speed because of diminished tractive power of locomotives.
(b) A relative greater hauling capacity of locomotives must be consumed in moving trains at higher speeds.
(c) Excessive speed requires higher standards of track maintenance, double-tracking, block signals, heavy rail, better ballasted roadbed, etc., etc.
(d) High speed means increased wear and tear on equipment and track.
(e) High speed trains are expensive, delaying and adding to the cost of other traffic.
3. Speed of trains carrying mails has been constantly increased, a study made of the speed per hour made on fastest trains on which R. P. O. cars are handled on seventeen of the principal mail routes giving the following results:
Average of fastest train on seventeen mail routes:
SpeedYear.(Miles per Hour.)Relative.190542.21136189939.23126189034.35110188531.34100Average increase per year0.55
With the above increase in speed, rates paid the railroads have automatically decreased whilst expenses have largely increased to provide for the above greater speed and because of increase in prices of labor and materials of all kinds in the past five or six years. This increase in speed has been made coincident with growth of freight traffic, which is the railroads' profitable business,the non-profitable high speed trains delaying the profitable ones, increasing their cost and incurring liability to accident.
4. Earnings of mail trains supposedly high are not higher than other passenger trains, which, as a whole, earn very much less permile run than freight, relative figures being as shown by last report of the Interstate Commerce Commission—as 100 is to 218, whilst the cost of running passenger trains is as much, if not more. This is particularly the case with high speed passenger trains, which is the most unprofitable business in which railroads are engaged. (On Union Pacific System last year earnings per passenger train mile were $1.71, per freight train mile $4.31.)
5. Passenger engines in hauling fast passenger trains on principal main lines at the present time have assumed, on account of increased weight of equipment and excessive speed required, enormous proportions. We now have in such service on our lines engines weighing exclusive of tender 222,000 pounds, this power being 60 per cent. heavier and twice as costly as locomotives used in the same class of service ten years ago, burning double the amount of fuel. Engineers running these locomotives receive higher pay because of the greater size of these engines—to say nothing of recent increases made in their schedules. Such heavy power moving at fast speed is extremely destructive to the roadbed, requiring a much higher standard of maintenance than formerly, maintenance of way cost in the past few years having gone up 50 per cent. Engine failures are largely confined to fast passenger trains, and, in general, expenses are increased all along the line because of their introduction.
6. As illustrating the additions to expenses because of increased track maintenance on account of fast passenger and mail trains, we have made a study of statistics, using the Interstate Commerce report of 1906 as a basis, of seven roads having a large proportion of fast passenger service and seven roads having a moderate speed passenger service, but with a large proportion of freight service. On the roads first named the average cost of maintenance of way per mile was $2,951, and on roads in the latter class $1,565. The operating expenses per train mile in the former class were $1.47, and in the latter $1.33. The roads in the former class, on account of large number of excessively high-speed trains, were obliged to double-track their lines, which directly increased maintenance expenses.
PAY FOR RAILWAY POSTAL CARS.
The large reduction made by Act of March 2, 1907, in pay for railway postal cars was made in face of large increase in the cost of constructing such cars, due to higher prices of labor and material and greater cost of meeting the more exacting specificationsof the Postoffice Department. Changing to steel construction, increases in weight, and generally heavier operating expenses, have created an extremely large increase in cost of moving these cars. The standard railway postal car of only a few years ago, 60 feet long, weighed 80,000 pounds and cost about $5,500. The standard railway postoffice cars, 60 feet long, of wooden construction, used on the railroads with which I am connected, weigh over 100,000 pounds each, or one-fourth more weight, and costs 40 per cent. more, whilst our new standard postal cars of steel construction weigh 108,000 pounds and cost over $9,000, or 60 per cent. more than the car of a few years ago.
An argument sometimes made in favor of a lowering of R. P. O. car pay is that for apartment cars used in runs where mail density does not require a full car, no additional compensation is allowed. But we feel that a fair consideration of the circumstances under which mail is handled as compared with other traffic will justify the conclusion that this is not an argument in favor of reducing R. P. O. pay, but rather for allowing the railroad additional compensation for the apartment cars as well. Both services require the furnishing of special features in the way of traveling postoffices not required except for the convenience of the Postoffice Department to enable it to do work while mail is in transit, such as ordinarily performed in office buildings. The full postal car is more expensive to the roads, as it always means additional car service, whilst in some cases of apartment cars the space not occupied by the traveling postoffice is adequate to take care of baggage and express, though very frequently this service also means additional car movement that would not be necessary but for the postoffice feature.
The saving to the railroads from reduction in car mileage that would be possible if it were not obliged to furnish traveling postoffices, but could use the space occupied by racks and other postoffice features by loading additional mail in cars, would be many times the revenue allowed by the railway postal cars.
