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The number of persons in the employment of the railways of the United States, as reported for June 30, 1902, was 1,189,315, or an average of 594 employees per 100 miles of line. As compared with June 30, 1901, the number of employees increased 118,146, or 46 per 100 miles of line. The classification of these employees shows that 48,318 were enginemen, 50,651 firemen, 35,070 conductors, and 91,383 other trainmen. There were 50,489 switch tenders, crossing tenders, and watchmen. Disregarding 1,982 employees not assigned to the four general divisions of employment, it appears that the services of 41,071 employees were required for general administration, 399,592 for maintenance of way and structures, 228,280 for maintenance of equipment, and 518,390 for conducting transportation.
The report continues the statement of the average daily compensation of the 18 classes of employees for a series of years beginning with 1892, and also another giving the total compensation paid to more than 99 per cent of the railway employees for the fiscal years 1895 to 1902. The amount thus shown as paid in salaries and wages to employees during the year ending June 30, 1902, was $676,028,592, which was $65,314,891 in excess of what was paid during 1901. The compensation of the railway employees for 1902 is equivalent to 60.56 per cent of the operating expenses of the railway companies and 39.16 per cent of their gross earnings.
CAPITALIZATION OF RAILWAY PROPERTY.
The word capital has no very definite and precise meaning. Especially is this true in the nomenclature of statistics. As used in this report, railway capital means stocks and bonds and such other securities as may be issued. Current liabilities and other obligations not represented by negotiable paper are excluded from railway capital.
The amount of railway capital outstanding on June 30, 1902, was $12,134,182,964. This amount on a mileage basis represents a capitalization of $62,301 per mile of line. Of the total capital stated, $6,024,201,295 existed in the form of stock, of which $4,722,056,120 was common stock and $1,302,145,175 preferred stock. The amount which existed in the form of funded debt was $6,109,981,669. This amount comprised the following items: Mortgage bonds, $5,213,421,911; miscellaneous obligations, $564,794,588; income bonds, $242,556,745, and equipment trust obligations, $89,208,425. The amount of current liabilities, which is not included in the foregoing figures, was $648,176,194, or $3,328 per mile of line.
The amount of capital stock paying no dividends was $2,686,556,614, or 44.60 per cent of the total amount outstanding. Omitting equipment trust obligations, the amount of debt which paid no interest was $294,175,243. Of the stock paying dividends, 8.36 per cent of the total amount outstanding paid from 1 to 4 per cent, 13.48 per cent paid from 4 to 5 per cent, 10.24 per cent paid from 5 to 6 per cent, 12.78 per cent paid from 6 to 7 per cent, and 5.54 per cent paid from 7 to 8
cent. The amount of dividends declared during the year was $185,391,655, which is equivalent to a dividend of 5.55 per cent on the amount of stock on which some dividend was declared. The amount of dividends declared in 1901 was $156,735,784. The amount of mortgage bonds paying no interest was $181,485,951, or 3.48 per cent; of miscellaneous obligations, $37,111,220, or 6.57 per cent, and of income bonds, $75,578,072, or 31.15 per cent.
PUBLIC SERVICE OF RAILWAYS.
The number of passengers carried during the year ending June 30, 1902, as shown by the annual reports of railways, was 649,878,505, showing an increase for the year of 42,600,384. The number of passengers carried 1 mile—that is, passenger mileage—was 19,689,937,620, there being an increase in this item of 2,336,349,176. Density of traffic is determined by assigning passenger mileage and ton mileage to a mileage basis. There was an increase in the density of passenger traffic, as the number of passengers carried 1 mile per mile of line in 1902 was 99,314, and in 1901, 89, 721.
The number of tons of freight carried during the year was 1,200,315,787, an increase of 111,089,347 being shown. The number of tons of freight carried 1 mile—that is, ton mileage—was 157,289,370,053. The increase in the number of tons carried 1 mile was 10,212,234,013. The number of tons carried 1 mile per mile of line was 793,351. These figures show an increase in the density of freight traffic of 32,937 tons carried 1 mile per mile of line.
The average revenue per passenger per mile for the year ending June 30, 1902, was 1.986 cents. For the preceding year it was 2.013 cents. The revenue per ton of freight per mile was 0.757 cent, while for 1901 it was 0.750 cent. An increase in earnings per train mile appears both for passenger and freight trains. The average cost of running a train 1 mile also increased. The percentage of operating expenses to earnings was 64.66 per cent.
The report contains a summary of freight traffic analyzed on the basis of a commodity classification, and also a summary indicating in some degree the localization of the origin of railway freight by groups of commodities. There is, too, a summary showing separately the mileage of loaded and empty freight cars as returned for 1902.
EARNINGS AND EXPENSES.
For the year ending June 30, 1902, the gross earnings from the operation of the railways in the United States, arising from the operation of 200,154.56 miles of line, were $1,726,380,267, being $137,854,230 more than for 1901. The operating expenses were $1,116,248,747, having increased in comparison with the year preceding $85,851,477. Gross earnings in detail were as follows: Passenger revenue, $392,963,248— increase, as compared with preceding year, $41,606,983; mail, $39,835,844—increase, $1,382,242; express, $34,253,459—increase, $3,131,846; other earnings from passenger service, $8,858,769-increase, $655,787; freight revenue, $1,207,228,845—increase, $88,685,831; other earnings from freight service, $4,846,718-increase, $781,261; other earnings from operation, including unclassified items, $38,393,384increase, $1,610,280. Gross earnings from operation per mile of line were $502 more than for the year ending June 30, 1901, being $8,625.
The operating expenses of the railways already stated were distributed among the four general divisions as follows: Maintenance of way and structures, $248,381,594—increase, $17,324,992; maintenance of equipment, $213,380,644-increase, $23,081,084; conducting transportation, $609,961,695—increase, $44,695,906; general expenses, $44,197,880—increase, $1,631,327; undistributed, $326,934. The operating expenses amounted to $5,577 per mile of line, or $308 more than for the year immediately preceding. An analysis of the operating expenses for the year in accordance with the 53 accounts embraced in the official classification of such expenses is included in the report, with a statement of the percentage of each item of the classified expenses for the years 1896 to 1902.
The income from operation, or the amount representing the difference between gross earnings and operating expenses, commonly termed net earnings, was $610,131,520, this item showing an increase as compared with the previous year of $52,002,753. The average amount of net earnings per mile of line for the year ending June 30, 1902, was $3,048, and for 1901, $2,854. The amount of income received from sources other than operation was $196,323,629. Included in this amount are the following items: Income from lease of road, $110,924,621; dividends on stocks owned, $34,982,212; interest on bonds owned, $17,280,238, and miscellaneous income, $33,136,558. The total income of the railways, $806,455,149—that is, the income from operation, increased by income from other sources—is the item from which fixed charges and analogous items are deducted in order to ascertain the amount available for dividends. The total deductions of this character amounted to $526,178,822, leaving $280,276,327 as the net income for the year available for dividends or surplus.
The amount of dividends declared during the year (including $29,584 other payments from net income) was $185,421,239, leaving as the surplus from the operations of the year ending June 30, 1902, $94,855,088. The surplus for the year 1901 was $84,764,782. In the amount stated for deductions from income, $526,178,822, are embraced the following items: Salaries and maintenance of organization, $527,038; interest accrued on funded debt, $274,421,855; interest on current liabilities, $7,717,103; rents paid for lease of road, $111,697,122; taxes,$54,465,437; permanent improvements charged to income account, $34,712.968; other deductions, $42,637,299.
H. Doc. 253-8
The present report includes a summary in which the taxes paid to the several States are assigned per mile of line; and an analysis of the taxes by States, showing the basis of payments according to the laws under which railways are taxed, is also given.
