Railway rolling stock

“ The railway companies, too, have considerably improved their permanent ways, constructed heavier rolling stock, while the contrivances for controlling and maintaining the trains in check are of the most perfect description. ”

“ The peculiar feature of this railway is the territory attached to the concession, namely, a league on each side of the line, comprising a total of about a million of acres, one half of which is the property of the contractors, the other half belonging to the shareholders, who have, besides, the national guarantee of 7 per cent. on the capital of £1,600,000, which the railway is to cost, or about £6,500 per mile. It is, perhaps, one of the easiest railways in the world to make, the chief expense being the rails and rolling stock, few earthworks or ordinary sleepers being required. ”

“ It will be much greater in this year of large crops and added tonnage. If any manufacturer were confronted with such conditions, it would be clear to him that he must either refuse business or more than double his plant. The railroad cannot refuse business. If it could do so legally, that policy would still mean national panic and individual ruin. It must enlarge its plant. Just what this means in the expenditure of billions of dollars on new track and rolling stock I demonstrated more than five years ago, and the facts have now been accepted by all authorities. ”

“ Yearly contracts for these are made, and while the actual cost of a single ticket may not exceed one mill, [306] the aggregate on a road carrying fifteen millions to twenty millions or more passengers per annum is considerable.
To induce the public to travel, and encourage shippers to send their freight to market over any road, attention must first be paid to the condition of the track and rolling stock.
It is not economy to allow anything to be out of repair, on the supposition that it is less expensive than it would be to spend comparatively little from day to day to keep it up. ”

“ Valuable and interesting statistics have from time to time been recorded, with a view to ascertain the average life of a steel rail, by obtaining the number of million tons of train load which it would sustain before it became worn down to such an extent as to be no longer of service on the line. It will be readily understood that the rate of wear of a steel rail will depend not only on the weight and section of the rail itself, but on the class of rolling-stock, and the description of traffic it has to carry. ”

“ Other examples of waste under the present system, although not so apparent to the public, are well-known to the railway expert, and involve much greater expenditure of time and money.
I refer in particular to the waste of rolling stock, especially of goods wagons, occasioned by the multiplicity of goods stations, the transfer of rolling stock to and from the lines of different railway companies, the shunting of trains, and the large number of road vans used by the various companies. ”

“ The company might be merely the owners of a highway and toll takers for the use of it by other people with their own carriages and locomotives. That state of things would be worked out by the railway company possessing the mere line of railway from end to end, and by the persons making use of it, buying or renting contiguous land whereon to keep their rolling stock, and have their offices, availing themselves of the powers of Section 76 of the Act of 1845, and getting on to the railway by means of sidings connected with the railway. ”

“ It will, we are convinced, prove alike beneficial to shareholders, and to the material interests of the country.
The Board of Trade did not obtain returns of rolling stock from the companies until the year 1860. On the 31st December of that year they possessed 5,801 locomotive engines. By the 31st December, 1865, they had gradually increased to 7,414. The proportions have invariably been a little more than one engine for each two miles of railway open. On the London and North-Western, as already stated, the proportion [46] is a little more than one engine a mile. ”

“ The increase in industrials was mostly in stock, the figures being $259,416,250. Formerly industrials were unable to market stock in competition with the railways, but this year they have been able to place between three and four times as much as the railways. ”

“ There are those who regard railway shareholders as "capitalists," and consider that the keeping of railway dividends at a low level, together with any depreciation in the value of railway stock that may result therefrom, are matters only likely to affect a comparatively few wealthy men, and not, therefore, of material concern to the country so long as the railways give the best possible service at the lowest possible rates. ”

“ A stimulus was thus given to the projection of farther lines, the shares in most of which came out at a premium, and became the subject of immediate traffic. A reckless spirit of gambling set in, which completely changed the character and objects of railway enterprise. The public outside the Stock Exchange became also infected, and many persons utterly ignorant of railways, but hungering and thirsting after premiums, rushed eagerly into the vortex. They applied for allotments, and subscribed for shares in lines, of the engineering character or probable traffic of which they knew nothing. ”

“ No one can possibly be more interested in the prosperity of the railroads than the railroad employes. From every dollar earned by the railroad forty-two cents go directly to pay wages of railway employes, while only twenty-one cents, or one-half that amount, go to pay interest and dividends. In no other country in the world does the railroad employe get so large a share and the security holder so little. Why should not the man who invests his money in railroad stock receive as much return in shape of dividends as the man who invests his in a farm or factory? ”

“ Perhaps this is offset by the claims save for missing the market with delayed stock. Is it not a sad commentary to think that legislation is necessary to make us do what is for our own best interests?
There can be no doubt that for a heavy and regular movement of low grade commodities on two or four track roads the big train is logical and economical. Most of the prairie roads are single track. Most of the distances between the prairie cities are relatively long. Stock, perishable freight and merchandise must have rapid movement. ”

“ It is doubtful whether the aggregate plant used in all manufacturing industries can equal it in value. The capital engaged in banking is but a trifle beside it. The world's whole stock of money of every kind—gold, silver, and paper—would purchase only a third of its railroads.
Yet these facts by no means measure the whole importance of the railroad in the modern industrial system. The business methods of to-day are in one sense the direct result of improved means of transportation. The railroad enables the large establishment to reach the markets of the world with its products ”