To illustrate: The car mileage of postal cars (changing apartment cars to full cars on basis of length) is 232,180,000 per annum; the ton mileage of mail 484,683,135, or 2.09 tons per car. From figures obtained from the Postoffice Department, average car weights shown on page 59, table "EE," special mail weighing of 1907, it is ascertained that storage mail cars, which, of course, contain no postoffice features, carry an average of 7.04 tons of mail. At this rate the whole mail business could be carried by the movement of 68,844,000 car miles, or 163,336,000 less than actually employed, due to the postoffice features. The total railway postal car pay is only $4,567,366, or only 2.8 cents per additional car mile, whilst the operating expenses chargeable to running these 163,336,000 car miles, of 70 per cent. of the total movement, amount to $67,000,000.
But for the postoffice feature, the combined weight of an entire route could many times be handled in a single car such as is used for express instead of several heavy and expensive postoffice cars, whilst often extra cars for storage mail must be added, for which no extra pay is allowed, the cost of running these storage cars also not being included in the computation of cost of service, as no accurate statistics of their number or car mileage are available.
In addition to the furnishing of storage cars, although many R. P. O. routes are paid for on a basis of 40 foot cars, it is not economical for the railroads to construct such cars which are not interchangeable with other equipment and which would have to be thrown aside if through growth of traffic larger cars are afterwards required. As a result, full 60-foot R. P. O. cars have for years been furnished on many 40 and 50-foot routes, the railroad getting no credit for this, whilst on many other routes R. P. O. cars have been run in advance of the fixing of R. P. O. pay for them.
On a number of routes postal car pay has been allowed for running full cars in one direction only, classing such routes as half-lines. This obliges the railroads to move the car in the opposite direction without pay, the small additional compensation of less than 4 cents per mile run received in one direction being entirely inadequate to compensate the road for the empty haul—to say nothing of allowing anything for moving it in direction for which pay is received. To illustrate: The Union Pacific Railroad in one case between Council Bluffs, Iowa, and Ogden, Utah, 1,003 miles, receives no pay for handling east-bound a 60-foot mail car, which is paid for west-bound only, six mail cars being required on this line. The R. P. O. pay per car mile, including movement in both directions, is only 2.24 cents, or about what would be received for transporting a single passenger, although a standard passenger coach has a capacity for 70 passengers.
In connection with the railway postoffice, an item not often considered is the value of transportation furnished clerks in the railway mail and compartment cars. Figuring this at 2 cents per mile, which is about the lowest passenger fare, the total value of this transportation for clerks in railway postoffice cars would be $8,600,000 per annum, or $4,000,000 more than the railroads receive for the handling of these cars, and the value of transportation in the case of apartment cars would be $4,000,000 per annum additional. In addition to this, a large amount of free transportation is required annually by the Postoffice Department for inspectors and other officers of the Department.
The Postoffice Department issues annually about six hundred traveling commissions to postoffice inspectors and other postal officials, and requires railroad companies to honor such commissions for free transportation on all trains on all lines on which mails are carried. In some cases these commissions are issued to Government officials whose official duties are in no way connected with the transportation of mails on railroads. The railroads have no control whatever over the issuance of these commissions and can not even secure from the Postoffice Department a list of them, the Department holding that the list is confidential. These commissions are frequently used for personal travel in violation of the rulings of the Interstate Commerce Commission. In brief, the Postoffice Department in effect arbitrarily issued about six hundred annual passes over every mail carrying railroad in the United States, which is equivalent to about 200,000 annual passes.
POSTAL DEFICIT.
In investigating the subject of railway mail pay, we have been struck very forcibly with changes which have taken place in the revenues and expenditures of the Postoffice Department since 1899, when this subject was last reviewed. Although postal operations still show a deficit, it is a fact that its revenues have increased in a remarkable degree, and the deficit is certainly not due to the amounts paid to the railroads for hauling mail, as these payments are relatively far less now than formerly. Revenues of the Postoffice Department have grown from $102,000,000 in 1900 to over $191,000,000 in 1908, or 87 per cent., this increase in revenue in eight years being as great as the entire increase in the previous thirty-five years.
But in this same period of eight years there was an increase of $100,600,000, or 93 per cent., in Postoffice Department expenditures, of which only $10,900,000, or 11 per cent., was paid to the railroads, $33,935,000, or 34 per cent., going to Rural Free Delivery, $25,000,000, or 25 per cent., to postmasters and their clerks, and the balance to other items.