It should be understood that the above figures relating to the income and expenditures of railways are compiled from the annual reports made to the Commission by two classes of railway corporations. Operating reports are filled by such companies as maintain full operating accounts, and financial reports by such companies as have leased their property to others for operation, their own income, aside from that derived from investments, being the annual fixed or contingent rental paid to them by their lessees, from which they make their own disbursements. Certain items of income and expenditure, therefore, are necessarily duplicated in comprehensive summaries which are compiled from reports of both classes. The source and extent of such duplications are plainly indicated in the report.
There is here inserted a summary designed to present an income account of the railways in the United States considered as a systemthat is to say, a statement of earnings and expenses as they would appear were all the railways owned by the Government or by a single corporation. In this statement all duplications, either on the side of earnings or of expenses which arise on account of intercorporate payments, are excluded. Comparative income account of the railways of the United States, considered as a system, for
the years ending June 30, 1902 and 1901.
Gross earnings from
operation... Clear income from in
$1,726, 380, 267
33, 488, 648
$1, 769, 447, 408
and income Operating expenses Salaries and mainte
nance of leased lines..
1, 116, 248, 747
147, 432, 723 85, 851, 477
1, 116,775, 785
1,030, 929, 569
85, 846, 216
652, 671, 623
Net earnings and
income Net interest on funded
debt.. Interest on current lia
260, 295, 847
252, 594, 808
7,717, 103 54, 465, 437
5,526,572 50, 944, 372
61,586,507 7, 701, 039 2,190, 531 3,521, 065 13, 412, 635
Available for dividends,
adjustments, and im-
330, 193, 236
48,173, 872 25,588, 708
Available for ad
2 172, 977,856
2 150, 392, 692
2 This amount includes permanent improvements charged to income, miscellaneous deductions, and surplus.
The number of railways in the hands of receivers on June 30, 1902, it appears, was 27, showing a net decrease of 18 as compared with the fiscal year 1901. The number of railways placed in the charge of receivers during 1902 was 4, and the number of railways taken from the management of receivers was 22. The roads under receivers operated 1,475.32 miles of line, of which 1,161.66 miles were owned by them.
Of the roads managed by receivers, 1 had an operated mileage in excess of 300 miles, 3 between 100 and 300 miles, and 19 less than 100 miles. As nearly as ascertainable the capital stock represented by the railways in the charge of receivers on June 30, 1902, was $18,267,677, funded debt $25,156,977, and current liabilities $4.746,399. These figures show a decrease in capital stock represented, as compared with 1901, of $31,210,580, and in funded debt of $29,591,685.
RAILWAYS IN THE UNITED STATES IN 1902.
In the course of the past year three of the five portions of the general report which the Commission is preparing, entitled “Railways in the United States in 1902,” bave been printed, and a brief synopsis of each of these follows under its specific title.
PART II. -A FORTY-YEAR REVIEW OF CHANGES IN FREIGHT TARIFFS.
This report on changes in transportation rates on freight throughout the United States does not pretend to originality either in form or in the data which it presents. It is rather a revised second edition of the report prepared for the Senate Committee on Finance and presented by that committee in 1893 as a part of its report on “Wholesale prices, wages, and transportation.” The extension of the tables from 1893 to 1902 is compiled from the tariffs which the railways have filed with the Commission in conformity with section 6 of the act to regulate commerce.
The facts presented in the report are grouped under these three general headings: (1) Development of freight classifications, (2) changes in competitive rates, and (3) changes in local rates.
In connection with the text relating to these subjects, a large number of tables are presented, each of which shows the changes from the earliest date from which it was practicable to obtain a complete record of freight charges.
DEVELOPMENT OF FREIGHT CLASSIFICATIONS.
The freight traffic of the railways of the United States is carried under two general classes of schedules, commonly known as “class tariffs” and “commodity tariffs.” The latter has reference to schedules applicable to such articles as grain, lumber, coal, live stock, dressed