killed was 5,498; injured, 7,209. These figures include casualties to persons classed as trespassers, of whom 4,601 were killed and 4,858 were injured. The total number of casualties to persons other than employees from being struck by trains, locomotives, or cars were 4,135 killed and 3,995 injured. Casualties of this class occurred as follows: At highway crossings, passengers killed, 3, injured, 11; other persons killed, 828, injured, 1,343; at stations, passengers killed, 21, injured, 344; other persons killed, 378, injured, 553; and at other points along track, passengers killed, 6, injured, 27; other persons killed, 2,899, injured, 1,717. The summaries giving the ratio of casualties show that 1 out of every 400 employees was killed, and 1 out of every 26 employees was injured. With reference to trainmen, including in this term enginemen, firemen, conductors, and other trainmen, it is shown that 1 was killed for every 136 employed and 1 was injured for every 13 employed. One passenger was killed for every 2,153,469 carried and 1 injured for every 121,748 carried. Ratios based upon the number of miles traveled, however, show that 61,537,548 passenger-miles were accomplished for each passenger killed and 3,479,067 passenger-miles accomplished for each passenger injured. The corresponding figure in these latter ratios for the year ending June 30, 1900, were 64,413,684, and 3,885,418 passenger-miles for each passenger killed and each passenger injured, respectively.

PRELIMINARY REPORT, ON THE INCOME AND EXPENDITURES OF RAILWAYS FOR THE YEAR ENDING JUNE 30, 1902.

To present concisely the results of the operations of the railways in the United States, a preliminary report on the income account of operating lines is annually published by the Commission, this report being prepared by its statistician in advance of the full report on railway statistics.

For the fiscal year ending June 30, 1902, this preliminary report includes returns for 663 operating roads. received by November 15. The railway mileage represented by these returns was 195,385.53 miles, or probably 98 per cent of the mileage for which returns will be embraced in the final report when issued.

The following abstract from the preliminary report gives the more important items shown therein:

The gross earnings of the railways for the year ending June 30, 1902, on the mileage stated above, were $1,711,754,200. For the year ending June 30, 1901, the gross earnings on 195,561.92 miles of line, as shown in the final report of that year, were $1,588,526,037. These amounts indicate a probable increase in the gross earnings of the railways of the United States during the year 1902 in excess of $125,000,000. Referring to earnings in detail, it is noted that earnings from the passenger service amounted to $472,429,165, or 27.60 per cent of

the total gross earnings; earnings from the freight service amounted to $1,200,884,603, or 70.16 per cent of the total earnings. In total earnings are included also $38,440,432, representing various minor items incidental to operation.

The average of gross earnings per mile of line, as shown by this preliminary report, was $8,761. This amount is $638 greater than the average given in the final report for the year ending June 30, 1901, the average for that year being $8,123, and this, it may be remarked, was considerably in excess of the average for any preceding year for which statistical reports have been published by the Interstate Commerce Commission. The earnings per mile of line for the last fiscal year properly credited to the passenger service were $2,418; the earnings per mile of line credited to the freight service were $6,146. It should be said that some or all of the averages based on the figures compiled in this advance report may be slightly diminished when the final report is made on account of the effect of the inclusion of returns for a number of roads which earn relatively small amounts per mile of line.

The aggregate of operating expenses for the year covered by this preliminary report was $1,106,137,405. This represents an expenditure of $5,661 per mile of line, being an increase of $392 per mile as compared with the previous year. The ratio of operating expenses to earnings, 64.62 per cent, is smaller than it was for 1901, when it was 64.86 per cent. This ratio will not be greatly altered as the result of complete compilation.

The net earnings, or income from operation, of the railways included in this report were $605,616,795. Comparison of this amount with the corresponding item of the previous year shows an increase of $51,395,421. The net earnings per mile of line, as shown by this preliminary report, were $3,100, which exceeds the net earnings per mile of line for the previous year by $246.

The operating railways, to which this advance report pertains, received $82,714,492 from sources not directly connected with operation, such as investments in stocks and bonds of railway and other corporations and from miscellaneous sources. This amount, combined with the net earnings stated, makes a total of $688,331,287, being the sum at the disposal of the railways for corporate expenditures and surplus. To obtain the surplus which remains from the operations of the year, the following items must be deducted: Interest on funded debt accrued, rents of leased lines, permanent improvements charged to income, taxes (which were $49,426,675), dividends, and certain other expenditures miscellaneous in character. The aggregate of these deductions amounts to $609,145,920, from which it appears that the surplus remaining from the operations of the year ending June 30, 1902, was $79,185,367. The surplus for the preceding year was $84,764,782. In the report for the year ending June 30, 1897, a deficit is shown of $6,120,483.

The dividends declared during the year covered by this report amounted to $150,685,959. The dividends of corresponding roads for the year ending June 30, 1901, disregarding unimportant exceptions, were $120,851,269, from which it appears that the returns to the stockholders of the roads in question were nearly $30,000,000 greater than in the year before. It may be proper to repeat what has been explained in previous reports, that the amount of dividends stated in these preliminary reports, which are compiled from the reports of operating roads only, does not represent the entire amount of dividends declared on the stocks of all the railway companies in the United States, for the reason that the dividends declared by such companies as have leased their property to others for operation are paid from their own income, which is, apart from the small portion derived from investments, essentially the fixed or contingent rental paid to them by their lessees, and consequently the dividends of subsidiary leased lines can not be included in reports that relate to operating lines only. As an aid in estimating the amount of dividends which will be shown in the final compilation, it may be remarked that, out of an aggregate of $156,735,784 paid in dividends during the year ending June 30, 1901, something in excess of $35,000,000 was distributed to stockholders through the agency of leased lines.