The following statement shows for the year 1895 and for the years 1899 to 1908, inclusive, postal revenue and postal expenditures divided between amounts paid the railroads, cost of rural delivery and other expenditures:
REVENUE.EXPENDITURES.Year.PaidRailroads.RuralDelivery.Other.Total.1895$ 70,983,000$31,189,000(a)$ —$57,637,000$88,826,000(a)189995,021,00035,775,000150,00065,607,000101,632,0001900102,355,00037,315,000420,00070,005,000107,740,0001901111,631,00038,161,0001,778,00075,616,000115,555,0001902121,848,00039,519,0003,998,00081,269,000124,786,0001903134,224,00041,377,0008,102,00089,305,000138,784,0001904143,583,00043,971,00012,682,00095,709,000152,362,0001905152,827,00045,482,00020,824,000101,093,000167,399,0001906167,933,00046,953,00024,774,000106,543,000178,270,0001907183,585,00049,831,00026,643,000113,754,000190,238,0001908191,479,00048,155,00034,355,000125,842,000208,352,000(a) Includes $1,646,741 accrued in favor of Pacific Railroads in 1895, but not charged to postal expenditures.The railroads are themselves large contributors to the revenues of the Postoffice Department. It is ascertained that nine roads, covering 27,500 miles, pay annually $261,000 for postage stamps, or at the rate of $2,000,000 for the entire railroad mileage of the country.
The next statement shows clearly that the ratio of expenses to receipts of the Postoffice Department would in 1908 have been but 91 per cent. and no deficit but for the expenditures made for Rural Free Delivery, the amount paid the railroads being now only 25 per cent. of the total revenue as compared with 41 per cent. in 1895.
RATIO OF EXPENSES OF POSTOFFICE DEPARTMENT TO POSTAL REVENUES 1895-1908.
PercentagePercentagePercentageof Postal Rev.Paid toPaid toYear.Paid to R'ys.Rural Free Del.Other Expenses.Total.1895410751161899380691071900360691051901341691041902323671021903316661031904319661061905301466110190628156310619072715621041908251866109
In order to avoid a deficit, attention has been concentrated on this 25 per cent. of the postal expenditure, which we contend is at least not an unfair compensation to the railroads for services rendered. Though the proportion of the total revenue going to the railroads has fallen one-third in ten years, the deficit still remains, and is it reasonable to suppose that any reduction in railway mail pay would not be speedily absorbed in other directions? On the contrary, ought not efforts be concentrated to bring within reasonable figures the other expenses of the Department, which now absorb 84 per cent. of its revenue as compared with only 69 per cent. in 1900—despite an actual growth in postal revenue in the same time of $89,000,000, or 87 per cent.?
It will be noted from these figures that a reduction of 10 per cent. in the ratio of railway mail pay to total revenue can be entirely wiped out by an increase of only 3 per cent. in other postal expenses, whilst a retrenchment of 10 per cent. in the latter would have put the Department almost on a paying basis, notwithstanding the heavy cost of Rural Free Delivery. From 1895 to 1908 actual totals show that the railroads' pay has increased 54 per cent. for handling 114 per cent. more mail tonnage, whilst in the same period other expenses of the Postoffice Department have grown 178 per cent., revenues increasing 149 per cent.
Increased mail business means a direct increase in postal revenue, as postage remains the same regardless of tonnage, but carryingthis increased business on the part of the railroads means less proportionate revenue to them according to volume of tonnage, so that the proportion of the postal revenue they now receive is very much less than formerly. Labor, material, and the price of everything sold in commerce have advanced materially, as we all know, in the past seven or eight years; railway mail pay being practically the only thing that has decreased in the face of conditions that should have raised it.
As a large increase in mail tonnage means to the Postoffice Department about an equal increase in revenue with a decreased payment per ton to the railroads through lower rates, the avoidance of a deficit would seem not a difficult matter if other postal expenses were kept at least within sufficient control, so they would not increase faster than the increase in volume of mail handled.
The Postoffice Department enjoys this peculiar advantage of receiving with the growth of the country an increase in revenue directly in proportion to the increase in business handled. In disbursing this revenue, it must pay less to the railroads in proportion to the density of business, thus retaining to apply on other expenses a larger net revenue year by year. It is reasonable to suppose that the cost of many branches of the Department should not increase in the same ratio as tonnage of mail (for example, that expenses of individual postoffices and administrative and general expenses should not grow in this proportion). Yet, regardless of these favorable influences, expenditures in other directions have absorbed the great net revenues after paying the railroads, and it is in these directions that the cause of the postal deficit must be looked for.
The growth of these expenditures, which since 1900 has been much faster than the rise in mail tonnage, is shown in the following comparison of 1908 with 1898:
1908.1898.Increase.Pct.Ton mileage of mails handled by railroads484,683,135272,714,017211,969,11878Postal revenues$191,478,663$89,012,619$102,466,044115Less paid to railroads48,155,37934,379,22713,776,15240Net applicable to other expenditures143,323,28454,633,39288,689,892162Other expenditures160,196,50763,654,29796,542,210152Deficit16,873,2239,020,9057,852,31887Per ton of mail handled by railroads (cents)—Postal revenues39.532.6+6.9Paid to railroads9.912.6-2.7——————Net applicable to other items29.620.0+9.6Other expenditures33.123.3+9.4——————Deficit3.53.3+0.2Note.—The increase in gross postal revenue per unit of mail handled by railroads is no doubt due to increase in city mail not handled by railroads.