“ Have we not overdone the matter of low working stocks? Is is not more expensive for a railroad to carry too small a working stock of material and supplies than one too large? Is not the problem too extensive to warrant very rigid comparisons as between different roads? ”

“ Other testimony shows that locomotive shops and car builders are putting out not more than half of their capacity; that the supply trade is receiving no new orders. Never, since the beginnings of the American railway industry, has the American and foreign investor been so reluctant to supply necessary capital, or so doubtful of the future of railway enterprises. ”

“ It is a monopoly which not only extorts millions upon millions every year from the people, but which enables railroad companies, through their intimate business and financial relations with the express companies, to conceal a very considerable part of their earnings. The express companies are large holders of one another’s stock, and also of railway stock; in turn, the men who control the great railway combinations [92] are themselves big owners of express-company stocks and bonds. The express companies lease from the railroads the right to transport freight over the railroad lines. ”

“ The results of the working of railways have been in many respects different from those anticipated by their projectors. One of the most unexpected has been the growth of an immense passenger-traffic. The Stockton and Darlington line was projected as a coal line only, and the Liverpool and Manchester as a merchandise line. Passengers were not taken into account as a source of revenue; for, at the time of their projection, it was not believed that people would trust themselves to be drawn upon a railway by an "explosive machine," as the locomotive was described to be. ”

“ As regards some stocks, there will be no need to make a special study of causes which affect the dividend; but this is not the case with railway stocks. A speculator in railway stocks must watch the course of trade, the colonial produce, the Manchester and Liverpool markets, and note the character of the business doing in the great staples of Industry. Upon the profitable nature of these trades depend very much the traffic receipts of railways. ”

“ As for the railway, whereas prior to John Harley's introduction as shareholder and director it could get no consideration in the way of freights from those giant corporations which have to do with beef and sugar and oil—it being both slow and crooked as a railroad—thereafter it was given all it could haul at rates even with the best, and its prosperity became such that fifty-five points were added to the quoted value of its stock. ”

“ Along such lines there always had been large traffic, and it was no doubt greatly stimulated by the facilities which the new mode of locomotion afforded for its expansion. But as fresh railways were completed, and as the capital invested in them increased, the profits receded. Even at the present time, with larger receipts per mile than have ever been taken, the position of railway investment is almost from every point of view, unsatisfactory. ”

“ The most important single factor in the production of increasing returns upon a railroad is the density of traffic; that is to say, the amount of business which can be conducted with a given set of rails, terminals and rolling stock. In other words, it is the degree of effective utilization of the plant and equipment. It is too obvious to need demonstration, after what has been set forth concerning the nature of railroad expenditures, that economy of operation and, consequently, profits are more or less directly dependent upon this fact. ”

“ Numerous over-capitalized and badly managed railways have gone into bankruptcy, and either are in the hands of receivers or have emerged from such guardianship, and are painfully toiling along on the road to prosperity on the twin crutches of assessments upon stockholders and the withholding of dividends from the same long-suffering and patient class.
The transactions at the stock exchange at present average about two hundred thousand shares a day, exclusive of bonds, government, State, and railway ”

“ The same and still larger economies in working could be effected under private enterprise if competition were abandoned in favor of universal combination or monopoly. The whole question depends on the waste of competition. Each railway company works for its own route. The result is that unnecessary train mileage is run, and train loads are lessened. The secret of success, the foundation of all economy in railway working, lies in securing the largest possible train loads. ”

“ The deduction of 5 per cent. from salaries is too high, and the contributions of the shareholders and of the Government should commence at a much earlier step in the scale of net earnings.
The rolling stock provided for Indian railways is miserably insufficient. The number of locomotives possessed by all the companies on the 1st of January, 1867, was only 795, not quite one engine for every five miles. The other descriptions of plant are equally defective in point of numbers. ”

“ But the primary cost of railways is only one element of calculation as respects the chances of profit: another large item is the expense of working. It is now discovered that a railway cannot be worked, to be at all efficient, under the present heavy locomotive system, at a less cost than L.700 per mile per annum. 'Several branch lines owned by wealthy companies,' says Herapath, 'do not receive more than L.500 per mile per annum, while the expense of working them cannot be less than L.700 per mile per annum. ”

“ One year they are operating ratio, another, train load, and later on, net earnings. In no storehouse do material things deteriorate to scrap value faster than does the intangible, indeterminate stock article, results. No, I am not a pessimist; I still see the ring of the doughnut on the lunch counter. But I do object to being fed on birds from year before last's nests. I believe the railways hatch out better results every year, but I also feel that improvement should and can be made even faster. It is largely a breeding problem. ”

“ It should be observed that competition among railway companies has not the same safeguard as competition in trade. Persons will ordinarily do business only when they see a fair chance of profit, and if press of competition renders a particular trade unprofitable, those engaged in that trade will suspend or reduce their operations, and apply their capital or labor to other uses until a reasonable margin of profit is reached. But the capital invested in the construction of a railway cannot be withdrawn when competition renders the operation of the road unprofitable. ”