PER DIEM RATES FOR CAR SERVICE.

By the action of the American Railway Association last April the interchange of freight cars between the different railroads of the country has for the first time been put on a business basis, a change which appears to be a definite reform and in the interest of efficient service and upright dealing between carriers. Ever since cars began to be sent from one railroad to another payment for the borrowed service has been made by the mile, and abuses have been frequent. The owner of the car was powerless either to get his car returned or to test the accuracy of the records by which he was paid for its use, so that cars were often kept out of his possession for months, being used by the consignees as free storehouses for freight, or by the borrowing railroad company in local service at an unreasonably low rental, or, as has occurred in consequence of errors in the accounts, without any rental at all. In a few cases lenders have been defrauded on a large scale by deliberate dishonesty. The interchange of standardgauge house or box freight cars is now almost wholly unrestricted throughout the United States, so that convenient arrangements for records and payments are a necessity. Every road is a constant borrower from and lender to its immediate connections, and frequently from and to lines in distant States.

The reform consists in the adoption of a rule to pay by the day instead of by the mile. The owner can himself keep an account of the

number of days a car is absent from the home line-thus insuring accuracy; while the fact that a borrowed car must be paid for at the same rate when standing idle as when used in profitable service spurs the borrower to promptly return it when it has completed the service for which it was borrowed. The old plan put a premium on dilatory return, while the new plan puts a premium on prompt return. A secondary but important result, and one which directly affects the public, is the increased efficiency of the demurrage bureaus in the principal cities. These bureaus, supported by the railroads jointly, supervise the collection from consignees of a storage charge of $1 a day for each car on bulk freight not taken out of the cars within a prescribed time-48, 72, or 96 hours-and thus have reduced delays; but until the per diem principle was applied between railroads, as well as between the railroad and the customer, the demurrage rule was often too lax for the best results. A "favor" to a customer in this matter might be equivalent to a reduction of the transportation rate, and the rival interests of competing carriers led to many irregularities.

The interchange per diem rate is 20 cents per car per day. This is generally regarded as too low, but it is necessary to make a low charge in order to secure agreement among so many and so diverse interests. Even this inadequate sum is said to be higher from 30 to 50 per cent than the average income per day formerly received by the principal companies under the mileage system. The present arrangement is based on contracts for one year, to July 1, 1903, made through the secretary of the American Railway Association. Though some companies which both borrow and lend on a large scale will suffer a net loss by the adoption of the new method-unless they readjust their relations with connecting lines or advance the price to the consignee for certain switching and other services-it is confidently believed that the reform will be permanent.

The weakness of the new plan is in its rigidity. The same charge applies alike to cars of 15 tons capacity or of 50 tons, and it is the same per day for a 10-mile journey as for one of 2,000 miles; but the same weakness concerning capacity existed under the mileage plan. It is also true that under the new plan, as under the old, a borrower may unfairly retain a foreign car for local service by paying for it, and thus enjoy the use of another road's car at a ridiculously low rental; but this evil is partly met by the requirement that a higher charge ($1 a day) shall be paid after a car has been kept by the borrower more than thirty days.

PRIVATE CARS.

In the agreement to abolish mileage payments the railroads were unable to include cars owned by private parties, such as dressed-beef and fruit shippers, the coal and other mining companies, the cattle-car and oil-car companies, and the one fast-freight line which runs cars not

owned by the railroads. This failure to agree perpetuates a longstanding abuse, which has been referred to in previous annual reports of the Commission. Many of these cars, particularly refrigerator cars for fruit and for fresh meats, and live-stock cars, are used mostly for long journeys made at maximum speed, so that a mileage charge far below the average would provide a very liberal income on the amount invested in the car, while the rental actually paid on such cars is usually 7 mills a mile, or 14 mills higher than the railroad companies paid to each other under the mileage system. Thus the shipper who provides his own cars receives such large sums in mileage that the excess is substantially equivalent to a rebate on the transportation charges, and to that extent a discrimination against shippers of similar goods who do not furnish cars. Furthermore, shippers who send out many carloads from competitive points, like Kansas City and Chicago, are able to use, and by common report have used, their cars as a means of securing reductions in the transportation rate. A carrier refusing to pay the mileage which a shipper demands is threatened with the loss of the traffic; and in times of slack business the abuse has in many cases been aggravated by the sending out of cars loaded to much less than their full capacity, for the purpose of securing mileage on cars which would otherwise stand idle.

It is understood that the proposition to abolish mileage on private cars was blocked by time contracts under which certain carriers had agreed to pay mileage rates for shippers' cars. While many railroad managers frown on these contracts because of their inequitable nature, and endeavor to dissuade competing carriers from making them, others assert that in spite of the high charges which they have to pay for these special cars they are obliged to continue the arrangement because the traffic for which the cars are required is so intermittent in character that it would be still more costly for the railroad company to provide the cars itself. A railroad needing several hundred refrigerator cars for two or three months in the year, and having no use for them during the remaining nine or ten months, finds that to own the necessary supply of such cars would be very expensive. In so far as this is true the "private-car evil" may not be altogether an evil, but there still remains the question of the abolition of the abuses which we have mentioned. The magnitude of the interests involved is indicated by the statement recently made by Mr. J. W. Midgley, a competent observer, that the estimated number of private cars in use in the freight service of the country, embracing refrigerator, box, tank, stock, coal, flat, furniture, poultry, and unclassified, is 130,846-a number equal to nearly one-tenth of the total freight cars owned by the railroads. The estimated value of these cars is $84,554,750. During the year ending June 30, 1901, the carriers reporting to the Commission their payments for the use of private H. Doc. 181-6