Chicago, Ill., March 1, 1909.
By C. C. McCain.
Chairman of the Trunk Line Association, New York, 1909; Formerly Auditor Interstate Commerce Commission.
INTRODUCTION.
The ten years or more which have elapsed since the resumption of industrial activity that began some time in 1897 have been characterized by changes in rates of wages for substantially all kinds of labor, and in the prices of most commodities which amount to a profound and material alteration in the value of money. Wages of railway labor, prices of railway materials and supplies and prices of commodities carried by railways and of those produced by the purchasers of railway transportation have rapidly increased. This is equivalent to a decrease in the value of the money in which railway charges are paidfor the appreciation of commodities is the depreciation of money. Commodities cannot have generally augmented value without money having diminished value. Railway rates have not been adjusted to this diminished value of money. The involuntary and unsolicited reduction in railway rates has gone so far as seriously to threaten the stability of railway wages and that of the whole railway industry. Some adjustment through compensatory advances in money rates (i. e., nominal rates) is, therefore, absolutely necessary. The extent of the changes which have taken place, their relation to the problem of railway rates and the adjustments which they have made necessary are set forth in the following pages.
TYPICAL UNCHANGED RATES.
A fifteen-ton car-load of fourth class freight carried all-rail between Chicago and New York at any time during the year 1897 would have brought the railways transporting it $105.00 in gross receipts.
There has been no change in the class-rates between Chicago and New York since 1897 and the same quantity of freight, classified inthe same way, produces the same gross receipts now that it did in 1897.[E]
The rates between Chicago and New York, as is very well known, are the basis of all rates in the region north of the James, Potomac and Ohio Rivers, and east of the Mississippi River and of a large proportion of the rates applicable to traffic originating or destined to any point in that region. Without a change in rates between Chicago and New York there could have been, during the continuance of the system of rate adjustment that has been in force since long prior to the year 1897, no general change in the rates based upon those in force between those cities.
WAGES OF RAILWAY EMPLOYEES.
More than forty per cent. of the gross receipts of the railways of the United States are expended in the payment of employees, the sums annually paid out for that purpose since 1897 being as follows:
Amount paid toYear.employees.1897$465,601,5811898495,055,6181899522,967,8961900577,264,8411901610,713,7011902676,028,5921903(a)776,321,4151904817,598,8101905839,944,6801906(a)927,801,65319071,072,386,427———————Total$7,781,685,214(a) Includes $19,000,000 estimated for Chicago, Milwaukee & St. Paul in 1903 and $27,000,000 for the Southern Pacific in 1906.
It is a matter of common knowledge and of frequent comment that a given sum of money will now buy very much less in labor or commodities than it would in 1897. The change has been gradual but substantially continuous and the aggregate result has been enormous. The consequence of this change has worked great hardship to those whose incomes have not been adjusted to thechanged purchasing power of money but fortunately the rates of wages of nearly all workmen and the prices of practically all products of labor expended upon farms or in factories or otherwise have been raised sufficiently to more or less completely offset it. The principal sufferers are those salaried employees whose salaries have not been readjusted and those whose incomes are received under contracts covering long periods of time or are derived from the marketing of commodities or services at prices more or less effectively controlled by custom or statute. Many of the owners of railway bonds are in the second class and all interstate railways are, as to the disposal of their services, in the third class.
As already noted, the gross revenue derivable by the railways from the transportation of a carload consisting of fifteen tons of fourth class freight between Chicago and New York is the same now that it was in 1897—i. e., $105.00. But $105.00 is worth much less to any railway now than it was in 1897 for money is worth at any time what it will buy at that time. The reports of the Interstate Commerce Commission show the following increases in rates of average daily wages paid to railway employees:
Wages per day.Class of Employees.1897.1907.Increase,per cent.Station agents$1.73$2.0518.50Other stationmen1.621.789.88Enginemen3.654.3017.81Firemen2.052.5423.90Conductors3.073.6920.20Other trainmen1.902.5433.68Machinists2.232.8728.70Carpenters2.012.4019.40Other shopmen1.712.0620.47Section foreman1.701.9011.76Other trackmen1.161.4625.86Switchmen, flagmen and watchmen1.721.878.72Telegraph operators and despatchers1.902.2618.95Employees, account floating equipment1.862.2722.04All other employees and laborers1.641.9217.07
The foregoing affords a means of ascertaining the real value of $105.00 of railway gross receipts in 1897 and 1907 and the decrease from the earlier to the later year. The following table shows thenumber of days labor of each of the different classes of railway labor which $105.00 would buy in each of the years indicated: