. **t ■ l?^.?'" CORNELL UNIVERSITY LIBRARY FROM Corneri University Library HE2741 .H69 1906 North American railroads: 3 1924 030 124 543 oiin Overs <\ ^^ Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924030124543 OFFICIAL GERMAN REPORT ON AMERICAN RAILROADS SPECIAL EXPERT PRIVATE TRANSLATION NORTH AMERICAN RAILROADS Their Administration and Economic Policy BY W. HOFF " and Superior Privy Councillor F. SCHWABACH Privy Councillor The Germania Press S Beekman Street New Yo.k City V- UKMVPTvfilTY ^^ f.[,:RAPvY TRANSLATOR'S NOTE. There are three methods of translation: (i) Ver- batim, (2) Free translation. (3) Literal. The genius and the principle of forming sentences of the German and the English languages are so different that a verbatim, or word for wprd, translation is out of the question. The most favorite method of translating works of a general literary character is the paraphrastical — that is, the free translation, with latitude where the author's words are not so strictly followed as his sense. This method permits of a good and fluent style and frequently translations of this description read so smoothly that they are mistaken even by experts as original compositions. The drawback of this method consists in the fact that the translator usually substitutes his individuality for the author's. Besides, it is not adapted for scientific and tech- nical works where the principal end to be gained is an ab- solutely exact translation of the original, and where good literary style and smooth English are of secondary con- sideration. The third method is the literal — that is, translating the exact meaning of the words and following the original sentences as closely as possible, aiming at clearness and correctness, thus preserving the individuality of the author. This method we have adopted for this report. In doing this we had another difficulty to overcome. The authors have expressed in the German original their views in what is known in Germany as the bureaucratic style, a peculiar structural form of language, which mani- fests itself mainly in a cumbersome construction of an endless chain of complicated sentences, with the result that as a rule the "cart is put before the horse." Furthermore, the technical terms used were not those' of one department alone, but of all the different branches of railroading. In reducing the American money standard to the German value, the authors have figured: One dollar = 4 marks 16 pfennigs. As a rule, the dollar ig figured = 4 marks. One mark = 25 cents (one-quarter). One mark =100 pfennigs. One pfennig ==1-4 cent. One kilometer = 3,280.8 feet = 0.62137 of a mile. One kilometer = 1,000 meters. One meter = 3.2808 feet. One kilogram = one kilo = 1,000 grams. One kilogram = 2.2046 pounds avoirdupois. One German ton = 2,204 pounds avoirdupois. One liter = 1.0565 quarts = 2,113 pints. In printing we have left on each page ample space for marginal notes. THE GERMANIA PRESS. TABLE OF CONTENTS FIRST CHAPTER. Our Travels in the United States: Arrival in New York and Custom Formalities ; Traveling Prep- arations; New York Street Traffic; Harbor Facilities. .Page 17 Short Round Trip: New York, Boston, Buffalo and Niagara, Albany, New York, Labor Day Page 23 Overland Tour: Pittsburg (Carnegie Works), Chicago, especially the Stock Yards, Pullman Plant; St. Paul, Minneapolis, Yellowstone Na- tional Park, Northern Pacific Railroad, Portland (Oregon), Shasta Route, San Francisco, Southern and Missouri Pacific Railroads, Denver, Lincoln (Nebraska), Kansas City, Parsons, St. Louis (World's Fair), Pittsburg (Railroad Centre), Cleve- land (Ohio), Washington, Baltimore, Philadelphia; Return to New York ; Summary of the Tour Page 25 SECOND CHAPTER. Observations of a General Character, Especially as Regards the Traveling on Railroads: Uniformity of Buildings ; Streets, Hotels, Street Traffic Institu- tions; Electric Street Railroads; Other Mechanical Establish- ments. Equipment of the Passenger Coaches; Service; Lighting; Motion of the Cars; Rail Laying; Train Manage- ment; Speed; Schedules, Train Dispatchers; Station Manage- ment; Irregularities^ Accidents; Automatic Safety System; Restaurant Service on the Train ; Waiting Rooms ; Quick Lunch Rooms Page 61 THIRD CHAPTER. The Railroad Administration Systems and the Other More Impor- tant Relations of the Different Railroad Systems to Each Other: Railroad Groups; Financial Relations and Their Development; State and National Ownership ; Union Depots ; Terminal Com- panies; Combination of Different Departments (Passenger and Freight Traffic) ; Technical and Other Associations (The Amer- ican Railway Association, etc.) Pag* 109 FOURTH CHAPTER. The Organisation of Railroad Administrathns : General Meeting; Board of Directors; Division of the Central Administration ; Departments ; Districts ; Administration Build- ings, Offices, Quarters ; Business Transactions of the Offices and Accounts; Mechanical Devices for and in the Internal Admin- istration ■ Page 139 FIFTH CHAPTER. Officers and Mechanics: General Positions ; Common Rules for Officers and Employees ; Employment and Service ; Salaries and Wages ; Working Time and Rest Pauses; Disciplinary Measures; Clubs and Trade Unions ; Total Number of Employees Page 179 SIXTH CHAPTER. Institutions for the General Welfare of the Railroad Employees: Social Political Views in General and Especially as Regards the Rairoads ; Sick Funds ; Pension Funds ; Savings and Loan So- cieties; Hospitals; Railroad Physicians; Libraries; Profit Sharing of the Employees; Young Men's Christian Associa- tion Page 213 Addenda: Lecture Delivered by the Privy Sanitary Councillor, Dr. Schwechten, as Regards the Railroad Physicians and Railroad Hygiene, at the Berlin Society of Railroad Physicians, April 7, 1905 Page 232 SEVENTH CHAPTER. Passenger and Baggage Traffic: Fares for Passengers ; Scalpers ; Details of the Passenger Traf- fic ; Tickets ; Time Tables ; Tours in Booklets ; Sale of Tickets ; Ticket Control ; Accounts and Accounting ; Handling of the Bag- gage Page 243 EIGHTH CHAPTER. Freight Traffic: Rates ; Statistical Average Freight Rate ; Rate Rebating ; Rate Charges for the Use of Private Freight Cars ; Bills of Lading ; Accounts and Accounting; Carloads; Use of Freight Cars. Page 269 Appendix: Mineral, Cotton and Milk Transportation Page 322 NINTH CHAPTER. The Relations of the Railroads of the United States to the Post Office Administration, to the Pullman Company and to the Express and Telegraph Administrations: Railroad Post Office Administration; Pullman Company; Ex- press and Telegraph Companies Page 341 TENTH CHAPTER. Budget and Finance: 1. Budget, Yearly Estimate; Economic Control; Separable Ac- counts for the Passenger and the Freight Traffic; Purchases of Supplies and Control. 2. Finance : Financial Policy in General ; Receipts and Expendi- tures; Ratio; Capital; Interest and Dividends; Surplus. Page 359 ELEVENTH CHAPTER. State Supervision of Railroads: State Control and Supervision ; The Interstate Commerce Com- mission in Washington Page 395 TWELFTH CHAPTER. Summary and General Observations: Summary: Duties and Performances of the American Rail- roads; Construction and Administration; Financial Devel- opment and Situation; Relation to the Public Weal; General Remarks Page 411 EXPLANATION The German method of punctuating decimals is by comma and the English (American) by periods. The punctuation should consequently be on page ay in the fourth and fifth lines from the top: 3.886x4.267 meters and 1.825 "meters x 2.286 meters. In the table on page 86 and 87 the kilometer decimals should be punctuated by periods instead of by commas. They should read: 714.4, 707.2, 861. i, 868.9, 53^-9y 559-5. 538-9, 559.5. 582.5, 585-3. 582-5. 585-3, 590-2,654.8, 725-7. 702.1, 654.8, 725.7, 702.1, and in the "Notice" on page 86, 87.6 and 81.6 km. On pages 106 and 107 in the percentage calculation of the tables the punctuation should be by periods instead of by commas. It should be: Percentage of accidents in a million of passengers . . Percentage of accidents per thousand employes . . . Percentage on each million of kilometers Ool 2.75 ^ 6.43 11.84 45.45 50.01 , 0.08 0.90 ^ 1.70 0.41 1.83 3.38 56 25 44 92 5.10 Exclusive of suicides , 2.19 1 3.42 , On 100 Kilometer* . . 5.61 Including suicides 5.37 Exclusive of suicides 5.90 Including suicides ERRATA On page 208 in table the heading "North American Railroad" should be the plural "North American Railroads." On page 210 the twelfth line from the bottom should read: "sia-Hesse, 105.3 men per 100 kilometers track length) is" FIRST CHAPTER. Our Travels in the United States. Arrival in New York and Custom Formalities. — Preparations for the Journey. — New York : Street Traffic, Harbor Appointments. — Short Round Trip : New York, Boston, Buffalo and Niagara, Albany, New York.— Labor Day.— Overland Tour Through the American Continent: Pittsburg (Carnegie Works), Chicago (Stockyards, Pullman Plant), St. Paul and Minneapolis, Yellow- stone National Park, Northern Pacific Railroad, Portland (Ore- gon), Shasta Route, San Francisco, Southern and Union Pacific Railroads, Denver, Lincoln (Nebraska), Kansas City, Parsons, St. Louis (Louisiana Purchase Exposition), Pittsburg (Rail- road Works), Cleveland (Ohio), Washington, Baltimore, Phil- adelphia. — Return to New York. — Itinerary. After a voyage of seven days we reached the coast of the United States. The entrance to the harbor of New York produces a grand impression. Strangely contrast- ing with it is the annoying and altogether tedious treat- ment of all that pertains to the customs formalities. The ship stopped for a short time in view of the Statue of Liberty to take on board a number of customs officials, who seated themselves at the end of the long tables in the din- ing-room, while the passengers grouped themselves, as far as they could, around them, to be scrutinized singly. Every passenger was, at the same time, handed a booklet containing in English the American customs regulations. The astonishment which this procedure, to which we were entirely unaccustomed, excited in us was increased by the fact that every traveler had to give under oath a written assurance that his dutiable belongings, as far as 17 he carried them along, did not exceed a certain value. To comply with this formality we were obliged, although by no means the last ones, to wait for more than an hour. At last our turn came, and to our joy the customs ofificial contented himself to ask us, as foreigners, whether we car- ried any presents with us. Both of us at once agreed that we had here witnessed a procedure which is unparalleled in the light of our Old World ideas. Although the high American import tariff may have temptations enough for smuggling, so that a strict control may altogether be justified, we are still of the opinion that such treatment of honest people would be un- heard of in Europe — nay, it would evoke, particularly in Germany, where sensitiveness is so pronounced in such matters, a storm of indignation. He who believed that, after this highly disagreeable inquisition, matters were straightened out was sorely mis- taken. After landing in New York every piece of bag- gage was opened and searched, and not even did we ourselves escape this procedure, although we displayed per- sonal letters of recommendation from the American am- bassador in Berlin. That we were not delayed for hours we owed solely to the mediation of a prominent German, who made the official understand, in a rather impressive manner, that we desired a speedy release. Thus it happened that, although our ship had arrived at New York before six o'clock in the morning, we could not leave the pier of the Hamburg- American Line at Hoboken until eleven o'clock. A cab, not unlike the Berlin Droschke of the second class, took us to the ferry over the Hudson River and from the landing in New York to our hotel, the latter distance being hardly a quarter of an hour. For our i8 transportation and that of part of the baggage we paid the hackman $5.50, and later on $1.00 for every additional piece of luggage. Were the impressions which we re- ceived at our entrance into the New World anything but elating, we were also to be sorely disappointed in regard to the outward appearance of the city, especially in so far as the paving of the streets and cleanliness is concerned. However, it appears to us unjust now, after having trav- ersed the United States from east to west, to judge a coun- try by such details, or, rather, outside appearances. TRAVELING PREPARATIONS. Originally it was our plan to confine our study of American railroads to a few centres of systems and ad- ministrations, and to visit but a comparatively small area of the country; yet later considerations prevailed upon us to extend our investigations over the whole transcontinen- tal territory of the United States. In the first place, we found it advisable to combine with the study of the rail- ways that of the land and its people. Furthermore, the in- timate relations existing between all the portions of the land seemed to call for a thorough and extensive study of its various sections. To be sure, we might have re- stricted ourselves to the Eastern States, yet, since they have frequently been made the subject of minute expert inspec- tion, especially as regards their railway system, we could not resist the temptation to investigate a less-known por- tion — one which has, in a certain sense, remained a "dark territory." The first days of our stay in New York we devoted to getting acquainted with its charming environments, both on land and on sea. We were personally introduced to 19 men prominently identified with railways, such as Mr. E. H. Harriman, president of one of the largest systems, which comprises the Southern Pacific, Union Pacific, Ore- gon Short Line and Oregon R. R. and Navigation Co., with a total mileage of 15,281 miles. We also had remark- able interviews with Mr. James J. Hill, president of the Great Northern Co. (mileage, 5,980), and with Mr. Frank A. Vanderlip, formerly Assistant Secretary of State, in the Department of the Interior, in Washington, and the well-known author of a book entitled "America's Invasion of European Industrial Spheres." By virtue of personal relations we had an opportunity to discuss the plans for our inspections with a prominent German-Ameri- can, who, as head of one of the most influential American banking houses, is thoroughly familiar with the financial operations of the American railway corporations. We had, moreover, interviews with some New York financiers, several of them being directors of important railway com- panies. Of particular value to us was a long discussion with Mr. Buenz, German Consul-General in New York. On these occasions our attention was directed not only to the American system of traffic and transportation, but also to the problems of the industrial life and the labor ques- tions. Our further stay in New York served to enlighten us on its transit facilities. NEW YORK STREET TRAFFIC. New York's street railways are still of equal impor- tance with its elevated railroads. How far the subway — on which, after our return from the Western States, we made the official trip with the president and the directors of the company a day before its opening — will afifect this 20 situation may not be conjectured at the present time; it depends, to a large degree, on its contemplated extension. At any rate, inasmuch as the increase in passenger traffic on the old street railways amounted to but 144,300 passengers during the last year, while the elevated roads gained no less than 37,000,000, it may be taken for granted that the trolley cars have nearly outlived their usefulness. They are for the most part operated by electricity, but there are also horse car lines still in operation. The speed of the cars is very great, the stops are jerky, so that a stranger will at first find difficulty in accustoming him- self to it; to this condition the ladies in particular show a remarkable adaptability. The fare is 5 cents. The elevated roads have substituted electricity for steam power. Doubtless the elevated has to handle an enormous traffic. Trains run on close headway, and at cer- tain times of the day the cars are overcrowded. The sta- tions are, in comparison to the immense traffic, exceedingly primitive ; the halls and platforms are mostly made of wood. Frequently passengers are not permitted to leave a train at its rear end, because this end of the train does not reach the station platform. In this case they must move ahead, and all this is taken in America as a matter of course, without anybody making a complaint. The fare on the elevated is 5 cents for any distance, and the ticket is deposited in a glass box in charge of an employee at the entrance to the station platform. The enormous traffic of the surface and elevated roads necessitated the construction of the subway, or, rather, a sub-pavement way. It is built on a grand scale, crosses the whole island of Manhattan from south to north, and is equipped with four tracks, two for local and two for 21 express trains, the latter running with a speed of twenty miles an hour by skipping numerous local stations. The stations are very spacious in contrast to those of the ele- vated. Something must also be said about the tremendous traffic carried on by the ferries between New York and Ho- boken, across the Hudson. While the Harlem River is spanned by several bridges, and communication between New York and Brooklyn consumes but little time, the crossing of the wide Hudson takes up quite some time. The American — almost without exception — occupies him- self during this time with the reading of the newspapers, and resigns himself good-naturedly to the inevitable. The transportation of railroad freight across the Hudson by means of specially constructed ferry-boats — a tug between two barges, each of which is supplied with a double track — is very cumbersome. To obtain the speedy delivery of shipments the Pennsylvania Railroad is building a tunnel under the Hudson River, which will afford an easy con- nection by rail between New Jersey and New York. While a round trip on an automobile omnibus through New York City is fatiguing by reason of its slow move- ment, and also produces ennui on account of the monoto- nous uniformity of the buildings in the streets outside of the business section of the city, our trip around the city by steamboat was highly enjoyable, particularly as it per- mitted us to view and survey the wonderful shipping facili- ties of New York's harbor. Again we had occasion to in- spect the docks of the Hamburg- American Line, and of the North-German Lloyd, in Hoboken. Superior as they are to those of other companies on the New York side, it is to be regretted that communication from and to the Ger- 22 man ships, across the broad Hudson River, is a great deal more uncomfortable than that with the other lines. To transfer the docks of the German companies to the New York side is now almost out of the question, since the pur- chase price of the necessary real estate is entirely prohib- itive. After we had closely inspected the stations of the New York Central and Hudson River Railroad, as well as those of the Pennsylvania Railroad in Jersey City, and also observed the immense traffic on the old Brooklyn Bridge (60,000,000 people pass over it annually — ^viz., 50,000,000 in cars and 10,000,000 on foot), we made an excursion to the villa of a friend living up the Hudson, who gave us much valuable information as to suburban traffic in and near New York. SHORT ROUND TRIP. Soon after, we started on our first journey to Boston, Buffalo, Niagara, Albany, and back to New York. On the trip from New York to Boston it struck us that although in America, as well as in Germany, all travel is on the right side, we rode from the Grand Central Station a long distance on the left track. Very soon we passed on the opposite track — likewise the wrong one — two trains on a very short headway. The conductor told us that such was the rule for several trains on this line. The train was, by the way, in its equipment one of the best and most luxu- rious we have used on our journeys. While in Boston we concerned ourselves chiefly with the conditions of the Terminal Company, formed for the establishment of the New South Station. The results of 23 these investigations are incorporated in the third chapter of this book. We then made a trip through this most cultured city of the United States. From Boston we traveled via Springfield to Buffalo, where we were taken on the following day by the President of the International Tramway Company in a special train to Niagara, a distance of 26.3 kilometers. Here we ad- mired, to our hearts' content, this magnificent masterpiece of nature, inspected both parts of the falls of the river (be- low and above the Falls), and proceeded then in a special car of the Niagara Belt Line along both banks of the river to Lewiston and Queenston. Next we had an opportunity to visit the power-house, which derives its power from the Falls and supplies the whole tramway system with elec- tricity. On the following day we paid a visit to the Lacka- wana Steel Works on Lake Erie, the plant of which was most cheerfully shown to us as far as foreigners may rea- sonably expect. These works are certainly a credit to human ingenuity, especially in regard to the loading facili- ties through water-power, as well as the substitution of human labor by machinery; however, they are unexcelled in America only. At any rate, Krupp's works in Essen and Rheinhausen surpass them in size and compare with them most favorably in every other respect. In this connection we wish to call attention to the fact that the most impor- tant parts of the largest dynamo machines, the old as well as the new ones, now being put up, display the mark "Friedrich Krupp, Essen." As the next day happened to be a Saturday, which is in America a half-holiday, and Monday being a national holiday, on which all business stops likewise, we returned 24 to New York during the night, traveling from Albany along the shore of the picturesque Hudson. LABOR DAY. Quite unique for us was the celebration of Labor Day, which we witnessed in New York on the fourth day of September. Hundreds of thousands of workingmen paraded through the principal streets of the city. Every one carried the national emblem, and although enthusiasm ran high, there were no excesses of any kind. We employed the two following days to discuss with some of our countrymen, conversant with American rail- road matters, a number of questions outlined before our departure. Owing to these conversations we became ac- quainted with many facts that might have escaped our attention on our trip to the West. OVERLAND TOUR. A few days later we left New York in the evening, on the Baltimore and Ohio Railroad, for Pittsburg, the most important seat of America's iron industry and commercial centre of its most extensive coal fields. On the next day we inspected the Carnegie works (Homestead Steel Works), a countryman of ours in the employ of the com- pany being our guide. Here we were given our first op- portunity to get information on the conditions of labor as existing in this country (there are 6,000 workingmen em- ployed there), and especially on the relations existing be- tween employer and employee (see the fifth chapter). Mr. Andrew Carnegie is, as we all know, one of those Americans who have done very much for the public good. And yet it seemed to us as if the social conditions of the 25 workingmen of his works did not compare favorably with those of other American estabhshments, a suspicion con- firmed later by a gentleman who is an authority in the field of social economy and who acted as juror at the St. Louis exposition. This is all the more surprising, since Carne- gie has donated many millions for universities, schools and libraries. This oldest part of the Carnegie works, which are, by the way, all owned by Morgan's steel trust, produces an- nually 400,000 tons of Bessemer steel and 1,500,000 tons of Siemens-Martin steel. Quite interesting is the manifold employment of natural gas. An adequate conception of the enormous extent of the iron industry is obtained only by going per boat, as we did, under the guidance of some high officials of the Baltimore and Ohio Railroad, down the Monongahela River until its confluence with the Alle- ghany, the beginning of the Ohio River, back to Pittsburg. Here we also saw one of the greatest plants which, out of family pride, refused to join Morgan's combine, in spite of all efforts made on that side. CHICAGO. From Pittsburg we went to Chicago by the Baltimore and Ohio Railroad to study principally the system of the Illinois Central Railroad, which has here its central seat of management. The result of our studies, embracing all the various branches of the railway service, is embodied in detail in chapters further on. Chicago is the most German city in the United States, and in regard to its growth it follows closely on the heels of New York. How immense its traffic is may be conceived from the fact that in order to comply with its demands it 26 became absolutely necessary to construct a vast network of subterranean electric freight railways. By this system freight can be forwarded from all sections of the city to the freight yards and warehouses. The main tunnels have a diameter of 3,886x4,267 meters, the branch tunnels measure 1,825x2,286 meters. The gauge is 0.6096 meters ; the highest grade, 1.57 meters; the weight of the T-rail, 24.28 kilograms. These subways were originally built and planned for telegraph and telephone conduits, but when their high value for municipal freight traffic was fully recognized, they were correspondingly altered and enlarged. Much of the burden of heavy traffic is thus kept away from the streets, and thousands of tons of coal are in this manner conveyed to the cellars, ashes removed, etc., not to speak of the hygienic advantages. The subway is also used for the delivery of mail, and the postal authorities expect in a short time to forward through it 900 tons of mail matter daily. In April, 1905, there were no less than forty-five kilometers, with thirty-eight stations in full operation, and the daily traffic amounted to over 100,000 tons. The freight expenses of street traffic in Chicago's business quar- ters are computed to be 210,000,000 marks, and it is not unlikely that, aside from other advantages, these expenses may, by a general use of the subway, be reduced at least 40 per cent. Among many other points of interest in Chicago we wish to mention the giant establishment of Marshall Field. As a retail store it is on a level with our largest warehouses ; its wholesale house for dealers, however, sur- passes in size any other known. In both establishments there is a total of about nine thousand employees. We 27 visited the huge concern in company with the German Consul Wever. The inspection of the wholesale house was particularly interesting, because it forecasts the future de- velopment of American mercantile afifairs. At present the firm of Marshall Field has scattered over Europe a large number of agencies for the purchase of goods, the most important in Germany being located in Sonneberg. Of late, however, they have begun to manufacture most goods — at least, the cheap kind — in this country, and the time is not far off when it will supply its demands independent from Europe. STOCKYARDS. Much interest was afforded us by the inspection of the Union Stockyards. Of the two largest, Armour & Com- pany and Swift & Company, we saw the former. In company with an employee of the firm we examined all the details of the process, from the arrival of the live stock to the ship- ping of the meat, etc. The mechanical appliances used in the establishment are marvelously adapted to this giant in- dustry. As will be shown in the chapter "Unions of Offi- cials and Laborers," the strike of the laborers ended with a full victory of the employers. On the very day of our visit, as we drove to the stockyards, thousands of laborers (the total force employed there averages about 7,000 men) crowded the streets in search of work. Although all na- tionalities were represented, they were orderly throughout ; above all, there was not the least sign of drunkenness among them. We were told that the men would be re-em- ployed whose positions had not been filled by others in the meantime. At all events, the power of the union had been broken, While formerly they had compelled their em- 28 ployers to engage none but members of their union, the open shop had now been proclaimed. Nothing will demonstrate more clearly the enormous railroad traffic of the Union Stockyards than the fact that they have 14,000 private cars running on the various routes. Many of these are refrigerator or heated cars that are hired out to other companies in case they are not needed for home use. We have pointed out in the eighth chapter (railroad rebates) that in the possession of rolling stock of such dimensions by gigantic corporations there may be found the issue for the next fight against the rail- roads. Unfortunately, the railways appear to be in a state of subserviency to such powers as Armour, Swift and their associates, as abject as that which once led to their complete submission to the Standard Oil Company. The Armour Stockyards alone are of a size such as surpass our largest abattoirs. In addition, they operate smaller plants in various other localities, such as Kansas City and Omaha. These works are new and equipped with all modern improvements, while the main plant in Chicago is the oldest, and therefore does not correspond to modern demands. Making a tour of the plant, we were disagree- ably surprised at the wooden flooring and calsomined walls (in Kansas City, for example, walls and floors consist of stone) ; on the other hand, much attention has been paid to sanitary conditions and to cleanliness. It seems, there- fore, unjust if in Germany the attempt is made again and again to cause distrust on this score. As to sanitary and veterinary conditions, the employees were eager to con- vince us that everything necessary had been done in this direction ; however, we were not experts enough to form a final judgment, 29 To give, at least, an idea of the dimensions of the Union Stockyards in Chicago, we wish to state that there are slaughtered, annually, more than 2,000,000 head of cattle, 6,000,000 pigs, over 2,000,000 sheep, and close to 60,000 horses. The yards contain stables, stys and other partitions in sufficient number to permit the admission at a time of 75,000 head of cattle, 300,000 pigs, 50,000 sheep, and 5,000 horses. Altogether there are employed 25,000 workingmen, and the total value of the annual production is said to amount to more than 1,300,000,000 marks. PULLMAN WORKS. -.1 After the inspection of the stockyards, we paid a visit to the Pullman works. The plant, which forms a town by itself, under the name of PuUmantown, turns out yearly 150 sleepers and parlor cars, 12,000 freight cars, and 500 so-called Standard cars. Unfortunately, we could not gain any insight into its working order, as the big plant, pre- sumably from lack of orders, had completely shut dowft for weeks. Viewed from the outside, the extensive Pull- man works create an altogether favorable impression. Concerning the relations of the Pullman Company to the railroads we refer the reader to the ninth chapter. Our stay in Chicago offered us rich material for our study of the American railway systems, for it is as much a centre of everything pertaining to the railroads as New York is the central point in the financial domain. A num- ber of railroads with administrative seats in Chicago, where all the principal routes converge, as well as numer- ous railway associations, furnished us with valuable data which, along with the verbal information given every- 30 where in the most cheerful manner, helped us greatly to complete our labors successfully. ST. PAUL AND MINNEAPOLIS. From Chicago we took the Burlington and Quincy Railroad to St. Paul, to obtain information principally in regard to the management and administration of the Great Northern Railway. Its president, James J. Hill, Sr., is at the head of its financial affairs, and lives in New York during the greater part of the year. His son, Mr. Louis Hill, is first vice-president, and superintends business in St. Paul. With him and the other vice-presidents we have minutely discussed the principles which govern the admin- istration of their railroad, and it is by reason of their communicative frankness that we were enabled to enlarge our knowledge, especially in the field of the industrial management of American railways. After we had collected, in addition, valuable material for the study of other branches of railway traffic, we in- spected the grand corn and sawmills on the Mississippi, as well as the corn elevators in the sister city, Minneapolis. Quite a peculiar phenomenon to us was the raft traffic on the Mississippi. Many thousands of logs were floating there on the river, some partly held fast to the banks by natural obstacles. By and by they would move down stream, to be fished ashore by their rightful owners. How a regular business in timber could be carried on by such crude methods is beyond our comprehension. Small steamers run up the Mississippi as far as St. Paul. The two cities, St. Paul and Minneapolis, are beauti- fully situated, and show a remarkable business develop- ment. The hilly character of the surrounding country 31 tempers the heat materially, and one never feels it so in- tensely as in Chicago, St. Louis, etc. Accommodations for the heavy traffic between the two cities are amply pro- vided for both by a railroad and several street railways. A few weeks prior to our visit several arches of a bridge connecting the high banks of the Mississippi had collapsed, some of the ruins towering high above the houses. YELLOWSTONE PARK. We then traveled on to Livingston, taking the North Coast Limited of the Northern Pacific Railroad, one of the best overland trains. Hence we proceeded by a branch line to Gardiner, the entrance station to Yellowstone Park, the American Wonderland. In a coach drawn by six horses we rode from Gardiner to the Mammoth Hotel, where a military post is located. The Park, which almost equals in area the crown land Alsace-Lorraine, does not correspond to the character of a park after German stand- ards. This large tract of land is situated in the Rocky Mountains, and, being national property, is exempt from settlement. It consists of a volcanic table-land with a medium elevation of 2,400 meters above sea-level, and en- compassed in part by charming mountain scenery. Much as we admired the many natural beauties and points of interest which nature had poured out with a lavish hand over this comparatively small area, we could not, as provided in the program, devote five days to their inspection, in view of the limited time at our disposal. As surely as the geologist, mineralogist, and chemist may thereby be enabled to enlarge his knowledge — unfortu- nately the removal of even the smallest souvenir is strictly prohibited and made well-nigh impossible by the soldiers 32 keeping guard — the needs of the layman are satisfied with viewing the environments of the Mammoth Hotel, its ter- races and hot sulphur springs, as well as some geysers, such as the Old Faithful, and finally the Grand Canon. This requires, on the whole, from two and a half to three days ; with special facilities at our command, we completed the whole five-day program through Yellowstone Park and over Yellowstone Lake in just three days. It would be more advisable, however, to follow the plan outlined above. On our three-day tour through the Park we passed over the Great Continental Divide between the Atlantic and Pacific oceans. Here we found, although at an altitude of more than 2,000 meters, a strong forest growth. Our relations with the American tourists were quite interesting. It struck us that in spite of the traveling ex- penses, which were almost prohibitive, even if measured by American standards, the quality of the tourists left much to be desired. In connection with this we were impressed with another fact. However deep-rooted and imreasoning the jingoism of the better class of Americans may be, they will, while placing their own country above any other, make frequent trips to old Europe. It is always the great multitude which stays in the country, much to the disad- vantage of their general education as well as their experi- ence. This is the more surprising, as one may reach the other side of the Atlantic in about the same time as is con- sumed by a trip from the East to Yellowstone Park, the expenses likewise being about equal. The greater part of the macadamized road which traverses the Park for a distance of about 250 kilometers, starting and terminating at the Mammoth Hotel, we found lined on either side by tree trunks, which had been 33 removed during the building of the highway. At other places we came across numerous remains of charred and half-burned timber, the cheerless but eloquent witnesses of an immense forest fire which had taken place more than twenty years ago — an unmistakable proof that anxiety as to the future and the consequent punishment it had in store for such wastefulness had not yet taken hold of the minds of the people. From the viewpoint of traffic it is noticeable that the Yellowstone Park is not crossed by any railroad. The Livingston-Gardiner Line terminates at the entrance to the main road; on its western side the Park may be ap- proached by the Oregon Short Line, a branch of the Union Pacific. Within its boundaries it is mainly the Park Trans- portation Company which furnishes accommodations by coaches of four and six horse teams. The dust raised by this mode of travel is sometimes unbearable. Most of the other transportation companies, the patrons of which are obliged to sleep in tents, are of no importance. At the Gardiner station the locomotives are not turned around; instead, the whole train moves slowly around a very sharp loop. The station itself is located on this curve. We were told that for economical reasons many terminal depots were provided with such loops, as the expenses in- volved in the building of turntables exceeded the cost of the necessary ground space for loops. When, after leaving Yellowstone Park, we again boarded the train, our attention was directed to the unusu- ally heavy mass of cinders emitted from the locomotive. As a consequence, all the windows in the train had to be kept closed. Conducive to the comfort of passengers, on the other hand, was the arrangement that several through 34 cars wei-e running in the train, which were attached, on the arrival at Livingston, to the North Coast Limited, and which had sleeping quarters. We do not know whether those who availed themselves of this opportunity found their needed rest; we preferred, on our part, to stay over night in a hotel which, to be sure, had been but half com- pleted. The North Coast Limited was composed as follows: One locomotive, one baggage car with mail compartment attached, two chair cars, one dining car, two Pullman sleeping-cars, and, lastly, an observation car, containing a compartment for smokers, a barber-shop, a bath-room, a small room with writing utensils, a larger room for non- smokers and an observation platform with a seating capa- city for ten persons. In addition there was even a small library on hand. In another chapter readers will find a detailed account of a blockade. From Livingston to Portland, Oregon, we went by the Northern Pacific, arriving there after a ride lasting about forty hours. NORTHERN PACIFIC RAILROAD. Highly instructive is the trip on the Northern Pacific, described also by Dr. v. d. Leyen, in his book "The North American Railroads." While along the route St Paul- Livingston agriculture preponderates, there being number- less small settlements in the wide valley of the Yellowstone River, through which the railroad runs for a distance of more than 500 kilometers, the further route from Living- ston to Portland begins at once to assume a different ap- pearance, for it is here that we enter the rich mining dis- trict of Montana with its gold, silver and copper mines. 35 The industrial centres of this region are Butte and Helena. Unfortunately, our time was too limited to stay here for any length of time. Soon after leaving Helena the rail- road cuts through the northern main part of the Rocky Mountains by means of a tunnel at an altitude of 1,691 meters (5,545 feet), runs then in a wide sweep through the valleys of Spokane and Columbia, noted for their riches in grain and timber, ascends on the eastern slope of the Cas- cade Mountains to an altitude of 860 meters, and finally descends in many windings to the railroad centre, Tacoma. This town carries on a brisk sea trade with the important harbor of Seattle; its industrial enterprises, wharfs and ship-building yards are of considerable extent. Its railroad facilities, however, appear to be inadequate. The railroad runs from Tacoma to Portland through a thickly populated section parallel to the Cascade Mountains on the one side and the Pacific Ocean on the other. To a railroad expert it will always be unintelligible why there should run on the much frequented main line, Portland-Tacoma-Seattle, but four trains a day in either direction. In Germany a trad- ing population of equal size would hardly content itself with such scanty accommodations. The rides through the mountains abounded in many a delightful panorama, composed of rocks and forests. The equipments of this railroad, its tunnels, bridges and dikes, class among the best of the American railways. In the construction of the rails the alternate joint is exclusive- ly used. Full of interest was also our passage through several Indian reservations (Flathead, Yakima, Puyallup In- dians) with their wigwams. In the one first mentioned 36 we watched a number of Indians preparing their supper over a fire while we were passing through. On our ride through the mountains we had also oc- casion to watch the forest fires raging along the railroad for hundreds of miles, and filling the surrounding atmos- phere at times with an unbearable smoke. Such conflagra- tions had then been raging in the State of Washington for three months ; we were told that nothing short of a heavy downpour of rain or snow would put them out. Opinions are divided as to the feasibility of stopping this destruction. Some say that man is powerless in the face of these con- flagrations, others that the expenses incurred by such ef- forts would surpass the damage done by the fires. Further- more, they claim that this timber has little or no value, as it is exceedingly plentiful in those sections and could not be used to any great advantage near by. Moreover, in spite of the remarkably low freight rates, which average about one-third of a cent per ton per mile for the distance from San Francisco to New York, it would still be un- profitable to transport it. From a sanitary standpoint people manifested the same indifference, else they would not quietly look on while the immediate environments of the towns are deprived by these fires of the altogether beneficial effects of the forests. By reason of the impenetrable smoke we were denied that much-praised view from Portland of the Cascade Moun- tains. PORTLAND, OREGON. The city of Portland, Oregon, is beautifully situated, and has, although hardly more than fifty years old, a popu- lation of 100,000 inhabitants. At the time of our stay 17 there preparations were nearly completed for a general exhibition. Will the craving for such exhibitions ever be satisfied ? The city is a rich and important industrial centre and many of the sawmills are very extensive. Our stop in Portland was particularly instructive to us, because it afforded us an opportunity to get acquainted with all the details of a vast administrative machinery and the various branches of the service of a great Western railroad (Southern Pacific). Apart from this, the com- munications we have received, and are still receiving, from the Southern Pacific have greatly helped our studies. At the Portland Union Depot we visited the permanent exposition of agricultural and horticultural products, of the various kinds of timber, minerals and ores, as found in the Oregon mountains. Similar local exhibits may be seen at other large railway stations — above all, in the Western States. They serve the purpose of giving useful hints to immigrants and other persons who intend to settle there. SHASTA ROUTE. Leaving Portland, we went to San Francisco by way of the Southern Pacific. This line is called the Shasta Route, after Mount Shasta, a volcanic mountain which lies at the northern extremity of the Sierra Nevada and rises to an elevation of 4,400 meters. At first the railroad skirts along the Cascade Mountains; it then climbs the foothills of these mountains at an altitude of 1,350 meters, passes through the lowlands between these and the foot- hills of the Sierra Nevada, reaches its highest point (1,190 meters) at Black Butte, and finally descends quite abruptly 38 into the Sacramento Valley. At Sacramento the Shasta Route joins with the Union Pacific Railroad, coming from Ogden near the Great Salt Lake. To reach Oakland, the landing station for San Francisco, the train has to pass over two water-courses, the narrower one being crossed by a bridge, the wider one (Solano) by a ferry, which is large enough to convey twenty-four heavy passenger coaches at a time. By the time-table the distance of 1,242 kilometers between Portland and San Francisco was to be covered in thirty-eight hours; our train, however, re- quired thirty-nine and one-half hours. We were told that freight trains were often infested with tramps, who found it an easy task to board trains, which frequently had to move slowly on account of the heavy grade, and to jump off again at convenient places. The whole trip affords many a glimpse upon gorgeous mountain scenery. The vegetation assumes a semi-tropical character as the train approaches the Sacramento Valley. Nearly all the railroad buildings along the route are built of wood in a style most simple, sometimes even crude. SAN FRANCISCO. Having reached Oakland, we crossed San Francisco Bay by ferry over to the city of San Francisco. Here we made a long stop in order to have a few days of rest, during which we hoped to recuperate from the fatigue at- tendant upon our long and arduous journey. At the same time it was our intention to get acquainted with the truly wonderful surroundings of the city so delightfully located at the Golden Gate. The harbor enjoys rare natural ad- vantages, and the protection from heavy seas afforded to ships is supplemented by the work of man. Human in- 39 genuity has here done much to produce a port which is adequate to all maritime requirements. Equally splendid are the works of the American naval station erected in and about San Francisco. The city shows an extraordinary growth, and as one- family buildings are the rule, its dimensions are such as to suggest a much larger population. There are at present about 400,000 inhabitants, the houses are mostly built of wood, yet with an eye to architectural beauty. We were told that wooden buildings are a great deal more cheaper than stone houses ; on the other hand, the constantly recur- ring earthquakes visiting this region make wood the safest building material. Houses are constructed everywhere with great haste, and, to our ideas, with little regard to solidity. Looking at the flimsy buildings in course of con- struction, one wonders how they could ever resist an ordi- nary gust of wind. The railroad accommodations are rather antiquated. San Francisco has but one small depot, that of the Southern Pacific, for suburban traffic. All other communication is via Oakland, on the other side of San Francisco Bay. Ferries connect with the spacious Union Ferry Depot, erected by the various railway lines. In like manner the shipment of goods to and from the railroads is by water, there being a special landing-place at Valleja Junction. While in the matter of railroads there was nothing striking to be seen here, we had ample occasion to gather information on other subjects, such as the labor problem. A question of this kind is of unusual significance in a town which was once the headquarters of the gold-seekers, and where, even nowadays, money changes hands more quickly than anywhere else. 40 After we had, in company with a gentleman well knowti in naval circles, inspected the naval station at Mare Island, we left San Francisco to go by the Atlantic Express from Oakland, via Sacramento and Ogden, to Denver. The intended trip to Los Angeles, California, and thence over the Santa Fe Railway, we had to give up, partly from lack of time, partly because cloudbursts had devastated a con- siderable part of the line, a circumstance which would have caused an additional delay in our program. Our mis- givings on this score were only too well founded, as coun- trymen of ours told us later that in consequence of rail- road blockades they had been obliged to put up at out-of- the-way stations and settlements for a period of more than four days. SOUTHERN AND UNION PACIFIC RAILROADS. Our itinerary again took us to Sacramento, where the roads divide to Portland and to Ogden. The distance of 1,353 kilometers between Sacramento and Ogden is, ac- cording to schedule, covered by the Overland Limited in twenty-seven hours, by the so-called Atlantic Express in thirty-two and one-half hours. As the former train was overcrowded we took the latter, and, owing to unexpected delays, we reached Ogden in thirty-four hours and twenty minutes. In judging of the speed of trains one must bear in mind that the comparatively small number of stations and crossings necessitates but few stops. There are but three passenger trains daily in either direction, and a freight train will seldom be met. On the other hand, the many high grades in the road-bed tend to diminish the speed. Coming from Sacramento (about forty-eight meters above sea-level) the train climbs quickly by steep 41 grades up to the Sierra Nevada, a distance of i6o kilo- meters, reaches its highest elevation (2,135 meters) at the Summit Station, descends to 1,193 meters, rises anew to a height of 1,877 meters at Fenelon Station, and strikes Ogden only after many minor up and down grades, at an altitude of about 1,320 meters — ^viz., a few meters above the surface of Great Salt Lake. At Ogden we took the Union Pacific Railroad. The train first traverses the Wahsatch Mountains, runs through a wide gap of the Rocky Mountains, mounts the back of this chain at Sherman Station, at an elevation of 2,440 meters, and leaves it at Cheyenne (1,845 meters — 6,050 feet — above the sea). The line now divides into two branches, crossing over the prairies, meadow lands and agricultural sections of Nebraska until Sioux City, Omaha and Kansas City are reached. From Cheyenne we rode along the foot of the Rocky Mountains through a charming prairie landscape, interrupted here and there by seemingly thriving settlements. We then arrived at Denver, the pearl of Western cities, having been on the journey from San Francisco for three days and two nights. Denver is most picturesquely situated at the eastern slope of the Rocky Mountains, at an altitude of 5,270 feet ( 1,602 meters) above the level of the sea, and the panorama which unfolds itself to one's admiring gaze upon the snow-capped peaks of that mighty range of mountains is indeed en- chanting. In contrast with the Northern Pacific line and its many commercial and industrial enterprises, the united Southern and Union Pacific line shows no industries of any importance along the whole stretch of land intervening between Sacramento and Denver. It is at Denver that 42 the feverish industrial activity crops up again, and, it is true, on a grand scale. On the Californian side of the Sierra Nevada horticulture is most highly developed. The silver mining district near Virginia, on the eastern slope of the Sierra Nevada, is not visible from Reno Station. After leaving the Sierra Nevada and the State of Cali- fornia the railroad enters the State of Nevada, crossing well-nigh interminable deserts but seldom relieved by an oasis. Along the whole line, from Reno to Ogden, many improvements of the road-bed may be witnessed. When the road was first laid out, expensive engineering feats, such as bridges and excavations or cuts through mountains and rocks, were carefully avoided, while grades and curves were not minded. Now the road is being leveled. The improvements seem to centre chiefly in the shortening of the road-bed from Ogden to Lucia, a station located in a gloomy desert. By crossing over Great Salt Lake for a distance of not less than forty-four kilometers, the old route, which skirted the northern side of the lake, is shortened by just seventy kilometers. The wooden bridge, a provisional and certainly insecure structure, is now being replaced by concrete mason work. Long before getting to Lucia we noticed in the neighborhood of the railroad numberless old passenger coaches and covered freight cars, standing on specially built side tracks, which served as shelter for thousands of laborers. All nations of the globe appeared to be represented here, and for that reason the railroad engineers superintending the work may not find it an easy task to preserve anything like a state of order among these heterogeneous elements. Ogden is a prosperous industrial city. The same may be said of Laramie, in the Rocky Mountains, where there is a large 43 depot for railroad rails. In another part of the book we shall give a coherent report on the vexations to which we were repeatedly subjected. DENVER. Denver, the capital of Colorado, is an important rail- road centre and remarkable for the rapid development of its industries. The Union Depot, the point of convergence of all the railways, is a very stately establishment, yet still in need of extensive improvements. In proof of this we mention that on leaving the station we observed, be- tween it and the city, two tracks on a level with the street that were, at least to our ideas, a decided impediment or obstruction to the heavy traffic going on there. We in- spected some of the leading factories, and received some information on the methods used in the handling of freight and passenger traffic. Worthy of notice is the fact that this city seems to be a gold-mine for the scalpers — i. e., private dealers in railroad tickets — because many agencies of this kind could be noticed. We now separated for a few days, one going to Lin- coln (Nebraska), Kansas City and Parsons (Kansas), the other making an excursion to Colorado Springs and the mining district of Cripple Creek. Both of us, however, found during these days again ample opportunities to sup- plement our special and general studies by most valuable information. Lincoln, Nebraska, an attractive city with a well- attended high school, is situated in a fertile plain and of some importance as a railroad centre. In another sense it also deserves to be mentioned, because it was here — aside from short railroad trips, principally those in the 44 vicinity of New York — that our train arrived precisely on the minute. On the trip from Denver to Lincoln (780 kilometers) the cars ran remarkably smooth, and the chief engineer told us that this was owing to the introduction over the whole line of the alternate joint, the even joint having been discarded ten years ago. At the same time the alter- nate joint is more economical in repairs. At several sta- tions along the route, where changes in the formation of the train were made, we were greatly annoyed by the violent jolt accompanying the automatic coupling of the cars. Thus it happened that a traveler who held a bottle in his hand was thrown from his chair, and the injury caused to his arm was such as to force him to discontinue the journey and to seek medical aid. In many places along the road the wooden bridges were being replaced by concrete stone bridges. In the main workshops of the Burlington and Quincy Railroad, which are located at Havelok, a suburb of Lin- coln, about 650 laborers are employed. The shops are not spacious, the machinery is not better than that used in our more modern works, and the workmanship did not, as far as we were able to judge, appear to be as accurate as with us. The leading engineer, the son of a German civil engineer, assured us, however, that the work was done in an entirely satisfactory manner. In spite of this, a locomotive which had been in use for less than a year was being repaired for defects which, as was admitted, were not the result of a railroad accident. Among the working- men there were several Germans who had worked at the same trade in Germany. The daily work was ten hours, with Saturday as a holiday; however, for weeks they had 45 . ' worked but eight hours a day, because, as people said, business had slackened on account of the coming Presi- dential election. All hands, with the exception of the foremen, are paid by the piece, earning in this manner from thirty-five to forty cents an hour. The foremen are paid at the rate of $ioo to $125 a month, Workmasters, standing between the foremen and the leading engineer, seem to be unknown. KANSAS CITY AND PARSONS. Kansas City, at the confluence of the Kansas and Missouri rivers, is a lively industrial city of about 160,000 inhabitants. We inspected the vast stockyards and abat- toirs of Armour & Company. The river docks and other shipping facilities are insignificant; the railroad traffic, on the other hand, both in regard to freight and passen- gers, is very extensive, as a great many lines meet at this place. Immense as the traffic is, its stations are altogether out of date. The waiting-rooms are much too small to accommodate the throngs of people that crowd in about three times a day during commission hours. No sidewalks are provided in front of the depot, and nothing but a few planks are between the rails. Everything is so crammed as to make accidents unavoidable, and they are, indeed, a matter of common occurrence. Only with the aid of a well-tipped porter did we succeed in elbowing our way through the crowd and to board our train. A station-mas- ter was on hand on the so-called platform, but he could not give us any information, as all trains were behind time. Full of interest was a visit to a large farm near Par- sons, a railroad centre in Kansas, in the neighborhood of the Texas State line. Agriculture is still highly remunera- 46 tive hereabout, and the soil itself is rich enough to yield fine crops without fertilizers. The railroad companies accord many favors and privileges to the larger farms, and agents often call to inquire for their wants. On the other hand, when asked to put on an extra passenger train, the company turns a deaf ear to all en- treaties in this direction. At eleven o'clock in the morn- ing a train was scheduled to run from Parsons to Kansas City. Shortly before eleven o'clock it was announced that the train would be about two hours late. As a matter of fact, it did not turn up until half-past five in the afternoon. In the meantime all the travelers, numbering from thirty to forty, were compelled to wait, although there were enough locomotives and cars at the Parsons Station to form a special train. Most of the passengers were business men, and there is no doubt that they all suffered more or less through the loss of an afternoon. This short three- hour trip from Parsons to Kansas City impressed us again with the fact that it is almost impossible for a cultured European to make use of the so-called American "first class." The attempt to ride in a chair car had to be given up soon, because we could not bear, while in the first and only class, the human perspiration and the fumes of tobacco coming from the smoking compartment. Add to this the dust entering through the open windows and the abominable spitting habit of the men — in part, also, of the women, of whom many chew, even in the Pullman cars — we felt anything but comfortable. Moving over to the Pullman car, we had to pay an additional 75 cents. Here we were more at ease, but we missed the connection for St. Louis, with the result that we did not arrive at the World's Fair until a day later. 47 ST. LOUIS WORLD'S FAIR. We do not feel competent to pronounce judgment on that exhibition, but we think we are justified in saying that it had some disappointments in store for those who came with great expectations. All our countrymen with whom we have discussed the subject, shared our opinion that here again proof has been given that the time of universal expositions had irrevocably passed away. They render justice neither to the expert nor to the layman. Characteristic of the American is the boldness with which he arranges an exhibition in a provincial town, a place which would naturally be of little interest to a stranger. The sole and very doubtful advantage of the St. Louis fair over the last Paris exposition consisted, according to experts, in its larger area. Moreover, exorbitant prices were charged for everything, even admission to the fair costing 50 cents. We had to pay $12 daily for a bedroom in the twelfth story. A dinner in the German House, which in Germany would barely have cost three marks, cost us $3. Some of the railways, among them the Wabash Rail- road, had extended their lines close up to the gates of the fair, with special stations for the accommodation of tourists, something that had been done before by the Prussian government lines at Dusseldorf. It is still fresh in the memory of all that, along with the Japanese, the German exhibit was generally accorded the leading place among all the others. We doubt whether the excellent displays made by the Prussian railroads were duly appreciated. They included many exhibits, graphically and tastefully arranged, of many contrivances and appliances devised for the safety 48 of the traveling public. Another section illustrated the beneficial effects resulting from the government insurance of the laboring classes. In the vast complex of exhibits all this could scarcely receive the attention it deserved. The Prussian-Hessian State railroad administration had made a special exhibit labeled "A German Railroad," demonstrating the latest models of rails and safety ap- pliances of a railway station. Although this section was favorably commented upon, there can be no doubt but that exhibits of this category will be better appreciated in special expositions. It is to be regretted — and our opinion is shared by many prominent German-Americans — that Germany has so far not taken the initiative in replacing world's fairs by International Special Expositions. It seems, indeed, to be entirely practicable to inaugurate ex- hibitions which illustrate in detail the working mechanism and the latest advances made in the various means of transportation. We have been advised repeatedly to exert our influence in the direction of a railroad exhibition to be held in Berlin. From what we have seen in St. Louis we do not entertain the least doubts as to the feasibility of such an undertaking. It could certainly not fail to prove a wonderful boom for the further evolution of the railways. Whatever else on the subject of railroads was of any value to us — as, for instance, the Pullman exhibit — will be considered in its proper place. We were given a most amiable reception by the Ger- man Commissioner, who detailed some of his assistants to show us through the exposition. His winsome per- sonality gained him many friends, and he has thereby greatly contributed to the success of the German division of the fair. 49 In company with a prominent German-American we devoted the afternoon before our departure from St. Louis to an inspection of the transportation facilities on the Mississippi. On this occasion we clearly recognized the extent to which railroads had decreased transportation by water. The shipping trade, which formerly played a great part in the development of St. Louis, has been paralyzed almost completely. Passenger traffic by water, as well as shipments of grain, coal and cotton, have largely ceased. Conforming to the changed conditions, the head of the formerly all-important Mississippi Navigation Company has invested long ago all his money in railroads. The Union Depot is the central point of all the rail- road lines in St. Louis. It is an imposing structure, yet the hall, which covers thirty-two tracks, is quite dark, so that even in the daytime the passenger coaches have to be lit up. Moreover, the arrangements made for in and out going trains did not appear to be up to date nor safe in operation. PITTSBURG. Leaving St. Louis, we turned once more to Pittsburg. On our first visit we had, aside from the inspection of the Carnegie works, spent much time on the study of the ad- ministration service of the Baltimore and Ohio Railroad, and also collected extensive material for our report. After we had again discussed various questions with the leading officials of that company and received the widest possible information to our queries, we now directed our atten- tion to the examination of the equipments and of the ad- ministrative system of the Pennsylvania Railroad. The executive office of the Western department of this line 50 is located in Pittsburg. We were most generously per- mitted to acquaint ourselves with the business methods and general inside working order of the company, which is one of the best managed of American railways. In the absence of Mr. Cassatt, who is at the same time president of the department east of Pittsburg and who has his per- manent residence in Philadelphia, we were received by his representative. Whatever information ;we desired was given us most unstintingly, and thus we gathered valuable material for use in our technical reports. In addition, we inspected the new and expensive works of the Wabash Railroad. This company is building a large depot for passenger traffic, and, in connection with it, it is driving a tunnel through Washington Hill and spanning the Monongahela River. The halls and waiting-rooms, with the flights of offices, produce a most favorable im- pression, but with all that they appear, in many respects, to comply little with modern requirements. The fact that an esplanade is missing will not be productive of any incon- venience to the traveling public, since in the new building, as well as in all large North American railroad stations, the arrival and departure of passengers and baggage takes place in a special hall. CLEVELAND, OHIO. Our next destination was Cleveland. Here we studied the devices for the unloading of ore from ships, as well as the loading of ships with coal. Cleveland, aside from being an important railroad centre, is also the head- quarters of the Standard Oil Company, which maintains enormous petroleum tanks and refineries. SI We watched with particular care the loading of a coal boat, which was bound for Duluth, and had a capacity of 10,000 tons. The charge and discharge of the heavy freight cars is brought about in a most speedy manner, and with as little exertion of human labor as possible. Equally instructive was the inspection of automatic unloading machines, through which ore was lifted from the ship to the freight car. Subsequently we visited the freight yards of the Pennsylvania and the Baltimore and Ohio railroads. The result of our investigations will be found in the eighth chapter. Here it may suffice to mention that the new buildings and works of the Pennsylvania Railroad make a splendid impression. The shed for sending and receiv- ing goods is divided lengthwise, and in the centre of it, all covered up like the rest, are the tracks. The head end of the shed is set aside for the delivery of goods, the long side for their reception. The offices, rooms for recreation and other localities are the best we have yet seen at American stations. WASHINGTON. Our itinerary took us without delay from Cleveland, via Pittsburg, to Washington. During the trip we noticed many alterations being made for the purpose of shortening and leveling out the road-bed. A heavy freight car, which obstructed the track in consequence of the bursting of one of its sides, delayed us for several hours. While in Washington we spent most of our time in investigating the methods of the Interstate Commerce Com- mission. The statistical and other data obtained here form, 52 to a large degree, the foundation for the subsequent tech- nical statements. BALTIMORE. Going from Washington to Baltimore, we were re- ceived most cordially by the president, as well as the vice- president and the other principal officials with whom we came in contact. In one of the conversations the increase in the carrying capacity of freight cars was touched upon. The eighth chapter of this book will give a detailed account of this matter. We informed ourselves in the most thorough manner of the administrative methods employed by the Baltimore and Ohio Railroad. Unfortunately, we could not get ac- quainted with the normal working order of this great com- pany, as the conflagration of 1903 had destroyed their main office building. Most of the offices are at present tem- porarily located in the upper stories of the station. Al- though this line is controlled by the Pennsylvania system (see third chapter), it succeeded in maintaining a large measure of independence as regards its management. The company is one of those that evidently make the greatest efforts to comply with the highest demands, both as to equipments and methods. Having reorganized on a new financial basis and in an economical manner a number of years ago, the company has met with ever-increasing suc- cess, and it is now in a position to expend large sums for improvements. While traveling over its lines we observed that it had reduced and removed the original sharp curves, which were both expensive and dangerous, and that it had done its utmost to avoid the mistakes made in the past by installing the block system and constructing a heavy road- 53 bed. Much remains to be done yet in regard to the erection of adequate freight yards. There are, for instance, tracks on some of the principal streets of Baltimore, where whole trains are loaded and unloaded. Thus, also, its harbor freight yards are anything but perfect. That there is, therefore, much room for improvement was self-evident to us. We are under the impression that this railroad, the methods of which we were subsequently enabled to study closely by means of the business informa- tion placed at our disposal, would prove an extensive, but withal appreciative sphere of activity for an energetic organizer of the Prussian railroad school. Notwithstand- ing all this, the Baltimore and Ohio Railroad is one of the best managed. PHILADELPHIA. From Baltimore we went to Philadelphia to study the Pennsylvania Railway east of Pittsburg. That their system of management is one of the best, and that their methods are safe and reliable, must be admitted, even if we apply our own strict standards. Conversely it cannot be denied, and this conception has been strengthened by the subsequent investigation of their system, that this road is ruled by a bureaucracy and much red-tape in the hand- ling of details and non-essentials, which is bound to mate- rially increase the cost of management. This bureaucracy is the result of an exaggerated centralization. It is true, though, that in view of the colossal business transacted, the Pennsylvania Railroad can well afford the luxury of a superabundance of officials. The salient point here, as well as in other fields of American industrial, commercial and scientific activity, is 54 the fact that the peculiar strength of American energy is grounded, to a certain extent, on a sort of quick perception, decision and enterprise, to which is closely allied a certain superficiality or lack of thoroughness. Moreover, the education or natural inclination of the American is not such as to make him strive for the success of his labors by wise and economical restraint of his resources or by a judicious employment of energy. The details of our local observations and following studies concerning the two last-named managements will be dealt with in appropriate chapters. There we shall also discuss what the Pennsylvania Railroad, as well as other companies, have done for their employees in a social- political sense. In this matter the Pennsylvania Railroad stands likewise at the head of all companies, but it nowhere approaches — if comparisons be possible and permissible — the past and present achievements in this field of the Prus- sian and other German State railway administrations. Visiting the Baldwin Locomotive Works, we found the working force reduced from 17,000 to 6,000 men. A large number of men had been out of employment for months, apparently from lack of orders; we did not suc- ceed in ascertaining the real cause for this wholesale dis- charge. Is it possible that the owners — the works are pri- vate property, not controlled by a corporation — pursued the same policy as was followed by Pullman in Chicago ? In Philadelphia we occupied our highest living quar- ters. We lived on the twentieth floor of the hotel, while in New York we did not get beyond the fourteenth floor. 55 SUMMARY OF OUR TRIP. After an absence of several months we returned to New York. In many lengthy discussions and unconven- tional conversations with experts and men experienced in the American business world, we had an opportunity to correct, whenever necessary, the impressions received and to digest the studies which we had commenced while on the road. We took especial pains to get an insight into the financial organization of certain companies (Pullman and express companies) and to discover — or, rather, to under- stand — the peculiar relations existing between them and the various railroads. Apart from this, we availed our- selves of the opportunity of studying, among other subjects, the local service and methods employed at the large Grand Central Station of the New York Central Railroad. Here we saw the so-called switching of locomotives on the ar- rival of local trains. This consists in shunting the loco- motive, at its entrance into the station, onto another track, by means of a switching contrivance operated by com- pressed air, after the machine has been detached or un- coupled from the train, just prior to its arrival. This is done in order to be able to use the machine at once some- where else. The whole proceeding — which has as yet, as we were told, never caused any accidents — is still hazard- ous enough to preclude its adoption by German railroads. Should it ever miscarry accidents are sure to result. Furthermore, we inspected the building of the Railroad Young Men's Christian Association on Madison Avenue. Special mention will be made of this institution later on. That this association and its many branches, which are 56 scattered over the country, have been highly prosperous, even in a financial sense, was clearly demonstrated to us on the occasion of our visits. It was also patent that this success is due — in part, at least — to their union with the general Young Men's Christian Association. This is not surprising in view of the general character of Americans and their religious conception of life in particular. Still, admission to the association is by no means conditional to any special creed or faith, nor are the members obliged to take part in any religious exercises. This policy is em- phasized again and again. They thus show due respect for the opinions of that class of employees which is either indifferent or even averse to any combination between re- ligious exercise and social life. At the same time we were soon agreed that, however desirable for our conditions such an unofficial union of railroaders might be, it could never meet with any possible success among us, as long as it was mixed up with an association pursuing religious aims. To be sure, those whose beneficial influence could otherwise be relied upon, would be the very elements to object to a religious association, although this would by no means be tantamount to a lack of religious feeling. However, an attempt to produce something of a similar kind in Germany would be worth trying, especially as re- gards the social side. But it is certain that a thoughtful treatment of the project on the part of competent and, above all, reliable people would have to precede any definite determination in this direction. But, indeed, anything savoring of authoritative direction would have to be care- fully avoided in the proposed institution. On the other hand, we believe that the financial side of the question — which was solved most easily in America by reason of 57 the comparative wealth of the circles connected with the railroads — would not offer insuperable difficulties even with us, provided that this matter be taken in hand by the right parties. In the first place, we have in mind the city of Berlin and its suburbs. Aside from thousand of rail- roaders of all classes who are permanently employed here- about, many others come to Berlin temporarily on some official duty, not to speak of those who stay there on leave of absence. To provide a headquarters for all these per- sons, a place where they may not only obtain good and cheap food, but also suitable and instructive entertain- ment, as well as shelter for a short time, would be an under- taking calculated to benefit railroad employees. Our itinerary was as follows : Kilometers. Trip from Berlin to Cuxhaven. . , 402 Cuxhaven-New York (3,654 nautical miles) 6,778 New York-Boston 376 Boston-Buffalo-Niagara Falls-New York 1,570 New York-Scarborough and back 102 New York-Pittsburg 714 Pittsburg-Chicago 713 Chicago-St. Paul 707 St. Paul-Livingston- Yellowstone Park-Livingston- Portland 3,107 Portland-San Francisco 1,242 Excursion to Mare Island and back 64 San Francisco-Denver 2,227 Denver-Lincoln yyy Lincoln-Kansas City 335 Kansas City-Parsons 220 58 Kilometers. Parsons-Kansas City 220 Kansas City-St. Louis 348 St. Louis-Pittsburg 1,082 Pittsburg-Cleveland 240 Cleveland-Washington 1,156 Washington-Philadelphia 218 Philadelphia-New York 145 New York-Cuxhaven 6,778 Cuxhaven-Berlin 402 29,923 Trips in Yellowstone Park 246 30,169 This is a distance sufficient to take us fifty-one times from Berlin to Cologne. (Our American itinerary is marked out on the map. ) While on the trip we have spent fifteen nights and seventeen days in railroad coaches, and this in all kinds of cars, from the best private and Pullman car, with state- room attached, down to the ordinary passenger coach with- out any accommodations for sleeping. Notwithstanding all our labors and exertions, and although the parts of the United States visited by us — with the exception of a few Western sections — offer less in the line of beautiful landscapes and points of historical interest than travels in Europe, we do not feel sorry for having gone to the extreme West, the less so, as, owing to the obliging disposition of those whom we met, our attention was drawn to matters that have not been brought so far before the public forum. 59 SECOND CHAPTER. Observations of a General Nature, but Particularly ON Railroad Travel. Uniformity of Buildings, Streets, Hotels, Local Transit Facili- ties. — Electric Street Railroads. — Mechanical Institutions. — Equipment of Railroad Passenger Cars, Service, Lighting. — Motion of Cars, Position of Rails. — Operation of Trains: Speed, Train Dispatching, Management of Stations, Block- ades, Accidents, Mechanical Safety Appliances. — Industrial Management. — Waiting Rooms, Quick Lunch Rooms, etc. The striving for uniformity — i. e., the desire to repro- duce ad infinitum well-tested models or patterns — is a phe- nomenon peculiar to this country and bound up with a character trait of the American people. At any rate, it is certain that this phenomenon manifests itself nowhere as strongly as here. There is no mistaking the fact that the Americans owe to its strict observance the success of many of their enterprises, particularly in the industrial sphere. Germans are not likely to imitate this tendency, in as much as it would involve a partial loss of their individuality, which is distasteful to them. As purely agricultural villages after the European model are lacking, all settlements may ultimately develop into towns. We also observed that the towns and cities are laid out by a certain rectangular system, which provides for a network of thoroughfares crossing each other, with a main avenue and side streets running at a right angle. 6i This is the so-called block system. While historical events and the necessities of war determined, in a high degree, the location of European cities and the arrangement of their streets, American towns could, as modern colonies, develop from the start free and unhampered. In choosing a site, rivers and lakes were determining factors to a larger ex- tent than is the case in the Old World, and this is in keep- ing with the practical sense of the settlers, to whom the suitability of a place for the development of commerce and industry was of paramount importance. In conse- quence of this tendency, factories and workshops of every description are located in large numbers within the central portions of the cities. Streets are mostly designated by numbers, instead of by names, as is the European custom, a circumstance which greatly facilitates orientation. Build- ings — large structures in particular — show a striking simi- larity of design ; as an example, we mention the State capi- tols in the capitals of the various States. The cupolas of these buildings are uniform and a faithful reproduction of that of the Washington capitol. Being very tall, they may be seen from a great distance. This sameness of architec- ture displayed by American towns makes it difficult to re- tain separate mental pictures of their general appearance, and if Nature, with her infinite variety, did not somewhat relieve this monotony, they would almost be deficient in distinguishing characteristics. A strikingly peculiar phenomenon in this direction are the skyscrapers, with their twenty and more stories. They probably owe their existence to the extraordinarily crammed conditions of the old city of New York. Little by little this style has been copied by other cities through- out the Union, even by small communities, and often with- 62 out local necessity; nor does there appear to be any de- crease in their further triumphant development. This American tendency toward uniformity also re- veals itself plainly in the architecture of hotels and their in- terior furnishings. More than that, the conduct of the guests is made to conform to conventional ruts. This is highly distasteful to us Germans, as it deprives us of per- sonal freedom, something which we would not willingly give up even while traveling. According to the so-called American plan, guests — even those who stay but one or two days — are charged the full price for board, which in- cludes room and three meals a day. To be sure, the hotels in the Eastern States recognize the European plan also, but this concession to European custom dies out gradually as one travels westward. Ice-water is freely used throughout the land — almost a whole hemisphere — and this notwithstanding its avow- edly noxious effect upon human health, and without any regard to climatic conditions. Furthermore, it is surprising that, in spite of the heterogeneity of the American nation, there should exist such a widespread and almost uniform aversion to go from one point to another within the city in the ordinary way — i. e., to walk. This may, in the main, be traced to the fact that so many of the towns are stretched out, often for many miles, along rivers and lakes, and to the correspondingly increased distances, even in small places. Among people devoted to the principle of "time is money," it was there- fore but a matter of course that they favored fast ways of locomotion ; hence, the unparalleled development of their street railway system. In the United States street rail- ways will flourish in comparatively small localities, whereas German places of the same size could not afford the luxury of tramways, as the average German citizen would con- sider it an extravagance to spend ten pfennig for a short trip. It is also noticeable that the mechanical lay-out of the large cities is copied by the small towns. On the other hand, it strikes one that a country where inventiveness has achieved triumphs in the technical sphere should be so un- progressive in other lines as to permit practices to survive which date from the time when the operation of tramways was in a state of infancy. Thus, for instance, tickets are dispensed with, but transfer tickets are given to those pas- sengers who wish to use another line. Similar conditions prevail with the Paris omnibus service. A passenger wish- ing to transfer informs the conductor about it on entering the car, and the latter must hand him a transfer ticket. A ticket control for the other passengers is not customary, although these form about 90 per cent, of all patrons. The conductor simply rings up the number of fares paid, either by turning a lever or by pulling a cord which runs along both sides of the car near its ceiling. At all events, he is expected to do so. We have, however, repeatedly ob- served that, in case four passengers, for example, had en- tered the car and paid their fares, the conductor pulled the line but twice, thus pocketing the other fares. The manager of a large street railway assured us that on his road the defalcations on the part of conductors has assumed rather serious dimensions. In reply to our query as to why the company did not resort to inspectors, unless some other system of control was contemplated, we were told that such method would but complicate matters, as in that case the conductor would have to look out not only for his own but also for the inspector's share. 64 The reluctance of street railway companies in the mat- ter of giving tickets to their patrons appears utterly unin- telligible, in view of the fact that in America the control check system is highly flourishing and resorted to in a thousand and one ways. In Germany pay checks are used in the largest warehouses only; in this country, however, they are given in the most insignificant store and smallest hotel, even for the most trifling amount. A uniform rate of 5 cents a single trip is charged on the street railways, as well as on the elevated roads of New York, Boston and Chicago. As there is no extra charge for transfer tickets, the suburbs can generally be reached at this comparatively low figure. ELECTRIC STREET RAILROADS. In the United States suburban trafiic has been grad- ually extended to the outlying districts. It might not be amiss to trace electric transit through the various stages of its evolution. The total length of these roads amounted, in 1890, to 1,471 kilometers; in 1902, to 26,115 kilometers. In 1890 the rolling stock comprised 32,505 cars; in 1902, 60,290 cars. The number of employees rose during the same period from 70,764 to 140,769, and the number of patrons from 2,023,010,202 to 4,774,21 1,904 annually. The main task of electric tramways consists, it is true, in the transportation of passengers within the towns and cities, but, as mentioned above, they are now developing into means of transit between different localities. In the States of Ohio and Indiana, for instance, there exist electric lines that connect distant places. In the open country a speed of sixty-five kilometers an hour is not infrequently attained, and in one locality the rate of motion is not less than 88.5 65 kilometers per hour. Some of the Hnes are more than loo kilometers in length, and the projected line from Wheeling to Indianapolis will even measure 587 kilometers. In some respects the electric surface lines compete with the rail- roads, and this is particularly the case in some of the Western States. They have special road-beds of their own, with heavy rails and cars similar to railroad coaches. Modern cars in the cities along the Eastern coast measure ten meters in length and more, and their weight is about eleven German tons. The cars used for long distance traffic are on an average 15.2 meters long and 22.7 tons in weight, but there are a few cars with a length of 18 meters. On some of the American electric street routes private cars have been installed, and in Indiana and Ohio even sleeping cars are being introduced. All this goes to show that it is possible at the present time to travel comfortably over considerable distances by the use of electric street cars. Some of the lines have their own special stations. In Indianapolis there exists a central depot in which all the nine electric lines concentrate, and the same is the case in other cities. Freight traffic has not as yet developed to any extent, but it is no doubt capable of great expansion. This is true both as regards the transportation of goods within the cities and especially between different places. The latter phase is beginning to receive the most careful attention on the part of the companies. The freight rate is, as a rule, a little lower than the price charged by the forwarding agents, and a little higher than that of the railroads. 66 The capital invested in electric and other street rail- ways amounts at present to about twelve billion marks. Their financial condition is generally good. In 1902 there were paid in interest and dividends : (a) In cities of 500,000 inhabitants and more, 35.2 per cent, of the gross receipts. (b) In cities of 100,000 to 300,000 inhabitants, 31.6 per cent. (c) In localities of from 25,000 to 100,000 inhabit- ants, 24.1 per cent. (d) In smaller places, 18.9 per cent. Long distance roads paid about 30 per cent. These figures, it is true, do not justify any safe con- clusion as to the actual profits on the capital invested; it is certain, however, that the profitable character of enter- prises of this kind has never been questioned in the United States. Including the few non-electric street railways, the gross revenues were 1,029,000,000 marks and the operat- ing expenses amounted to 592,000,000 marks — viz., 57.5 per cent, of the former. Among the operating expenses there figures an item of 39,000,000 marks — i. e., one-fifteenth of the total expenses — paid out to persons on suits for dam- ages. One thousand two hundred and eighteen persons lost their lives through accidents, and 47,429 were in- jured; 32 per cent, of these accidents relate to employees and passengers, 68 per cent, to other persons. MECHANICAL DEVICES. The substitution of human strength by mechanical appliances is one of the most conspicuous tendencies oper- 67 ating throughout the United States. Even the smallest railroad stations are equipped with all sorts of machinery, such as chutes for conveying freight, and, in particular, coal from the cars; other ingenious contrivances for load- ing and unloading are not lacking. In like manner, quar- ries, even the most insignificant, are supplied with hydraulic and electric machinery. It is a question whether such tei}- dency will always be economical. Although too little may be done in Germany in this line, we apprehend that the untiring American spirit of enterprise is not entirely free from exaggerations. The sight of deserted workshops of every description is doubtless more common in the New World than in the Old. Notwithstanding the bitter strife and economical competition characterizing the relations between the dif- ferent railway companies, there obtains among them a striking uniformity in regard to the equipment and opera- tion of their lines. In another chapter we shall treat this subject in detail. Here we are concerned merely with ob- servations made during our railroad trips. SERVICE OF RAILROADS. Any tourist who does not happen to be a railroad ex- pert is likely to favor the American standard car system. Passenger coaches are either four or six axled. There are sixty-two seats in each car, arranged across either side of the aisle. The space allotted to each passenger is about identical with that of our third class. The backs of seats may be moved backward and forward; they may also be inclined at any angle so as to afford a resting-place for the head. Cars are entered through a door on either end. Usually each coach is equipped with two toilet-rooms, one 68 for ladies, and the other for men. Facilities for washing appear to be provided on through trains only. The standard car (chair car) is quite well adapted to shorter trips, but on long journeys it scarcely complies with moderate demands. Occupying a sitting posture with bent legs for any length of time is uncomfortable. Persons moving up and down the aisles are a source of annoyance, even if all the other passengers keep their seats. Our cars of the third class are undoubtedly better adapted to the habits and customs of the German people than the American chair cars. In Germany comparatively few persons crowd into a compartment. Besides having access to a toilet-room, there are also special women com- partments. That the ordinary American coach cannot compare with our second or even third class is so self- evident as to require no further explanation. Americans are, at all events, satisfied with their chair cars, and the companies will not give up this system vol- untarily, for it offers many advantages to them. The de- sire to secure privacy which is typical of the higher strata of German society cannot be complied with in the United States so long as the chair cars remain in general use. The private staterooms which are confined exclusively to Pullman cars, do not play any part as yet, both on account of their rarity and the additional fare charged for their use. It is more than doubtful that the chair car system will ever be abandoned. It originated at a time when railroads still traversed vast stretches of wilderness, and when the best protection from robbers and thieves was to be gained by placing all travelers in a space common to all. The average American is likely to look upon our compartment 69 system with the same disfavor that was expressed by our public on the occasion of the partial introduction of the American system on trains running between Berlin and Hamburg. On longer trips, provided his means permit him to do so, the American uses the Pullman car. These coaches are built in the main after the pattern of the chair cars with sleeping accommodations, for which a special fare is charged. (See ninth chapter.) They contain a main space for thirty-two passengers and usually two state or drawing rooms, each for two or three persons. Connected with the main part are two toilet and wash rooms, as well as a small smoking-room. The drawing-rooms are also placed at the ends of the car. In addition to these two types of railway carriages, there exist special observation cars, etc., for the use of which a special fare is likewise charged. As already mentioned, the well-to-do American makes use of the Pullman car almost invariably. Following this custom, we were obliged to pay many an additional fare. It was only in the suburban excursions and on trips be- tween neighboring cities (as, for example. New York- Phil- adelphia) that we met in the chair cars a better class of people. Unfortunately, the chair car does not lend itself to a speedy exit, especially with reference to the way traf- fic. To obviate this deficiency the Illinois Central Rail- road has ordered compartment cars to be built that closely resemble those employed on the Berlin elevated roads. This was a step in the right direction, as the company will thereby be enabled to cope with its immense way traffic in and around Chicago. As regards these compartment coaches, one is tempted to consider them reproductions of 70 the Berlin cars. The Americans, however, contend that the BerHn cars were unknown to them, and this in spite of the fact that one of them was exhibited at the St. Louis World's Fair in 1903. The only deviation from the Ber- lin model is that the cars of the Illinois Central Railroad have two aisles. At present experiments are under way to find a method by which the conductor may be enabled to open and close the compartment doors by simply touching an electric button. More recently the Pullman Company has constructed carriages after the model of the European compartment system. We had occasion to see a train of this kind at the World's Exhibition in St. Louis. On the route from St. Paul to Portland we traveled on a similar one. With ref- erence to interior furnishings and comfort the train on ex- hibition appeared to come up to the highest expectations, while European first-class trains are equally good; but the rates charged in America are a great deal higher, and for this reason the Pullman compartment carriages with their luxurious equipment will not be patronized to any large ex- tent by the traveling public — at least, not in the near future. The fact that the steps are fastened to the vestibule of the Pullman car was pointed out to us as a great advantage. They are hidden under the platform while the train is in motion. As soon as the train enters the station the bridge covering the steps is pulled up. The steps themselves are broader and much more convenient than those used in Ger- many. As the stations are not provided with platforms, the Pullman porters carry footstools along, which they place close to the steps. It is gratifying that on most trains the water which is intended for drinking, washing and toilet use is not only 71 kept under sufficient pressure, but also often renewed. For this purpose there are tanks on top of the cars which during stops are filled with water by means of a hose. The ice necessary for the cooling of the drinking-water is likewise frequently renewed. On all American railroads much at- tention is given to the water supply. As a rule, there are in the smoking apartment of a Pullman sleeping car three or four sufficiently large wash-basins placed side by side, and separated from it by a partition are the toilet-rooms for gentlemen. Towels, small in size and to be used but once, may be had free of charge and in any quantity. The so-called endless towel has been banished as unclean from the Pullman cars. Good toilet soap is supplied gratuit- ously. The ladies' compartments contain similar accommoda- tions. If the German tourist is, in spite of all this, dissat- isfied with what is offered here and which must be desig- nated as good, the reason for it will be found in the manner in which it is offered. It is certainly anything but pleas- ant if we are obliged to wash and dress in the company of perfect strangers, after we have waited in the same room for half an hour or more, until it is our turn. The very sight of those who wait for us in turn makes us hurry in- stinctively. All this, to be sure, does not affect the Ameri- can in the slightest degree; indeed one may watch several of them calmly going through the process of shaving. As there is plenty of time he waits until his turn comes; nor does he object for this reason to the comparatively small number of wash-basins. We were surprised to find the air in the morning quite pure, and this in spite of the fact that there were occasion- ally as many as thirty persons in the car. It is to be re- 72 marked, however, that we traveled during the warm season when ventilation was easily effected. To this end it was not necessary to open the windows, as each car is supplied with diminutive windows close to the ceiling that will admit sufficient air without producing a draught. These open- ings are covered with wire screens that keep out smoke and dust — in part, at least. In addition, many of the car windows are provided with such wire nettings, and as a further protection there are on the outside of the car open- ings small wooden boards or disks, not unlike those used on bicycles and other vehicles as protection boards. Double windows are also frequently resorted to. Clever as all these contrivances may be, we have to find fault with the arrangement of the windows. Their position is so low as to make it practically impossible for even a person of me- dium height to look through them while standing upright. The tourist who is not familiar with this kind of window is sure to bump his head against it while stooping to look through. Moreover, the manner in which windows are opened is to our ideas quite awkward; they are raised in- stead of lowered. Strange enough, there is no sign of any attempt being made to introduce something better, not even in the latest palace trains with their otherwise superb equipments. The personnel of the Pullman car consists, as far as we could see (train crew excluded) entirely of colored people. The service is, on the whole, satisfactory, although the perspiration peculiar to that race is offensive to many. Partaking of the American spirit of democracy, the negro is liable at any time to seat himself beside the traveler and to try to engage him in conversation. If he does not hap- pen to be busy he will regard himself as much of a gentle- man as anybody else. Yet, after all, the service gives sat- isfaction, there being ordinarily at least two waiters in at- tendance in each coach. In contrast with European usages it is not customary in American hotels — at least, not in those of the older type — to offer accommodations in the way of polishing the shoes of the guests. In the Pullman sleeping cars it is just the reverse. Here the colored servant shines the shoes of the traveler, brushes his wearing apparel, and, when he leaves the train, his hat ; as a matter of course, he expects a tip in return for all this. Any comparison of the service, as it exists in the Eastern and Western States is decidedly in favor of the former. The Pullman accommodations, as Americans call them, are sometimes the very opposite of what one might expect. We discovered this to our sorrow on the trip from San Francisco to Denver, which we made on the Atlantic Ex- press. The uncleanliness and the behavior of the attend- ants beggared description. At Ogden we were forced to surrender a drawing-room which we had engaged and paid for to another party, it being claimed that he had rented it ahead of us. Accordingly we had no choice but to pass the night in the main Pullman car. Rest and sleep were out of the question, on account of the noisy conversation carried on between an intoxicated white conductor and a passenger in the same condition. Both were in the smok- ing-room, which was separated by a curtain from the rest of the car. As if this annoyance were not sufficient, the conductor did not pay the slightest attention to any bell- calls. Thus one of the passengers rung the bell exactly nine times without meeting with any response. Up to ten o'clock the next morning the smoking compartment had 74 not been cleaned, its floor being covered with whiskey bot- tles, cigar stumps and ashes. People who endure such treatment uncomplainingly must possess both wonderful patience and a still more wonderful love of their railroads. To travel in the same room with sometimes as many as thirty persons is a questionable pleasure even during day- time, but at night matters are a great deal worse. It can- not be anything but disgusting, for men not much less than for women, to spend a night in one of these cars. The only consideration shown to the latter is that smoking is strictly prohibited. Although many ladies travel without male escort, no attempt is made to separate the sexes. It happens that one and the same section of the sleeping car, with the same curtain in front, is occupied by a gentleman in the lower and a lady in the upper berth. If American women will condescend to travel alone under such circum- stances, and that with perfect propriety, we must see in this fact nothing but a manifestation of a trait of character pe- culiar to her, which makes her view things in a light quite different from ours. The salient point of this trait of hers consists in her emancipation from conventional notions and time-honored customs. A foreign visitor will find much food for thought, if he chances to be a close observer, though it may often be of an unedifying nature. Thus, for instance, there appeared on the floor of the car outside of the curtain, which concealed an elegantly attired lady, two feet arrayed in brown silk stockings, one of which dis- played a large hole with the big toe peeping through. Even though this train was not to be considered one of the best, we are convinced that the American mode of traveling can never be placed on a level with that on Ger- man railroads. Indeed, nothing short of a blind and un- 75 thinking predilection on the part of a German for every- thing foreign, no matter how bad, will ever induce him to render a favorable verdict. Only the latest palace Pullman trains appear to be up to date in the matter of illumination. On these trains it corresponds to the equipment that has been installed in Germany for a long time since on many of the express trains and which provides a small electric lamp above the head of each passenger. In general, even the palace trains content themselves with the so-called Pintsch gaslights which are to this day heralded, in a rather ostentatious manner, as something particularly wonderful — as, for ex- ample, on the palace trains of the Baltimore & Ohio Rail- road. A large number of otherwise good trains confine themselves to oil, by which illuminant the reading of a newspaper or book is almost impossible. We found the lighting of ordinary passenger cars quite faulty. Going from Buffalo to New York in an express train we were not able to read large print, even while standing up, so poor was the light. Generally speaking, every comfort seems to be ban- ished from passenger trains that are composed solely of ordinary cars, with the exception, perhaps, of slowly mov- ing trains used in suburban and way traffic. The wish to add to the comfort of the traveling public in every possible manner is, however, manifested, as far as ordinary cars are concerned, wherever competition exists. Where it is lacking one is not seldom tempted to believe that the com- pany wishes to prove the opposite, not only for the sake of preserving its own rolling stock, but also in order to com- pel the public to use Pullman accommodations. Such 75 trains leave much to be desired with reference to cleanU- ness, interior furnishings, water supply, etc. The transformation of the Pullman cars into a sleep- ing-room is effected in a rather expeditious manner. Two opposite seats form the framework for the lower berth, while the upper one is constructed by means of a special contrivance permanently attached to the wall. The upper and lower berth combined are called a section. If both beds are in use, dressing and undressing is quite inconve- nient, as it has to be done in an almost cramped position. Moreover, there are no adequate accommodations for the putting away of one's clothes. On the other hand, the beds are of a better quality — and, above all, wider — than those employed in the German sleep- ing cars. They afford room for two persons, who, to be sure, are more jammed in that case than is a single person with us. As the price charged for two persons is not much higher than for one, many of the poorer passengers share their berth with some relative or friend. The well-to-do American, however, will frequently hire a whole section for himself alone and thus procure sufficient space to insure his comfort. But even in that case he is unable to secure per- fect privacy. Even the heaviest curtain in front of a berth fails to afford it to a sufficient degree. We are informed that of late there have been installed some sleeping cars on the electric express trains in Indiana and Ohio on which these drawbacks have been avoided. By night the car is partitioned off into single sleeping apartments, and this is done by rolling up from underneath the floor, where they have been kept during the day, thin wooden walls. This process closely resembles that which takes place when we roll up and down the cover of a roll-top desk. No railroad 77 has as yet introduced this innovation. The longitudinal arrangement of the bedsteads, which is spoken of in an- other chapter, must be regarded as an advantage of the American cars. The same arrangement has been observed in the drawing and state rooms, compartments which bear close resemblance to ours. This method greatly reduces the jar consequent upon the motion of the train, and affords the traveler a better rest than is the case in our sleeping cars, where the beds are placed crosswise. The smooth and even motion of the cars due to their heavy weight, tight coupling, alternate joint of rails, as well as the greater number of ties, would actually signi- fy a high degree of perfection, provided these good results were not partially offset by certain disadvantages of the American railroads. In this connection we must first mention the signal valves used for sounding a whistle in the cab, and, secondly, the almost continuous din kept up by the locomotive bells, particularly when passing over crossings or approaching stations. The ringing of bells is exceedingly grating on one's nerves, especially at night, with the noise of one's own locomotive being augmented by that of others which chance to be near by. A change in this direction may not be hoped for as long as the safety appliances of the railroads are not mate- rially improved upon. It is more than likely that by rea- son of their really prosperous condition the companies of the Eastern and Middle States will be the pioneers in intro- ducing the necessary improvements. As to the West, lit- tle may be expected just yet. Who can deny but that in the Western States these drawbacks are intensified since, owing to the enormous distances, a traveler is often com- 73 pelled to spend several days and nights on the train, some- thing which is in itself quite fatiguing. Although of fif- teen nights spent on trains we passed but few in the general sleeping-room, we could not refrain from thinking that traveling under such conditions is anything but a pleasure, and this notwithstanding the fact that Americans journey- ing in Europe boast of the enjoyable traveling in their own country, no matter how great the distance to be covered may be. Very disagreeable, as has been mentioned before, is the jerky manner in which locomotives and cars are coupled — a still pronounced defect of automatic coupling. MOTION OF CARS. On the other hand, it will not be disputed that the pas- senger cars run more evenly and smoothly than those on the German railroads. While experts generally coincide in this opinion, they disagree as to the causes of this phe- nomenon. One attributes it to the exclusive employment of long and heavy cars running on trucks (ordinary pas- senger coaches are equipped with at least four, all Pull- man cars with six axles), another to the solid construction of the road-bed. As regards the latter, we may quote the testimony of an expert who in 1903 was commissioned by the English government to visit the United States. He thinks that the much-frequented lines in the Eastern and Middle States compare most favorably with the English roads, especially in regard to the quality of the road-bed. Whether this is generally true and to such an extent we are unable to say, as our knowledge of the condition of 79 English roads is not sufficiently specific. However, we are prepared to say, without claiming for our opinion the value of an authoritative judgment, that the character and main- tenance of the road-bed on those American routes which we have examined produced altogether a good impression. This applies also to most Western lines, although otherwise these lines are deficient in more than one respect. Thus the quality of bridges leaves much to be desired, and grade crossings, as well as the accommodations aflforded at the stations, present in many cases a decidedly primitive char- acter. It is noticeable that the ties on American railroads are placed very close to each other, and this holds good even of those lines that enjoy a lesser degree of prosperity. While in Prussia there are distributed over a kilometer from 1,038 to 1,500 ties, their number averages in America for the same distance from 1,535 to 1,754 in case of heavy rails, and 1,973 i^ case of light ones. American ties, how- ever, are mostly shorter and narrower than German. They are composed almost entirely of hard wood — oak, chestnut, or pine — the latter seemingly surpassing our pine wood in quality. Taken all in all, American rails are not any heavier than ours, but preparations are now on foot to replace on the trunk lines the rails weighing from 39.56 to 42.03 kilo- grams by others weighing 49.45 kilograms. Lastly, it is to be remembered that, in place of the even joint of the rails in use on German roads, American rail- roads have, with few exceptions, such as the Northern Pa- cific line, introduced the so-called alternate joint of rails. The point of difference between the two systems is that with the alternate joint the end of one rail is opposite the 80 centre of the other, while with the even joint the ends of both rails are opposite each other. Many people are inclined to trace wholly to this method the smooth running of passenger coaches, and to ascribe their jerky motion to the even joint used on the German lines. A prominent civil engineer of German extraction, whose business permitted him to watch constantly the working of both systems, expressed himself to us as fol- lows : "My opinion is that with ballast and a reasonable heavy rail the alternate joint is preferable, and I believe the majority of the larger railroad companies use it. The Northern Pacific and some other roads use the even joint on tangents and the alternate joint on curves. An equal expense of labor for maintenance on the same character of track will in my opinion produce an easier riding track with the alternate joint." Thus he thinks that an easy mo- tion of cars always presupposes a well-kept road-bed, and that with an equal expense of labor for maintenance on the same character of track the alternate joint will produce an easier riding track than is the case with the even joint. Another leading engineer connected with a large rail- way system expressed himself in writing on this subject. He sent us the following letter : "In reply to your letter of the 4th inst., concerning the information of Mr. F. S. on the conditions of alternate and even joint of rails, I wish to state that, in my judg- ment, the former is to be preferred. "The alternate joint affords a more even motion and reduces the cost of maintenance. With the even joint, rails are apt to form an angle at the place of joining, es- pecially on very moderate curves, for which the rails have 81 not been bent. With the alternate joint there is always a solid rail opposite the joint on the other side, to hold the track to line. "The superiority of the alternate joint in keeping up the direction on curves has been proven and recognized by the management of several railroad companies that use both methods — alternate joint on curves and even joint on tangents, half a rail length before and after each curve. If the curves follow closely upon each other, the uninter- rupted employment of the alternate joint is the rule. "On tracks with alternate joints jarring becomes less noticeable with increasing speed. This may be accounted for by the fact that the car has no time to swerve in the direction of the rail joint. On tracks with even joint, on the other hand, the jolting under both wheels is plainly perceptible, and this because of the parallel unevenness. With the even joint the car has to suffer the full effect of this unevenness on the two rails ; with the alternate joint only one wheel has to pass the unevenness, while the opposite wheel is held on the exact level close to the rail on the other side, consequently the swerving of the car is re- duced by one-half. "If rails could be joined perfectly with absolute smoothness in the joints along the whole track, the kind of joint to be employed, whether even or alternate, would be immaterial, but this cannot be realized in practice. "On curves with even joint and rails of equal length the inner rails must be made to join in close contact, while with the alternate joint the usual cut between the rails on the inner side can be employed. To balance the difference in length resulting from this way of rail laying a corre- spondingly short insert rail can be utilized if necessary." 82 Accordingly, the alternate joint is preferable from an operative as well as from an economic point of view. We wish to add that we found the motion of the cars compara- tively steady, even in cases where the road-bed was osten- sibly in a rather poor condition. It may remain an open question whether this was due to the alternate joint or merely to the style of cars. TRAIN OPERATION AND SPEED. The speed attained by American railroads does not exceed in general the average performance of our express trains. We had no occasion to ride in one of the trains that are pointed out by Americans with just pride as the fastest trains in the world. Four trains belong to this category. The Philadel- phia and Reading Railroad has, all through the year, a train running from Camden, near Philadelphia, to Atlan- tic City, the distance of 89.3 kilometers being covered in fifty minutes — that is, with a speed of 107.2 kilometers per hour. The Pennsylvania Railroad runs a rival train with a speed of 103.7 kilometers per hour, covering 93.3 kilo- meters in fifty-four minutes. Both trains are called At- lantic City Flyers. Quite as remarkable are the feats of the Pennsylvania Railroad and of the New York Central in connection with the Lake Shore and Michigan Southern Railroad on the routes from New York to Chicago, by way of Pittsburg or Buffalo respectively. The absolute speed attained on these lines is, to be sure, not as great as that between Camden and Atlantic City. Since July i, 1905, one may travel from New York to Chicago, either via Buffalo or via Pittsburg, within the brief space of time of eighteen hours. According to the 83 "Official Guide of the Railways and Steam Navigation Lines of the United States" (November, 1904), the dis- tance between New York and Chicago is as follows: via Buffalo, 1 576. 1 kilometers; via Pittsburg, 1468.4 kilo- meters. The speed of both trains is thus 87.6 and 81.6 kilometers, respectively. They are called "The Twentieth Century Limited" (New York Central) and "The Special" (Pennsylvania). The New York Central Railroad justly calls its train the fastest long-distance train in the world. Yet the performance of the Pennsylvania Railroad is on a par with it, inasmuch as the route New York-Buffalo- Chicago offers no considerable difficulties in the way of heavy grades, while on the shorter route of the Pennsyl- vania Railroad the high Allegheny Mountains have to be overcome, causing a considerable loss of time. The speed has to be increased on the more level stretches to 120 kilo- meters per hour in order to regain this loss. Such speed is made possible only by omitting nearly all stops at inter- mediate points, and whenever a stop is made to reduce it to a minimum of time. Even Buffalo, Pittsburg and Phil- adelphia are not directly touched by these two trains, and connection with these cities may be had only by the means of suburban trains. Moreover, such isolated achievements can never serve as a basis for judging the total performances. A more re- liable index may be found in the rate of speed attained by the through traffic in its totality and not merely on a single line. The table on pages 86 and 87 will serve to throw some light on the relative speed attained by express trains on some of the most important American and German lines. This table considers only such American railroads as are located east of the Mississippi. Their territory is for 84 the most part level and dotted with populous cities. The German lines referred to in the list are by no means more favorably placed as to topographical conditions. A com- parison of the two systems shows the fact that on the Ger- man lines there are relatively more trains (two-thirds of the total) with a speed of 60 kilometers and more per hour than in the United States, and this including the two fast- est American trains. The comparison is still more in favor of Germany when we take into account the more numerous stops made by German trains. If our express trains were run on the through traffic plan, after the American fashion, they would show to still greater advan- tage. With all due regard for the performances of Ameri- can model trains, we are, at all events, justified in main- taining that American trains, even on the main lines and under strict observance of the schedule, do not, in general, run any faster than the German. Since, however, the sched- ule time is in most cases regularly exceeded, we cannot help thinking that the extraordinary speed alluded to exists more or less on paper only and in imaginations. (Com- pare also Goldberger, "The Land of Unlimited Possibili- ties.") Punctuality appears indeed, as will be shown later, to be a weak point in the American railroad traffic ; in this re- spect American railroads are doubtless inferior to the German lines. We will not discuss for the present to what extent the facilities of American railroads are inade- quate to meet requirements. On either side of the Atlan- tic traffic is growing at a ratio often little anticipated, and it is not easy to be prepared for any emergency as amply as might be desirable. 85 M 1 1 1 1 1 1 1 VO S ■^ 1 00 1 1 1 1 1 to 1 1 1 1 1 1 1 "-< (M 1 1 1 1 1 1 r* § 1 00 iH 1 1 1 1 1 1 o cd '"' 00 'a W) 00 1 1 1 1 1 1 1 g -3 ST! 1-^ «o 1 1 1 1 1 \ 1 "^ 1 i t^ 1 1 1 1 1 ■♦J > 1 1 1 1 1 1 -^ 1 o 1 1 1 1 1 1 i-H rH .•3 o\ 1 1 1 '-< 1 *-l 1 1 M ■§«; |§ °S iH 1 1 iH 1 CM j3 ii 1 1 O 3 3 ^ u 1 5 j 1 1 Npq •* b to ■^1 1 1 a S 1 1 1 1 1 1 ^3 1 1 lO to 1 1 1 •* l> 1 1 s-1 3 rH 1 1 M 1 fO 1 1 m \ \ \ \ r-t y~\ •3 i 3 B 1 1 >o 1 1 1 1 i-3 •3 " Mrt 1 N 1 1 1 «5 IS s o z 1 1 1 1 1 1 1 1 o •-I 1 1 1 1 iH « o 1 1 lO a; 0, 1^ Speed of 60 km per hour and more Number oort 1 00 t^ § § "5 s Tj-lO Number of Express trains rt ■* PO (M '«1 tH rH tH 3 .. a ft £ U VO ^ 1 .2:25 VO VO 6i ■>* NiH 0\ n V, ■*■* t^ t^T-T tj 00 r-t lO 0^ O VO ^ VO VO VO Mi 00 00 1^ l>OM>00 00 rH N NN . . . . . • B be ;• ^ i 1 Liu Ma 11 8£?£?S 1 fM a stx o s 0.Q In 86 1 1 1 1 III II 1 rH 1 1 1 1 III II 1 i-( 1 1 1 1 III II 1 t-H 1 1 1 1 III II 1 iH 1 1 1 1 III II 1 IM 1 1 1 1 III II 1 ?-« 1 1 rt I-( III II 1 ^ 1 1 1 - 1 1 1 III t-H 1 1 1 ^ 1 1 1 II" ■<* 1 1 1 1 1 1 ^ ^ 1 1 W5 1 1 *"* 1 III 1 iH * *H CvJ r-t 1 tH r-( 1 II 1 VO 1 -^ 1 1 1 -^ 1 II 1 (M 1 1 1 -" 1 1 1 II 1 »H 1 1 1 ^ ^ \ ^ II 1 rO to ro ^ \0 rt m c^ Tl-rH ■* CO 3 lOON ''^"^ '^^'l '^^^^ '^'~' 'oC oobON* cvrbio "nTSB 2 ° ■*«"' ^ llO tO°"l 00°00 COOOO 0\ <3\ loO S| «.2 a» T E? I ^ fi g .Bf ..J " lO M ■S'*5 O M CI.S S o S > n M n 87 fiS^ .g 53 S .9 •3.2 n ^ S TRAIN DISPATCH AND STATION MANAGE- MENT. With reference to the railroad time schedule, we have noted principally two deviations from our methods, one pertaining to the compilation of the time-table and the other to the local administration of the service. In the matter of the time schedule system the rail- roads of the United States differ from the German. The German time-tables are compiled twice a year, and they are made up so as to assign to each passenger and freight train a distinct position which can be ascertained without any trouble. By accounting for crossings and rights-of- way, each station may, aside from exceptional cases, inde- pendently control and manage the running of each train within its own sphere. In addition, the German time-table provides beforehand for the insertion of a sufficient num- ber of special passenger and freight trains to be used in case of necessity. If such a train should be decided upon, it will run according to a schedule provided for it before- hand. It is evident that such a system involves a great amount of detail, but as precision and order are factors of prime importance in insuring the safety of the traveling public, the labor expended on it will never be wasted. Such a carefully worked out time-table which regu- lates the running of trains with clockwork precision is as yet unknown on most American railroads. To be sure, there exist on some of the lines time-tables which define quite minutely the schedule of passenger trains. More- over, that of freight trains is regulated to some extent; still nowhere in the United States did we find a time-table as elaborate as ours. There the orders of the train dis- 88 patcher often interfere with the working of a fixed and unchangeable time-table. The institution of train dis- patchers provides for a special office under the supervision of a district superintendent. This office receives from the stations telegraphic reports on the run of trains, on the strength of which it issues its orders, particularly in regard to crossings and right-of-way. Each office employs as many men as are necessary for the work. Usually there are three dispatchers in an office, of whom one at least must always be present ; not infrequently they are subordinate to a chief dispatcher. The train dispatcher originates from the time when the telegraph had not yet been placed in the service of the railways. (Compare Priestley, "Report on the Organiza- tion and Working of Railways in America." 1904.) As agent of the superintendent, his duties consisted in convey- ing orders to the train crews by riding back and forth over his district. A fixed time-table for the whole line did not exist. With the introduction of the telegraph, which in- novation was at first confined for economical reasons to the more important stations, the train dispatcher became more stationary, as he now sent out his train orders from his office, which was in communication with all the other tele- graph bureaus along the line. This method has not been departed from, although, in view of the mighty progress made everywhere in the intro- duction of mechanical safety devices, individual American stations should be capable, as much as ours, to assume full responsibility for the proper running of their trains. In that case, however, the companies would be obliged to lo- cate also at the stations officials who are responsible for the passenger traffic. Wherever the switches are concentrated 89 and the safety of the train service is assured by mechanical functions, the train regulations are much like ours, yet even in cases of this kind the train dispatcher will fre- quently interfere. In the Western States, in which trains follow one another at long intervals only, his power seems to grow with the scarcity of trains. Another peculiarity manifests itself in the unmistak- able antipathy of Americans to the use of graphic time- tables after the German pattern. The graphic form is sometimes employed for official purposes only. Apart from this one may look for it in vain along the whole line. The dispatcher and his subordinates act in the main from memory, and, as told in some other chapter, without the employment of Morse telegraph tape. The only pre- caution taken is that all directions are jotted down and telegraphed back, and at the stations — that is, at least, in cases of blockades and other irregularities in the traffic — these orders must be countersigned both by the conductor and engineer. The dispatcher makes a memorandum of all these notices. Printed time-tables which we found at the stations had reference to the passenger traffic only ; in isolated cases a daily freight train was mentioned in the schedule. Gener- ally speaking, this part of the service is left to the discre- tion of the telegraph operator at the station, who is, of course, subordinate to the train dispatcher, and they can put on more trains if needed or take off the only one on the schedule; such is his authority. Of prime importance for the regulation of the service is the classification of the trains and wild-cat locomotives, according to their importance and their place of prece- dence, as well as the right-of-way principle. On single 90 tracks a train which is behind time may easily lose its right-of-way even to trains coming from the opposite di- rection. This explains in part, at least, the considerable delays which some trains are made to suffer. The right- of-way principle may be correct, provided the delays are exceptional; but under conditions such as exist to-day in the United States, it is positively detrimental to the effi- ciency of the whole service. Although the American regula- tions prescribe this principle only in so far as it relates to passenger trains governed by a fixed schedule, it cannot be denied that the freight traffic often seriously interferes with its execution. Thus, within our own experience, we had occasion to observe how the passenger train on which we rode lost the right-of-way in consequence of a delay caused by a freight train. Quite objectionable appears to us the practice that a headway of two stations only is generally allowed for pas- senger trains, and even then is not always observed. Freight trains come under this rule only exceptionally. While traveling in the West on one of the famous limited express trains we noticed two freight trains on a consider- able down grade following in our trail at a very short dis- tance. These freight trains were separated from each other by less than a train's length, the one nearest to us be- ing drawn by two locomotives and pushed by a third one in the rear. The time-tables do not cover, as a rule, the whole ter- ritory controlled by the company, but are only compiled for the district of the superintendent, so that every district is- sues its own schedule. It is evident that such a system constantly calls for an adjustment between two districts whenever anything happens to a train beyond the district 91 line. Since, with the growth of traffic, the local area of the district has become more and more restricted (we en- countered some which were barely fifty kilometers in length), the system will at times work rather clumsily, the more so as reporting is a great deal more complicated and extensive than with us. Ordinarily each of the three dispatchers must work for eight consecutive hours. He is assisted, on an average, by three telegraph operators, who mostly work ten hours a day. With heavy traffic the number of telegraph opera- tors is increased in order to enable them to perform their many duties. Among other things they have to keep a daily record of in and out going freight trains. At any rate, it is certain that the telegraphic service has assumed proportions that, in our densely populated districts, would lead to something almost impossible. We must keep in mind that each station of importance has to report every train, the dispatcher in turn making a note of it. On branch lines, particularly in the coal districts, a special dis- patcher will occasionally be met with who is given full charge of the service, independent of the superintendent. Here the telephone is gaining ground more and more. STATION MANAGEMENT. Not less at variance with our system is the practical management of stations. The supervisory activity of the dispatcher precludes beforehand the function of a station master with the prerogatives and duties of this German offi- cial. One cannot fail to notice at American depots that there is nobody who on the arrival, stop and departure has authority over the trains. The station agent as well as the station master, in so far as such officials exist (mostly only 92 in large — that is, Union Depots), have duties of a differ- . ent character, being principally engaged in the inner or administration office. They are not held responsible for the maintenance of the schedule, nor do they exercise any authority over the trains and their crew. The train con- ductor has charge of all these details, but he generally lacks the time to bother about things that form part of the duties of the German station master. The information bureau, which may be found at all the larger stations, also has noth- ing to do with these affairs, as its purpose is to give infor- mation about fares and train connections. Consequently it is, as a rule, managed by officials who belong to the ticket agent class. Whether these bureaus are a success and its officials up to date we are not prepared to decide. How- ever, at St. Louis we received wrong information, although one should expect that, on account of the World's Exposi- tion, special pains would have been taken to select for that office competent men only. Thus it happens that the traveler seeking information will find nobody on the platform whose duty it is to furnish it on inquiry. While at Ogden, to quote but a single ex- ample, we were unable to learn, notwithstanding all our efforts, whether a certain train, on which our baggage had been put by the mistake of our valet, had passed the station or not ; each one of the officials had a different answer to our inquiries. Small wonder that, with such an imperfect sys- tem, irregularities are practically unavoidable, notwith- standing the greatest possible adroitness and cleverness on the part of the American people. Nevertheless, even American railroaders regard the European station master as little better than a mere policeman who holds the trav- eling public by the leading-strings and who is therefore out 93 of place among self-reliant Americans. In the first place, the American wants to be free; yet even at large stations we saw passengers get off on the wrong side of the train and walk across the track by mistake. When the train is about to leave, the conductor con- tents himself with calling out "All on board !" and this in a voice audible only to those nearest him. Usually the train starts in motion immediately after, even when the stop has been shortened on account of delay. If a passenger does not succeed in getting aboard he runs the risk of being left behind. On one occasion this happened to our own serv- ant, and this, in connection with other incidents which we witnessed, taught us to be cautious and to keep close to our car. At large stations, especially at terminal stations, big slates are used to announce the departure of trains, while at others the megaphone serves the same purpose. Only in rare instances we found time-tables or other directions inside the cars. IRREGULARITIES AND ACCIDENTS. The manner in which the service is managed and the carelesseness of the public is unquestionably one of the causes responsible for the disproportionally large number of accidents occurring on American railroads. From July, 1902, to June, 1903, there were killed 163 passengers and 749 employees, while 1,688 passengers and 9,108 em- ployees were injured. In Germany, during the same pe- riod, only 127 private persons and 158 employees were either injured or killed. Here we must bear in mind that American statistics, as far as they relate to railroad acci- dents, cannot be considered as absolutely reliable. There 94 exists, to be sure, a general ordinance, requiring the com- panies to notify the authorities of all such casualties, but they are said to give such information rather reluctantly. The powers vested in the Interstate Commerce Commis- sion are hardly sufficient to effectually enforce this law. The statistics quoted in the foregoing refer only to such casualties as arose from the indifference and careless- ness of the traveling public. Still larger is the number of those accidents which happened to passengers without any fault of theirs. At railroad disasters there were killed 176, while 4,665 received injuries; through other opera- tion causes 16 were killed and 1,878 injured. The corre- sponding German statistics show only 4 persons killed and 165 injured. (More complete figures will be found on pages 106, 107 and 108.) All these accidents must be attributed, for the most part, to the managament of the service, for, according to our conception, the American method is bound to result in all kinds of irregularities as well as derangements of the schedule. The latter are of such frequent occurrence as to be taken by the people as a matter of course. In sub- stantiation of this we have already mentioned the fact that, aside from suburban traffic, we succeeded in arriving on schedule time in but one solitary instance. This is the more surprising, as on our tour of 15,563 kilometers we chose, almost exclusively, the fastest and best trains. Even on the trip from Philadelphia to New York (145 kilome- ters), on one of the best trains of the Pennsylvania line, we were five minutes behind time. On an average, delays range much higher, and they may be computed by hours. Notwithstanding all this, expressions of annoyance and displeasure, such as may be heard in Germany, be the 95 cause ever so trifling, are exceedingly rare. To illustrate this we mention the following episode : On our trip west- ward, which we made on the North Coast Limited, one of the best and fastest trains in the United States, our train was forced to stop, about 9.30 in the morning, midway be- tween Rosebud and Forsyth, a derailed heavy freight car obstructing all passage on the single track road. Our train backed up to Rosebud station, a distance of many kilo- meters. Without in the least losing their good humor, the passengers left the cars and set about to while the time away as well as they could. Some improvised a target range, using their revolvers, with which many travelers are equipped even nowadadys, while a number of young ladies and gentlemen hired a couple of horses from a near by farm, taking turns at horseback riding, and so forth. A wrecking train did not pass by until 2.15 in the afternoon, and still there was no sign of impatience or dis- satisfaction, although the situation afforded ample cause for complaint. In the first place, it must have been clear to any one acquainted with the conditions of the road that either the crew was not sufficiently prepared to cope with a mishap of this kind, or that the affair had been consid- ered as of too little consequence. Moreover, the stations which could send wrecking trains were too far apart; in our case it had to travel a distance of 112 English miles, or 180 kilometers. The derailed car had a capacity of forty tons; had it been a smaller sized car its removal could have been effected with much less difficulty. This incident served to show the disadvantages resulting from the use of cars of such large size. At last — it was 4.15 in the afternoon — our train could continue its journey, after hav- ing been delayed almost seven hours. All connections 96 with other trains were lost, especially that to Yellowstone Park, the destination of most of the tourists. This mis- hap afforded us an opportunity to watch the extraordinary speed with which the hand cars of the road masters are able to move along the tracks. Whether the companies are making efforts to have the trains conform to schedule we could not find out, princi- pally because there were no records obtainable. Nor has the percentage of accidents decreased. According to the statistics issued annually by the Interstate Commerce Com- mission, the number of casualties on American railroads has grown considerably, both absolutely and relatively. Comparing 1902 with 1888 the increase of deaths is 86 per cent, and of injured as high as 196 per cent. It appears that the American people, in spite of good sense and practical ability, are not fully aware of the causal relation existing between accidents and irregulari- ties in the traffic — viz., non-observance of the schedule. The conviction that safety in the railroad service is based chiefly on the most scrupulous punctuality and untiring at- tention to minute details has taken hold of the bulk of the German people, and it is this attitude which accounts for the comparative immunity of their railroads from casual- ties. A large percentage of accidents is due, as the tables will show, to the fact that grade crossings are not properly guarded; even at much-frequented crossings few or no precautions are taken. Signs containing the inscription "Railroad Crossing" or "Look Out for the Locomotive" are utterly inadequate to meet requirements, and the results are shown in numberless suits for damages. The sums 97 the companies pay out annually in indemnities reach a fabulous amount. MECHANICAL SAFETY DEVICES. On approaching a crossing trains sound their whistle and ring their bells; other danger signals, such as signal boxes, are little used. However, neither the whistling nor the ringing of the bells seem to be very effective as a warn- ing because, as already stated, the accidents are very nu- merous. On the other hand, American inventive genius has accomplished much in the way of promoting, as much as possible, the safety of trains by means of mechanical de- vices. Their automatic signal boxes and electric safety appliances differ materially from those employed on the German railroads. These devices are described in detail in Scholkmann's book, "Die Eisenbahn Technik der Geg- enwart," as well as in Glaser's "Annalen fuer Gewerbe und Bauwesen." Foremost among the causes which induced the American railways to inaugurate a system of auto- matic appliances, we must regard the difficulties with which they had to contend in securing suitable employees for that very numerous class of stations which are located in out of the way places. Their block system regulates the running of trains by automatic signals, in which the track is divided into sections called blocks, on any one of which, ordinarily, only one train at a time is allowed. By means of this system the train is enabled to open and close an electric circuit and to operate through it the semaphore, giving danger and safety signals. It is obvious that such contrivances will often give out, and as they are not con- stantly tested, they may not always be relied upon. An 98 impairment of the conduits and batteries, as well as at- mospheric electricity, may easily cause serious disturb- ances. Such disturbances will play havoc with the block signals as given by the semaphore, and it may happen that the signal indicates danger although the track is clear, and vice versa. Under such circumstances the avoidance of accidents will be little short of miraculous. The railway companies have taken due cognizance of this unreliability of the signal system, and they have ex- pended what are for German circumstances very large sums of money for the purpose of securing a safe signal system on the automatic block plan. Nevertheless, these signals often prove ineffective — at least, according to the German standard ; yet American experts consider the num- ber of instances where the system failed to work as small. Thus, for instance, on the occasion of the International Railroad Congress, which convened in Paris in 1900, the American Civil Engineer Carter, of the Chicago and Northwestern Railroad, has, in praise of the automatic block system, put stress on the fact that out of 4,813 block signals given, but one proved to be misleading, and this with but every twenty-fourth train. Moreover, out of 900,000 to 1,000,000 signals, but one was of a character involving a real menace to the service. In view of the mil- lions of block signals given daily on the German railroads, the percentage of' accidents will grow considerably if the proportion of disturbances were to correspond to that tak- ing place on the American railroads. Such, however, could not happen under the German system, since in case of a defective signal, employees will always be on duty to insure the safety of trains by special precautionary meas- ures. As a matter of fact, such signal disturbances are ex- 99 ceedingly rare on the German railways, and to pass by a dan- ger signal is permitted only by special order of the station master given in writing. On the American railroads, however, the engineer may pass any danger signal, pro- vided that he slack up and continue with reduced speed until another signal indicates a clear track. How deceiv- ing this signal may be has already been illustrated. As a safeguard against accidents at stations, most railways of the Eastern States, but not as yet to the same extent those of the West, have installed switchboards, which are managed by operators ; they are quite similar to those used at German depots. At the larger stations these switch- boards are frequently operated by mechanical means, es- pecially compressed air. In point of effectiveness and reliability these switchboards are, according to expert opin- ion, by no means superior to the German ones (see Scholk- mann's book, "Modern Railroad Technics"), At all events, in the United States these safety devices have not found, even remotely, as wide an application as in Ger- many. PERSONAL SERVICE. Of all the appointments peculiar to American rail- ways none seems to us more commendable than the personal service in the trains in the eastern part of the United States. We refer here especially to the Pennsylvania, the Baltimore and Ohio, the New York Central, and the New York, New Haven and Hartford railroads. It is not only the dining cars and their interior fur- nishings that compare favorably with ours, but, above all, it is the food, its preparation and manner of serving, as well as the service generally, that are deserving of the highest 100 praise. Our railroad caterers would do well to adopt the American plan. The seats on both sides of the dining car are arranged in such a way as to leave a passage in the centre; besides, each person is allotted more elbow-room than is customary in Germany, the tables being broader and the chairs larger. The inner equipment of the cars is both comfortable and pleasing to the eye ; in general, walls and ceiling are wainscotted with wood. In the walls there are niches, containing bunches of fragrant flowers, the tables being likewise frequently adorned with nosegays. In front of the partition separating the kitchen from the din- ing-room there is a bufifet, from which, in the style of many of our restaurants, cordials and other drinks are served to passengers. The table-cloth, napkins, china, forks, and knives, etc., are, as in high-priced American restaurants, of faultless quality, and the general impression one re- ceives is that of a first-class restaurant. Tallying with this impression is the quality and variety of the refresh- ments, both solid and liquid, as well as the appearance and the conduct of the waiters, and, last but not least, the scru- pulous cleanliness perceptible throughout. Although most of the waiters are negroes, it must be admitted that their ease and skill, no less than their immaculate white attire, produce the best impression. A white man directs their work, to make sure that it is properly carried out; he has also charge of the accounts. The service is altogether prompt, one waiter, on an average, being assigned to three tables. As there is plenty of help, food will be served on short notice ; in one of the car kitchens we saw no less than five cooks at work, every one a negro. But once, on a night train from Boston to Buffalo, we were obliged to wait for some time, and it was with difficulty that, in the lOI end, we secured a light supper shortly before the train came to a stop. The rates charged in the dining cars are rather mod- erate, and they correspond to those of a good restaurant. On many cars the price for a regular dinner is $i, and it is this proposition which appeals particularly to travelers with a good appetite, as it entitles them to select freely from among the many dishes contained on the bill of fare. The latter is usually artistically arranged, and in season always includes oysters. This style is evidently borrowed from the so-called American plan of hotels. Where it does not exist — that is to say, where meals are to be paid a la carte — the railway administration meets its patrons by serving half-portions to a single passenger. This is quite contrary to American customs, inasmuch as guests are usually served with full portions, for which they have to pay accordingly. The liquid refreshments are of an excellent quality, well kept and reasonable in price. Far from being compelled to patronize the bar, the American habit of using ice-water with the meals is invariably observed, even in the dining cars. This first-rate management of dining cars is not at all confined to the so-called limited trains — that is, trains which, like the German palace trains, accommodate but a limited number of passengers on payment of an increased fare; as a matter of fact, we found this kind of service equally good on trains running between New York and Boston, etc. Respecting the Western railroads, however, and in part already on those of the Central States, we met with a deterioration of the service — at least, on ordinary passen- 102 ger trains. Above all, the quality of the victuals contrasts unfavorably with what is ofifered in the Eastern States; be- sides, the lack of variety becomes quite noticeable, espe- cially on journeys lasting several days. Nevertheless, it cannot be denied that even there the service can stand comparison with ours, although the diffi- culties under which it has to be managed are, to some ex- tent, far greater than is the case on the much shorter routes traveled over by German dining cars. Not only is the pres- ervation of food attended with considerable difficulties, in view of the intense heat prevailing for the greater part of the year, but the replenishing of provisions must be any- thing but a simple problem in districts that are thinly pop- ulated. In addition, it happens not infrequently, and such was our experience, that, in case a train has been delayed for a considerable length of time, it will be necessary to supplement provisions, as the supply which would have sufficed for a certain number of meals had given out. After all, we cannot help expressing to the railroads our appreciation of the manner in which the dining cars are managed. The granting of a lease for the service to a caterer, after the German system, in consideration of a certain sum to be paid to the railroads by the lessee, we have found nowhere in the United States. The railroad companies manage the service on their own account by means of a special department, created, as a rule, specially in the central administration. Through inspectors they make sure that the service is kept up to the high standard and does honor to the administration. Trustworthy statistics indicate that the railroad ad- ministrations do not derive any revenues out of this service, and, indeed, they do not intend to. It has even mostly 103 to be subsidized. Thus, the subsidies furnished by the Baltimore and Ohio Railroad average annually about 120,- 000 marks, and its general superintendent told us, to quote his own words, "the money is well spent." It is likely that competition plays a more important part in this matter than the companies are willing to admit. STATIONS, QUICK LUNCH ROOMS, ETC. Touching upon the architecture of railroad stations, both in regard to design and adaptation to practical ends, our observations seemed to show that often they hardly answer to the requirements of the traffic. This may be ac- counted for, to a large extent, by the rapid growth of cities, with which the evolution of transit facilities could not keep pace. Only where several lines have entered into compe- tition — viz., principally in the larger cities — one may ex- pect to come across stations that in beauty of design and general appointments can bear comparison with ours. Although the American is usually quite pretentious con- cerning the style of his home and its furniture, he will, on the other hand, content himself with the simplest kind of a railway station, with buildings that in their interior equip- ments are anything but comfortable. However, with re- spect to lavatories and toilets, even the smaller stations are well equipped. It is seldom that a barber-shop is missing, and this is not surprising, as to the American the tonsorial art is one of the necessities of life, just as is his habit to have his shoes shined outside of his home. The condition on the platforms in front of the stations leaves often much to be desired. In the first place, they are invariably nar- rower than ours, and, secondly, in a majority of cases they 104 can be approched only by walking across the tracks. The ticket offices are, as a rule, located in the general waiting- room. Nearly all the ticket offices we saw were so dark that they required artificial illumination, even by day. Ordinarily a special waiting-room is reserved for women, and at the larger stations also a room for smokers. The restaurant occupies usually a separate part of the build- ing, and it is mostly divided into a dining and a lunch room. Another peculiarity of American railway stations which deserves some passing notice are the so-called "quick lunch rooms." Far from considering them as generally desirable for German conditions, there is no mistaking the fact that their adoption by the German railways would be entirely practicable, especially at junctions with short stops. The outfit of the quick lunch room consists in the main of a long table, laden with all kinds of eatables, around which are grouped many revolving stools, with their one leg fas- tened to the floor. Sometimes the tables and stools are ar- ranged all around a kitchen stove, with the cooking going on in plain sight of everybody. On our journey through the United States we have repeatedly taken our meals in these rooms, and we always found the service to be prompt, in spite of the little help employed. The existence of these lunch-rooms proves that dining cars are not as generally used as many claim. Concerning the high rates charged by American railroads, the excess fares for the use of Pullman cars, the ticket scalpers and the time-tables, the reader is referred to the seventh chapter of this book. 105 Tables referring to page 95. Number of accidents which occurred from 1 902-1 903 on the railways of the United States and on those of Prussia and Hesse. Railroads of the Prussian and Hessian United States railroads (July I, 1902 to June 30, 1903) (April I, March 3 1902 to I. 1903-) Killed Injured Killed Injured Passengers. I. Not responsible. a) at railroad disasters . , 176 4,665 3 128 b) other causes 16 1,878 1 37 2. Carelessness. Getting on and oS trains ■while in motion .... 163 1,688 43 84 355 8,231 47 249 Percentage of accidents in a million of passengers . . . 0,51 11,84 0,08 0,41 Railroad employees and laborers 3. At railroad disasters . . , 855 6,186 8 96 4. a) Lack of caution in getting on and off trains .... 749 9,108 40 118 b) While pushing cars, switch- ing trains and coupling . . While coi uncou 281 ipling and pling 3,551 97 231 c) While crossing and stand- ing on tracks 1,721 41,636 135 108 d) While being careless other- wise in the service . . . -• • 40 100 Percentage of accidents per thousand employees . 3,606 2,75 60,481 45,45 320 0,90 653 1,83 3,961 68,712 367 902 106 statistics from preceding page Outsiders : . Not responsible 6. Lack of caution .... Total of killed and injured Percentage on each million of Kilometers Railroads of the United States (July I, 1902 to June 3o, 1903.) Killed 3,961 140 5,739 5,879 9,840 Injured 68,712 481 7,360 7,841 76,553 On ICO Kilometers 86,393 6,43 Prussian and Hessian railroads (April I, 1902 to March 31, 1903.) Killed 367 10 191 163*) 201 163*) 163*) 568 Injnred. 902 90 144 6*) 234 6*) 6*) 1,136 , 1,704 Exclusive of suicides. 1,873 Including suicides. 50,01 56,44 25,92 1,70 3.38 5,10 Exclusive of suicides. ^ 2,19 I 3,42 J 5,61 Including suicides. 5,37 Exclusive of suicides. 5,90 Including suicides. Statistics of American Railroad Accidents from 1888 to 1903. Year Length of track in Kilo- meters Railroad Employees Travelers other Persons Total Killed Injured Killed Injured Killed Injured Killed Injured 1888 1903 223,825 333,354 2,070 3,606 20,148 60,481 315 355 2,138 8,231 2,897 5,879 3,602 7,841 5,282 9,840 25,888 76,553 1903 contrasted with 1888 + 109,529 + 49% + 1,536 + 74% + 40,333 + 200% + 40 + 13% + 6,093 + 285% + 2.982 +103% +4,239 +118% + 4,558 + 86% +50,665 +196% *) Suicides. 107 Accidents of 1903 that were caused by- Railroad Employees. Passengers Other Persons Total Killed Injurec Killed Injurec Killed Injured Killed Injured Falling off trains Jumping on trains 551 198 5,188 3,920 63 65 493 1,066 449 462 762 1,365 1,063 725 6,443 6,351 = 749 21% 9,108 15% 128 36% 1,559 19% 911 15% 2.127 27% 1,788 18% 12,794 17% Accidents to Railroad Employees in 1903. Killed : 3,606 ; i. e., one out of every 364. Injured : 60,481 ; i. e., one out of every 22. Accidents to Passengers in 1903. Killed: 3SS'y '• ^-j ^^^^ o"' °f every 1,957,441. Injured: 8,231; i. e., one out or every 84,424. Tables showing relative frequency of accidents to railroad employees (a) and passengers (b). In the (a) Railroad Employees Proportion of train crew (b) Passengers Year One One One One One one Killed Injured Killed Injured Killed Injured in every m every in every in every in every m every 1893 320 28 115 10 1.985,153 183,822 1894 428 33 156 12 1,668,791 178,210 1895 433 31 155 11 2,984,832 213,651 1896 444 28 152 10 2.827,474 178,132 1897 486 30 165 12 2,204,708 175,115 1898 447 28 150 11 2,267,270 170,141 1899 420 27 155 11 2,189,023 151,998 1900 399 26 137 11 2,316.648 139,740 1901 400 26 136 13 2,153,469 121,748 1902 401 24 135 10 1,883,706 97,244 1903 364 22 123 10 1,957,441 84,424 108 THIRD CHAPTER. The Systems of Railway Administration and the More Important Relations of Railroad Administrations to Each Other. Groups of Railroads. — Financial Connections and Their Devel- opment. — Is Government Ownershi'p of Railroads Advisable ? — Union Depots. — Terminal Companies. — Combinations in the Different Departments (Passenger, Freight Traffic, etc.). — Tec'hnical and Other Associations (the American Railway Association, etc.). The total mileage of the railroads of the United State's amounted, about the middle of the year 1903, to 205,000 English miles, or 330,000 kilometers in round numbers. This network of railroads was operated in 1902-3 by 2,078 companies, only 809 of whom were independent, while all others were subject to one or the other of these in- dependent companies. As no less than 153 railroads have lost their independence during that year, the larger sys- tems are still increasing their dominating power corre- spondingly. Compared with them, the influence of the smaller railroads which have still preserved their indepen- dence is of little consequence for the economic life of the nation. Besides, there is the wide field of operating and financial combinations, which have tended to accentuate this concentration still more. Thus, the large systems con- tinue growing in power, while the smaller companies are being eclipsed more and more. 109 The present condition of the vast combinations showa in general the following grouping (compare also "Railroad Archives," 1904, book 4, page 978) : I. The East is under the dominating influence of three great groups friendly to each other — viz., the New York Central, the Pennsylvania Railroad and the Morgan sys- tem. The New York Central system forms the family estate of the Vanderbilts, It connects New York, Montreal and Boston in the East with Buffalo, Cleveland, Chicago and St. Louis in the West. The most important of the lines belonging to this system are : (a) New York Central and Hudson River Railroad. Following the course of the Erie Canal, it connects New York with Albany, Buffalo and Montreal. (b) The Boston and Albany Railroad. (c) South of Lake Erie, the Lake Shore and Michi- gan Southern, as well as the Nickel Plate Railroad between Buffalo, Cleveland, Toledo and Chicago. (d) North of Lake Erie — partly on Canadian terri- tory — the Michigan Central Railroad between Buffalo, De- troit and Chicago. (e) Between Chicago, Cleveland, Cincinnati and St. Louis, the Big Four Route. Besides these they control a number of smaller rail- roads, bringing the total mileage up to about 18,000 kilo- meters. However, the just enumerated railroads do not, by any means, constitute the entire sphere of interest of the New York Central Railroad; for west of Chicago the North- western Line (14,500 kilometers) is controlled by the New York Central system. This line runs through the wheat no zone of the States of Wisconsin, Iowa, Minnesota, South Dakota and Nebraska. South of the New York Central system lies the sphere of interest of the Pennsylvania Railroad. The branches and subdivisions of this system con- nect in an extended network the tidewater cities New York, Philadelphia, Baltimore and Washington with Pittsburg, Cincinnati, Cleveland, Toledo, Indianapolis, St. Louis and Chicago. As a small but valuable part of the system we must mention the Long Island Railroad, which is of spe- cial importance for the suburban traffic of New York. The entire length of the system (including the Baltimore and Ohio Railroad, which occupies a more independent posi- tion) amounts to more than 25,800 kilometers. The New York Central and the Pennsylvania rail- roads are on friendly terms, and they share in the control of a number of smaller railroads. These are the Norfolk and Western, Chesapeake and Ohio, Kanawha and Michi- gan, Hocking Valley, Toledo and Ohio Central, Jersey Central, and, finally, the Philadelphia and Reading Rail- road. The total mileage of these railroads approximates 9,600 kilometers. To these we must add the Lehigh Valley Railroad be- tween New York and Buffalo (2,160 kilometers), which is controlled by the Pennsylvania, the New York Central Railroad and the Morgan system, each having control of one-third of the line. The Morgan system embraces a number of railroads over which J. Pierpont Morgan and the interests allied with him exercise a governing influence. Included in it are the following lines : III (a) The Erie Railroad (3,460 kilometers) between New York, Bufifalo, Cleveland and Chicago — also a com- petitor of the New York Central. (b) Two systems in the South Atlantic States from Virginia to Florida — viz., the Atlantic Coast Line (6,400 kilometers) and the Southern Railroad (11,250 kilome- ters). (c) A number of railroads that connect this territory with the West (Chicago, Cincinnati and St. Louis), as, for instance, the Monon Route, the Louisville and Nashville, the Nashville, Chattanooga and St. Louis, the Mobile and Ohio Railroad, etc. — all in all, about 9,600 kilometers. The Morgan system foots up to 30,500 kilometers. II. The Western railroads are also divided into three great groups like the Eastern ones. The northernmost of these is the Hill group, com- prising the Northern Pacific, and the Great Northern, as well as the Chicago, Burlington and Quincy Railroad, ag- gregating about 32,000 kilometers. South of it lies the great Harriman system, consisting of the combined Union Pacific and Southern Pacific rail- roads. The following lines make up this system : (a) The Union Pacific Railroad connects Kansas City and Omaha with Denver, Cheyenne and Ogden. (b) A branch of the Southern Pacific runs from Og- den to San Francisco across the Sierra Nevada;, this branch was formerly known as the Central Pacific. (c) The Southern Pacific Railroad operates also un- interrupted rail tracks along the far western and south- western frontier of the United States from Portland (Ore- gon) in the north by way of San Francisco and Los An- geles to Galveston and New Orleans in the South. 112 (d) Lastly, there belongs to the system the Oregon Short Line and the Railroad and Navigation Company, by which Ogden is connected with the Northwest (Portland, Spokane, Butte). Apart from these overland routes the Harriman sys- tem entertains close relations with the Illinois Central, the Yazoo and Mississippi, and the Chicago and Alton Rail- road, the former crossing the Mississippi Valley from north to south. If these be counted in, the entire sphere of interest foots up to about 30,000 kilometers. The largest and most complete of all the American railroad systems are the Rockefeller-Gould railroads, which are in possession of the Gould family, with the active participation of Rockefeller capital. The centre of the sys- tem is St. Louis, and from it the following lines spread out : To the west the Missouri Pacific, the Denver and Rio Grande, and the Rio Grande and Western Railroad as far as Salt Lake City and Ogden. To the southwest, the Texas Pacific Railroad, the Katy Route, the Cotton Belt Route, the International and Great Northern Railroad, together with smaller roads as far as the Gulf and the Mexican frontier. Lately the system has been rounded out east and north of St. Louis by the acquisition of the Wabash, the Wheel- ing and Lake Erie and the Western Maryland Railroad. Through the acquisition of these lines the system obtained connection with Chicago, Buffalo, Pittsburg and Baltimore. It is more than probable that, with the enormous power at its command, the Rockefeller-Gould combine will bend all its energies in the direction of a further extension of its lines. By acquiring control of the Lackawanna or the New "3 York, Ontario and Western Railroad, and by building a new line from Utah to the Pacific Ocean, the system would be practically complete. Then there would be in one hand a gigantic network of railroads, spanning the continent from ocean to ocean and from the Gulf to the Lakes. Groups of minor importance in the West are the united Frisco and Rock Island systems as well as the so-called Hawley group. The Frisco and Rock Island companies control 21,000 kilometers of track, and their lines extend from Chicago and St. Louis to the northwest and west, but above all to the southwest, which has recently been opened to civiliza- tion (Indian Territory, Oklahoma). The Hawley group includes the Minneapolis and St. Louis, the Iowa Central, the Colorado and Southern, and the Toledo, St. Louis and Western Railroad, in all about 5,000 kilometers, that extend between Texas, Denver, St. Paul, Toledo and St. Louis. All in all, there are upward of 250,000 kilometers in the hands of ten large groups, while the total mileage of the American railways, as mentioned before, amounts to about 330,000 kilometers. To such an extent has the consolidation of railroads succeeded, and this in spite of the laws, which forbid the combination of railroads for the purpose of preventing or restricting competition, it would be a mistake to assume that now the tendency to make further combinations has been checked ; in fact, the disposition in that direction is to- day stronger than ever. The strenuous endeavor of the so- called Harriman railroads and their friends for a commu- nity of control of the Northern Pacific, Great Northern and Chicago, Burlington and Quincy railroads through 114 the Northern Securities Company can be termed as the most open attempt to reach the end by evading the law or to get there as near as possible. The case has already en- gaged the attention of the Supreme Court of the United States for the last two years, and although the decision of this court has declared as illegal the issuing of sureties by the Northern Securities Company, yet it may be stated that the case has not been finally settled. It will now be at- tempted to get there in a roundabout way. In the mean- time, rumors cropping up again and again as regards the favorable or unfavorable decision of the courts served the purpose of influencing the Stock Exchange for or against the value of the securities of the interested railroads. A very high railroad official with whom we discussed the matter expressed his belief in the ultimate triumph of the Harriman group. Since Mr. Harriman is a prac- tical politician well known for his perseverance, the pre- sumption is altogether in favor of such a view. Should it come to be realized, it would signify an important step in the further centralization of American railways, a step cal- culated to be of the utmost importance for the further evo- lution of combinations. Mr. Harriman has, so far, been the only one of the ruling American railroad men who has seriously tried to combine organically — that is, in a uni- form administrative system — all those lines over which he exercises a controlling influence. This matter will be dis- cussed in detail in the fourth chapter. In case his efforts are crowned with success, he would have under his sway a network of railroad lines comprising more than 50,000 kilo- meters. Already it is rumored that the Union Pacific Rail- road plans extending its lines to the east as far as New York. The question arises whether such a vast system 115 could be centralized sufficiently to be consistent with uni- formity of management. Mr. Harriman is undoubtedly a very clever and prac- tical man. Experienced railroad experts are, however, agreed that his talents are largely of the financial order. They all admire the pluck he displayed in familiarizing himself with the conditions obtaining in the various de- partments of railway administration, although but a few years ago he was only an obscure broker on the New York Stock Exchange. Yet the opinion prevails that by the nature of things he will always be more of a financier than a railroad man and this end will always require the full abilities of a man even if matters become simplified. If, nevertheless, Mr. Harriman has taken upon himself the gigantic task of organizing uniformly the administrative departments of the whole system of his combinations, pres- ently but as yet without any definite program, then it proves that he has under all circumstances the courage of his con- victions. On the other hand, there is great danger that the ten- dency of making the system subservient, in a large degree, to the personality of those temporarily at its head, is highly detrimental to its continued success. In the first place, such a policy is apt to impart to the whole administration a personal character, and it happens not infrequently that such personalities, after having demonstrated unusual effi- ciency under the direction of a president possessing prac- tical experience, fail to develop the qualifications necessary for the proper discharge of their duties, when they find themselves in a greatly enlarged sphere of activity with their discretionary authority correspondingly increased. (One of the largest systems — comprising about 21,000 116 kilometers — has apart from a president in common also only one responsible manager of the traffic and the main- tenance department, including the transportation operating department.) In addition it must not be forgotten that in systems in which the personal element predominates a change in the leading officials, as will happen sometimes from various causes, will, as a rule, entail also a change in policy. All this is bound to happen whenever a person is vested with too much power, without inquiring whether he is the right man under given circumstances. The conditions prevailing on the Eastern railroads, and particularly on the Pennsylvania, present a marked con- trast to those described just now. This latter line only fig- ures on employees and officials with average ability, and its organization is such as to assign to all its employees, not excepting even the leading officers, their well-defined rights and duties. This brings about a certain embarras de richesse and it is unavoidable that the management is a pri- ori more expensive. This, however, is often only seem- ingly so, for the methods of the Pennsylvania lend them- selves, in general, to a smooth change in the personnel, the new officers simply continuing to carry out the orders which were established for their predecessors in office. On the other hand, on all railroads which are managed by domi- nating personalities, the first steps of a new man are usually to efface as much as possible all traces of the activity of his predecessor, so as to make the best possible showing for himself. Thus the methods introduced by the new regime as practical and useful are not only diametrically opposed to those of the old management, but they also frequently involve a change in the leading officials for the purpose of establishing them. The new man, as a rule, brings his own 117 staff from his old sphere of activity. (Here it must be stated that we found with the Baltimore and Ohio Railroad in leading positions a number of officials who were but a short time in the service of the company. They were most- ly officials who had been formerly in the employ of the Pennsylvania Railroad, where they had shown their worth. When the Pennsylvania had acquired control of the Balti- more and Ohio they were exchanged for other persons in the service of the latter road, probably for the purpose of introducing Pennsylvania methods. ) The officials thrown out of employment through the revolutionary changes unavoidable with the system of big personalities enter the service of other lines, and this con- tinual change cannot be of advantage to the even, pro- gressive development of the various railroad systems, particularly as it affects the leading men. Significantly enough, during our stay in the United States, it became known that Mr. Loree, president of the Rock Island Railroad, had been relieved from his post and the case was discussed minutely in the daily press. Within three years he had been the fourth president of this great system. It was asserted that his fault consisted, apart from his unfriendly relations to the officials of the company, in the alleged fact that he, who had been up to very recently to his appointment Fourth Vice-President of the Pennsyl- vania Railroad, had introduced, in utter disregard of the differences existing between the Eastern and Western rail- road systems, a policy of management which was out of proportion to the receipts. In consequence the net receipts had been reduced very noticeably. That a company will suffer serious monetary losses through such frequent changes is made apparent by the ii8 newspaper reports published at the time. According to these reports the Rock Island Railroad had to pay its presi- dents over two million dollars in the course of three years, this sum including the indemnities for breach of contract. Moreover, if we consider the enormous expenses in- separable from every change in the entire administrative system of a railroad, we need not be surprised at the growth of popular sentiment constantly increasing for a thorough reform of the American railway institution — a reform which has for its ultimate aim — at least, so it is stated in the democratic press — national ownership of the railroads. (The authors very likely refer to the views of Mr. Wm. J. Bryan.) President Roosevelt himself is de- voting his attention to this subject by making an issue of the complicated railroad tariff question. He aims at a rail- road supervisory board, to be clothed with adequate pow- ers. The concessions thus made to Democratic ideas by the Republican President prove, as nothing else, his manly courage, deep sense of responsibility and broadmindedness beyond party platforms. Mr. Roosevelt has put forth his best energies in trying to free the people of his country from the rule of the trusts. How far he is yet removed from accomplishing this aim is manifested by the speech, made by the President of the National Association of Rail- way Commissioners at their last Congress at Birmingham, It seems that Mr. Smith, the president, is not fully aware of the true meaning and wide sweep of the new line of policies inaugurated by Mr. Roosevelt. It seems, so Mr. Smith says, as if President Roosevelt were determined to kill the trusts ; in fact, he is only trying to curb their power by legit- imate means. Mr. Smith states also, among other things, that without trusts and the combinations of enormous capi- 119 tal in the hands of a few, which are at present everybody's target, it would be impossible to ride with every conceivable modern comfort in the palatial Pullmans and without change of cars from New York to San Francisco (more than 5,000 kilometers) within the brief space of time of ninety-six hours. Conceding this fact, what does it prove ? Does Mr. Smith really mean to say that we should preserve and nurse these formations, even after they have accom- plished their main purpose — in fact, after they have out- lived their usefulness? Perhaps from motives of grati- tude ? To hear a citizen of the United States advance such arguments strikes one as something odd. If, so Mr. Smith continues, the concentration of all the railroads in the land into a single system under govern- ment control is in itself a dangerous experiment, by virtue of the centralization of the immense capital, how much more risky would it be if, through this government control, more than a million of employees would be entrusted to one man, who temporarily acts as the chief executive of the nation? In Mr. Smith's opinion, such an experiment would, in a short time, transform the republic into a mon- archy. It may remain an open question whether, with a popu- lation of 80,000,000 inhabitants, the number of railroad employees could ever give sufficient power to a president to enable him to annihilate the republic. At any rate, it is certain that the powers delegated to the legislative bodies are adequate to provide against any such contingency in case the plebiscite of the people should decide for govern- ment ownership of all the railroads. That Mr. Smith's apprehensions on this account are entirely baseless is plain- ly evinced by the existence of the federal postal service. 120 Everybody knows that the positions of its employees aic not, in any great sense, influenced by presidential elections or by change of party. In view of all this we do not under- stand Mr. Smith's anxiety to have all these prerogatives, apparently without any misgivings on his part, vested in some private individual, to be made the autocrat of all the private railroads joined together in one uniform system. Nothing would be more apt to act in the direction of making private ownership odious than the repeal of the Pooling Laws, for which certain financial and railroad cir- cles are now as active as ever before. Past experiences justify the conclusion that soon after their repeal control of all American railroad lines would be centred in the hands of a few. Does Mr. Smith really believe that such cen- tralization would signify merely an additional accumula- tion of capital ? Does he think that a man like Mr. Harri- man, for instance, would show more judicious use in the political exploitation of such a power as would be given in his hands by so large an army of employees than the President chosen by the whole nation ? Indeed, there is here more than a question of political power at stake, for, if all signs do not fail, the industrial independence of the en- tire people at large would be seriously threatened as a re- sult of such a contingency. How would the American people decide if put face to face as an alternative with the actual conditions ? Would they prefer to extend the powers of their President, elected by popular vote — an extension of powers risky, perhaps, to some extent, from the Republican-Democratic standpoint? Or would they rather yield the absolute control over their industrial life, and as a consequence also over the political situation to some railroad magnate absolutely independent 121 of the people, and who, as may be imagined, would not al- ways enjoy their confidence? Fortunately matters have not come to such a pass by a long way. The railroads and their powerful allies will, from very easily explainable mo- tives, always oppose strenuously all government interfer- ence in whatever shape or form it may be suggested. NATIONAL OWNERSHIP? Entering upon the question whether the principle of government ownership is applicable, as far as human judg- ment goes, to the railroads in the United States, we must not lose sight of the fact that their development has been along lines distinctly at variance with those followed by our earlier private railways. Nearly all the larger American railroad companies are industrial and financial enterprises, the activity of which is by no means confined to the business of transportation ; on the contrary, the centre of interest or main point of the whole business lies at times almost en- tirely in the industrial and financial sphere, transportation proper being merely subordinate thereto. Government ownership of railroads in America would, therefore, mean something different from what it once was in Germany — that is to say, its significance for the United States cannot be measured by German standards. Under no circumstances would government operation of the rail- ways of the United States put an end to all the problems arising from their private operation. The American railroads could not very well undergo such a radical change in their management without losing, in one direction or another, their peculiar character ; more- over, there are many reasons justifying the assumption that their officers would not easily adapt themselves to the 122 new order of things brought about by government owner- ship. This is not meant as a reproach. Besides, it must be remembered that the government of the United States has not as yet demonstrated, by its own industrial methods, that it knows how to conduct a large concern successfully, or at least economically. As long as Americans do not fundamentally modify their conceptions of the functions of government on the one side and of the character of rail- roads as purely private industrial enterprises on the other side, there can be no idea of governmental control of rail- roads which would be beneficial to the country, let alone of government operation or ownership. Therefore, we must not expect too much, for the present, from the advocacy by the Democratic party of government ownership of rail- roads, for at present the political attitude of the Democratic party is determined purely by considerations of party poli- tics. The dissatisfaction with existing railroad conditions is even in this party not deeply rooted. UNION DEPOTS— TERMINAL COMPANIES. Returning, after these prognostic digressions, to the study of actual conditions, we must not omit those relations of common interests which only afifect part of the system instead of the whole. To this class belongs the common use of stations by different companies. In Germany, one of the administrations using the stations is sole proprietor of the real estate, buildings, tracks and yards ; and the other administrations, also using the same station, pay in propor- tion, usually a lump sum. In North America it is entirely different. Here the various railroads have formed inde- pendent stock companies at nearly all the more important junctions where the lines of several railways meet. This 123 company owns the entire plant of the Union Depot. It manages and operates it with its own employees, receiving for its services a suitable remuneration on the part of the railroads using the depot. The terms of the contract, reg- ulating the formation of the company and containing the clauses for the use of the station, are not always identical but usually similar. The first Union Depot of this class which we inspected closely was that of the Boston Terminal Company. Five railroad lines meet here — ^viz., the New York, New Haven and Hartford, the Boston and Albany, the New England, the Old Colony, and, lastly, the Boston and Providence Railroad. Traffic at this depot is of considerable dimen- sions. According to the statistical data submitted to us there arrive and leave daily more than 3,000 passenger coaches and from 150 to 400 mail and express freight cars. In the year 1903 there were handled 26,505,137 travelers and over 2,000,000 pieces of baggage. The number of employees aggregates about 2,500. The station buildings are spacious and well equipped for the comfort of the trav- eling public. It is worthy of special comment that this railway station is built so as to afiford an easy connection with those of the municipal elevated railroads. This ar- rangement permits passengers to avoid crossing the streets, and it may be met with in many other American cities. The train shed contains thirty-two tracks with room sufficient for 252 cars. We were interested mostly in matters pertaining to the independent administration of such terminal companies, of which there exist naturally quite a number. They owe their existence to various causes. In the first place, the companies meeting at a certain locality were actuated by 124 the desire both to economize operation and to faciHtate transfer service. Secondly, by the spirit of mutual dis- trust, brought about by keen competition between the dif- ferent managements. It is the latter consideration espe- cially which has been decisive not only for the shape and form given to the terminal companies, but for the fact that the total freight traffic has been excluded from the Union Depots. There were also reasons of a local charac- ter, such as locating a freight yard, where the conditions for each system were most favorable to traffic. If all this is duly considered, we must admit that the development has conformed to the conditions existing in the United States. Comparison with German terminal arrangements is hardly possible, on account of the wholly different state of affairs. It may be conceded, though, that the German traveling public, and in many cases the railroad companies also, de- rive proportionally more advantages from their system of uniting several station managements. The reasons for this may be looked for in our peculiar conditions, and, as regards the railway administrations, these reasons mani- fest themselves to no small extent in the confidence often shown with us to competing companies. American rail- roads do not practice such confidence; they will rather spend, beforehand, a little more money than to have the existence and development of their traffic imperilled by some competitive line. Moreover, the American public would hardly be benefited by the exclusive station manage- ment on the part of one of the companies concerned. In view of all this the burdens and extra expenses that accrue to operation and administration, by reason of a large staff solely serving at a single station, may not be of much consequence. Besides this, motives of another kind, 125 mainly of a financial nature, are said to have favored the formation of terminal companies. The manner in which many American railroads sprang into existence explains why their available resources were often very limited ; nay, railroad companies sometimes found their credit exhausted before the line was even finished. In such a case the forma- tion of a new company under a different name would ren- der the assistance so urgently needed. Thus, for instance, the Union Depot at Portland, which is known for its prac- ticable and tasteful appointments, owes its origin to a com- pany formed on this account. Most of the terminal companies take the form of a stock company, the capital of which has been raised by the railroads concerned in proportion to their share in the man- agement. As a rule, the terminal companies do not derive any revenues directly from the traffic. The other revenues (from depot news-stands, depot restaurants, etc.), as well as all the expenditures, including the interest on the capi- tal invested, are distributed in proportion. Sometimes the capital invested represents, beforehand, a higher sum than the appraisement of the station calls for. This is done to provide for future repairs and improvements. The official staff of a terminal company consists of a president, vice-president and board of directors, being re- cruited, however, exclusively from the high officials of the railroad companies concerned. The executive duties are ordinarily vested in a special superintendent, subordinate to whom is a station master, a functionary otherwise but seldom met with in the United States. In general all these arrangements seem to give satis- faction ; especially the make-up of the board of directors is 126 said to have stood the test for all interests concerned. This is perhaps brought about by the circumstance that resolu- tions are passed mostly by personal majority rules and not according to shares. All this holds good, however, only with regard to Terminal or Union Companies that are founded jointly by the interested railroad administrations. The character of the Chicago Union Transfer Com- pany is entirely different from these arrangements, which serve principally the passenger traffic. As this company was not established by the railroad companies, it charges tolls for its service from the railroads as well as the public. It is organized for freight traffic merely, handling it be- tween the different freight yards in Chicago, as well as be- tween these and the public. It does not seem to enjoy great popularity and is little patronized by the railroads. The Baltimore and Ohio Railroad especially has lately en- tered into an agreement, not with this one, but with the Chicago Terminal Transfer Railroad Association, in order to secure an entrance into Chicago and other rights for its business there. The conditions of the Chicago Union Transfer Company do not justify any conclusions as to the Terminal Companies proper. The Terminal or Union Depot Associations, which are formed by the railroad companies, do not publish any busi- ness reports ; nor are they mentioned in the railroad statis- tics as special railroad undertakings. The fact that a large number of cities lack the advan- tages of a Union Depot is a matter of course. Under the existing system it could not be different considering Ameri- can railroad conditions. A similar state of affairs existed 127 in Germany at the time when railroads were still privately managed. Lastly, we must not forget that in America, too, when- ever circumstances demand it, the lines of one company are used by another. In exceptional cases the passenger traf- fic, and, still more seldom, the freight traffic, is handled by another company. The respective contracts for such oc- currences show how each management has been careful to protect itself, as far as possible, against loss of trade through such an arrangement. Any other peculiarity dis- tinct from our own kindred conditions cannot be found in this direction. COMBINATIONS IN DIFFERENT DEPART- MENTS. As a matter of fact, there exist other relations between the various railroad companies. Foremost among these are combinations entered into for the sake of establish- ing and developing freight classifications. This necessi- tated, as a preliminary step, their arrangement into groups, which belong together geographically and economically. Hence there were developed : 1. The Official Classification Committee, for that part of the country east of the Mississippi and north of the Ohio River. 2. The Western Classification Committee, west of the Mississippi. 3. The Southern Classification Committee, for the sec- tion south of the Ohio and east of the Mississippi. The first mentioned branched off, in 1899, from the so- called Joint Committee, which was in existence before that dale and survives still. 128 Inasmuch as all recommendations for a change of the freight classifications as first adopted could originate only with members of the Joint Committee, it was agreed, on the other hand, that all resolutions of the Classification Committee, in conformity with their character as advisory board, should require for their validity ratification by the Joint Committee. This has been modified, in 1895, in such a way that not only three members each of the Classification and of the Joint Committee shall be authorized to recom- mend changes, but such recommendations can also origi- nate with associations, which in the meantime came into existence — viz. : (a) The Trunk Line Association. (b) The Central Traffic Association. (c) The Freight Traffic Association of the Middle States. (d) Local Committees especially authorized for this purpose. The decision rests, however, as heretofore, with the Joint Committee, this body corresponding almost exactly with the General Conference of the German railroads. The transactions of this committee are not made known gener- ally, since they would conflict with the anti-pool and anti- trust statutes. Only the determinations of the respective administrations are published, and these only by each for its own system. The considerations of the Classification Committees refer to : 1. The minute examination of the conditions accom- panying competition. 2. The amount of freight the companies expect to handle and the direction in which it is to be shipped. 129 3- Its value, size and weight. 4. The degree of risk incurred while transporting the cargo. 5. The manner in which congestion of freight may be reHeved. Both the Official and the Southern Classification con- tain six classes, whereas the Western shows but five. Along with these class tariffs there exist lower tariffs for such staples as are the main freight from certain districts, the more important articles being grain, timber, coal, live stock, and oil. Whether the efforts put forth by the National Associ- ation of Railway Commissioners in behalf of a uniform classification will now meet with success cannot be de- cided as yet. The movement toward introducing such a classification as was, in 1889, inaugurated by the Interstate Commerce Commission miscarried through the resistance of the railroads. Misgivings concerning such uniformity are expected to be met by the introduction of special rates as far as the needs of particular districts demand them. This move- ment cannot fail to arouse widespread interest, particularly so because it discloses once more the attempt to grant to the Interstate Commerce Commission, to whom the evolving of such a tariff is to be intrusted, further functions of a prac- tical nature. However, the realization of this wish seems to be a long way off. The various Classification Committees consist each of sixteen members. They meet ordinarily twice a year, and they admit neither officials of the interested roads to their conferences, nor do they consult experts orally. Objec- tions of the railroads against the resolutions of the Classifi- 130 cation Committee are lodged with the Joint Committee, with the result that such resolutions are made ineifectual as far as the objecting railroad is concerned. We have been assured, however, that objections of this kind are hardly ever raised. Another branch of the Joint Committee, which, as mentioned above, was found to clash with the anti-pool an3 anti-trust laws, was the Joint Traffic Association, a tariff union comprising the Eastern railroads. In consequence of the verdict of the courts it has disappeared from sight, together with its paternal association. It has been super- seded — in part, at least — by the so-called Trunk Line Asso- ciation. The ostensible object of this association, underlying its foundation and laid down in its statutes, is to aid in enforc- ing all those laws, both Federal and State, that have been passed in regard to the regulation of the passenger and freight traffic, by a free exchange of opinions in the domain of traffic classification and statistics. In truth, however, it is nothing but a continuation of the old Traffic Association, and the way in which this asso- ciation, its officials and members, shun the light of day — viz., avoid playing in the open — is certainly quite singular. We were emphatically told by thoroughly reliable parties that, with the exception of the very tame statutes submitted to us, nothing is printed that might contain any suggestion of its illicit character. All that has been derived officially from the old organization is the Inspection Bureau, planned and arranged in 1883 by that excellent countryman of ours, Albert Fink. These inspection bureaus are quite numerous, as all the Classification Committees and the various railroad ad- 131 ministrations maintain such. Their object is to correct er- rors made in sending and receiving goods, particularly with refetence to weights and tariff estimates. That they serve a valuable purpose is self-evident, if one considers that the American tariff regulations impose no fines for false state- ments concerning character and weight of cargo sent. The bureaus are located at the centres of traffic, and they have the right and duty to conduct investigations in the freight yards, as well as to send revisory agents to other stations. The Chief Inspector of the Central Freight Associa- tion of Chicago presented us with the accounts for the year 1903. This interesting document gave us an insight into the activity of the bureau and the success with which it has met. By correcting false statements of weight there have been retrieved : In carloads, 1,725,253,545 American pounds — ^viz., 784,990 German tons. In merchandise freight, 135,474,465 American pounds — viz., 61,641 German tons. These two items meant a saving or an additional reve- nue of together $2,065,147 — viz., 8,591,012 marks. Con- cerning the false statements made as to the character or contents of freight, the corrections resulted in a saving or additional revenue for extra freight of $584,854 — ^viz., 2,432,993 marks. The expenses connected with the main- tenance of the bureau amounted to $252,752 — viz., 1,051,- 448 marks. Consequently there was a net surplus of $2,397.249— viz., 9.972,556 marks. There are, in addition, many other associations en- gaged in the business of passenger and freight trafific, but, strictly speaking, only the above-mentioned Classification 132 Committees, with their appendages, may be regarded as official. The character of the others is more or less pri- vate — in part, even exclusively social. It is, therefore, not a matter of general interest to do so much as to quote their names. TECHNICAL AND OTHER ASSOCIATIONS. A factor of great importance for the American rail- roads is, and has been, the American Railway Association. An offshoot of the General Time Convention, it was organ- ized in 1 89 1. Its main object was to further the movement towards the introduction of a Standard Time System, un- successfully attempted at different times. It was based on the inofficial associations, which were founded in the begin- ning of the seventies, and which pursued a similar program — namely, that of systematizing the conditions governing the passenger and through traffic. Although the General Time Convention had served its purpose with the introduc- tion, in 1883, of the four Standard Times for the different sections of the United States and Canada (Eastern time. Middle time. Mountain time. Pacific time), in place of the fifty odd Standard Times existing previous to that date, its continuation was decided upon in rightful recognition of the fact that also a greater uniformity in other respects of the railroad through traffic, and especially of the general operation of the service, would be beneficial. Thus it hap- pened that the sphere of action originally assigned to the Convention was extended more and more. One of the first of the new fields to come under its province was the safety signal service system ; to this were added gradually the en- tire departments of operation and transportation. By 133 committing all these duties to the General Time Conven- tion, its business had become so enlarged as to make it ap- pear advisable to reorganize it under the name of American Railway Association. At present it includes 220 railroad administrations in the United States, Canada and Mexico, their total mileage aggregating about 95 per cent, of all the railway lines in these countries. Each administration is entitled to at least one vote; such as operate more than 1,000 miles (1,609 kilometers) are allowed an extra vote for each additional 1,000 miles. The chief duty of the American Railway Association consists in regulations of a binding as well as a non-obliga- tory character for the operation of the service. The prepa- ration of such regulations is assigned to sub-committees. The mechanical sub-committee is in charge of the train, the car, and the safety signal service. The association has es- tablished certain operation rules, which, though optional, have been adopted by a great majority of railroad adminis- trations. This set of rules gives an explanation of techni- cal terms, as well as directions with reference to the opera- tion, of lines having single, two, three or four tracks. It defines the duties of train dispatchers and regulates the signal and safety service, particularly in regard to trains using the wrong track. Besides, an agreement has been reached, in 1902, look- ing toward a more economical interchange of cars (see eighth chapter). Nor are there lacking special rules and regulations for the car service. Lastly, the association has passed resolutions touching, in the main, on the following points : I. Uniformity in the size and capacity of cars ( 1897). 134 2. Connected brakes for passenger and freight trains ; recommended is the Westinghouse brake (1901). 3. Automatic freight car coupler ( 1890) after the pat- tern of the "Master Car Builders Type of Automatic Freight Car Coupler." 4. Technical details of car construction (1894) after the "Details of Car Construction" of the Master Car Build- ers' Association. 5. Fixed types for box (G) cars respecting size and capacity. The dimensions of a normal G-car are : Length, 36 feet; width, 8 feet 6 inches; height, 8 feet (inside measure- ments). The door opening is 6 feet wide. With this car as a standard, the minimum weight of a load of freight may be computed. In smaller or larger sized cars the minimum weight is ascertained on the basis of fixed figures. In cars measuring 35 feet in length it is reduced by 2 1-2 per cent. ; in those below 35 feet, by 5 per cent. The increase of the minimum weight of freight in cars measuring more than 36 feet is as follows : 10 per cent in cars of 37 and 38 feet 25 per cent, in cars of 39 and 40 feet 40 per cent, in cars of 41 and 42 feet 55 per cent, in cars of 43 and 44 feet 65 per cent, in cars of 45 and 46 feet 70 per cent, in cars of 47 and 48 feet 80 per cent, in cars of 49 and 50 feet 150 per cent, in cars still larger. ^35 In ascertaining the minimum weight the heaviness of the freight is to be considered. Six inches do not count; above six inches is counted one foot. 6. Uniform gauge, 4 feet 81-2 inches. 7. Uniform regulations for the heating and lighting of trains. Outside of this great association with its sections there exist special associations for every single branch of the service, such as the "Master Car Builders' Association" for the uniform maintenance of cars. Another association in the realm of the car service is the International Associa- tion of Car Accountants and Car Service Ofificers. This association formulates and publishes all the regulations re- lating to the type of cars argeed upon, and issues the so- called "Railway Equipment Register." The latter con- tains detailed statements as to the number, size, capacity and kind of cars (dump car, flat car, tank car, coal car, box car, etc.). We must also mention those associations whose purpose is the education of the employees in the different departments of the service. In this category belong the Association of Train Dispatchers and the American Rail- way Engineering and Maintenance of Way Association. Very useful is also the Controllers' Association. In the first place, they introduced a uniform system of rail- road bookkeeping, which was developed later on by the In- terstate Commerce Commission. Secondly, they improved the methods employed in compiling statistics and made many useful suggestions in regard to the proper manage- ment of accounts. 136 The railway physicians have also two organizations — International Association of Railway Surgeons and Amer- ican Academy of Railway Surgeons. In any case, the organizations and associations enu- merated in this chapter furnish convincing proof that the officials and the employees of the different American rail- roads recognize the value of cooperative work in the realms of the various departments — a value accruing not only for their own but also for the benefit of the public. And this progress has been achieved in spite of all competition and jealousies. 137 FOURTH CHAPTER. General Meeting — Board of Directors. Organization of the Several Railroad Administrations. — General Meeting. — Board of Directors. — Division of the Central Ad- ministration. — Departments, Areas of Divisions and Districts. — Administration Building: Office Room. — Dispatch of Office and Account Matters. — Mechanical Auxiliaries in the Internal Management. However much the American railroads differ in their internal affairs, in their intent, in their economical value, in the policies which they pursue in their several systems, hardly any fundamental differences can be distinguished in the external structure of their administration. Only in the relations of independent railroads to each other are found differences according to the manner and degree of the mutual interest, which is founded in the main on the reciprocal financial partnership. It is said of a railroad administration which is in the relation of dependence to another on the basis of a corresponding ownership of shares that it is "controlled" by it. In this relation stands, for example, the Baltimore and Ohio Railroad to the Penn- sylvania Railroad, which holds an essential part of the shares of the former. The former is apparently independ- ent ; its policy, however, is directed, to a certain degree, by the Pennsylvania Railroad. This is accomplished by the members of the board of directors being partly the same persons in both companies, and by frequent interchange of leading officials from one road to the other. It happens 139 not less often that single persons, families or groups of financiers hold in their hands, more or less, the actual con- duct of business of a railroad or at least of its policies on the strength of their ownership of shares. As a rule in such cases they assure their influence by filling the places of officials in the administration board by persons dependent on them. This filling of places is effected, as in our stock companies, by resolution at the general meeting of the stockholders, with that difference that, with us, private for- tunes of a magnitude which gives preponderance in a gen- eral meeting of stock companies with such an enormous capital are not to be found. It is evident that by these means the importance of the general meeting in comparison with the board of directors is reduced to a still lower de- gree than is sometimes apparent with us. In consideration of the ownership of stock of the New York Central Rail- road in the hands of the Vanderbilt family, the general meetings of this concern are reduced to a mere formality. But, for mere appearance sake, the form of joint-stock companies is maintained, and, in fact, all railroad enter- prises in the United States are founded as joint-stock com- panies. The transactions subordinate to the general meeting of the stockholders are generally the increase or reduction of the stock capital, the approval of bond issues decreed by the board of directors, the election of members of the super- visory council, etc. The board of directors and, as execu- tive, the president, with his associate vice-presidents and other general officers, are at the head of the administration proper of the company. All the rules relating to joint-stock companies as such are laid down in the general by-laws. Such are the rules 140 relating to the organization and distribution of business within the board of directors, concerning the general stock- holders' meeting and other special regulations which are to be observed by the executive in its relation to the board of directors; also the payments of interests, dividends, etc. The business directions for the executive and his assistants, as well as the general rules for all officers and employees are, as a rule, provided in the order of the organization. The board of directors is composed principally of financial people — to wit, either the big bankers — who con- duct the financial transactions of the company, or the men personally interested in a considerable financial way. The president, sometimes also the vice-presidents, of the admin- istration are also directors ; but president and vice-presi- dents are per se officers of the company, and solely as offi- cers they draw a salary, while the place as member of the board of directors is a position of honor, without remunera- tion, especially, also for persons elected only as members; apart from certain transportation facilities, these members draw only daily allowances for their attendance at the various meetings, etc. The policy of the company and its financial direction in general rests exclusively in the hands of the board of direc- tors, which assembles frequently not only for the purpose of receiving reports on the condition of business and in order to pass resolutions, but also elects from its members a standing executive committee. Such a committee is an in- stitution which is not only considered a permanent counsel for the president as the executive of the administration proper, but is also empowered to act in concrete cases for the board. With the Pennsylvania separate committees exist for each of the following : 141 (a) The financial transactions and the traffic service. (b) The administration of the road and the rolling stock. (c) The administration of real estate, (d) The incidental business. (e) The insurance business. The president of the administration is ex-officio a member of all committees ; the vice-presidents are also con- sidered members if they are present. Other railroad administrations have a similar arrange- ment of committees ; smaller enterprises have a less number of committees, but it appears that all have at least one standing committee, so that the board of directors remains always in close touch with the current administration. The connecting link between the board of directors, its committees and the executive administration office is in all cases the president. He not only is the president of the ex- ecutive administration, but in most cases chairman (in all cases a member) of the board of directors. The collective policy of the enterprise is thus transferred by the president from the representatives of the stockholders to the general administration; it is to be followed under his supervision and direction in all departments. The president "shall have charge of the Seal of the Company." In this way the presidential system is carried out by the American rail- roads in the most complete manner. Varying in number as are the committees of the board of directors is also the number of vice-presidents of the ad- ministration, according to the extent of the enterprise. While the Pennsylvania Railroad, and in a like manner the larger Eastern administrations, appoint approximately one vice-president for each department, who is at the same time 142 a member of the executive committee of the board of direc- tors, the Union Pacific, the Oregon Railroad and other sys- tems, have, for example, only one vice-president. In such cases so-called general officers are at the head of the several departments with essentially the same powers, but without seat and voice in the board of directors. DIVISION OF THE CENTRAL ADMINISTRATION. As a general rule the highest administration office of a railroad (general direction) is organized in the following groups : General Office. * Treasury Department. * Accounting Department. Transportation (Operating) Department. Maintenance of Way and Construction Department. Traffic Department. * Legal (Law) Department. *Real Estate or Land Commissioner's Department. Added thereto are, with some railroads, especially the Eastern (the older ones), the administration of beneficiary institutions, as with the Pennsylvania Railroad, the Volun- tary Relief, Pension and Employees' Saving Fund. The idea to unite the central administration also locally is not strictly carried out — at least, not with the Western rail- roads. With the exception of the Pennsylvania Railroad and the Baltimore and Ohio Railroad, which have their administrative seat in the vicinity of New York, in Phila- delphia and Baltimore, the financial administrations of nearly all systems are located in New York, and even also those of such railroad administrations whose tracks begin * These are separated or united at a great distance from New York, while the administra- tion of the tariff and of the operating service is located, for the most part, in Chicago. This phenomenon is due to the different importance of the two giant cities. New York is the centre of all financial operations ; Chicago, the most important central junction and transfer point of the traffic from and to the west of the United States. The Union Pacific Railway has its traffic and accounting de- partment in Omaha, Nebraska; its maintenance and op- erating department, however, are also in Chicago. Not infrequently several branches are detached from the central administration — as, for instance, from the ac- counting department. Like the presidents and vice-presidents, all officials are generally regarded as general officers, to whom is allotted in the organization an independent department in the cen- tral administration, even when they are residents of a dif- ferent locality. Their appointment is made either like the one of president and vice-president (with the exception of the Fifth Vice-President of the Pennsylvania Railroad, who hardly can be regarded as more than a titulary presi- dent) by the board of directors itself, or, reserving the lat- ter's sanction, by the president of the company. Between the governing officers of the central adminis- tration — the president, the vice-presidents, general man- agers, chief engineers, etc. — and the superintendents are placed, in the large companies for the traffic service, chiefs of the division administrations, like the general superin- tendents (chiefs of operative direction) and certain general agents for special traffic business. The superintendents of division administrations are to be considered as ordinary officers and not as general offi- 144 cers, and to them are subordinated the employees of the local office, in so far as they occupy independently a definite position. (Employee is the general designation for the per- sonnel of the railroads, upon the whole including the me- chanics, as well as the clerks, and even the laborers. The distinction between salary and wage is likewise not strictly drawn in all cases.) Associated with all these officers, so far as they are unable to conduct the bulk of the business without assist- ance, are so-called clerks, for whose dispatch of business they are responsible. Among the clerks are counted espe- cially the telegraph operators, stenographers and type- writers.. In view of the great difference in the local extension, the density of traffic and the difficulty of the operation in the various systems, a unity of the formation of the group- ing of the branches resulting from the nature of business cannot be expected. The several groups of business men- tioned demonstrate, therefore, only in a general way the organization of administrative activity. In detail a number of circumstances are considered concerning the concentration or separation of related groups which have no general interest and the mention of which can be dispensed with; only one of these circum- stances may be shortly mentioned here which is treated more fully in another part — viz., the purely personal factor, in the sense that an organization is adapted on the whole, or at least in a preponderant manner, to the persons who are for a time active in a leading or prominent position. This results at the departure of such persons, consequent not only upon natural circumstances, but mostly for other causes, in the necessity of frequent changes with conse- 145 quences not always favorable to the carrying on of business. Of the printed administration regulations of five of the larger railroads, one was revoked in the year 1900 after the preceding regulation, which was issued in the year 1897, had been amended in the year 1899. But meanwhile the amended one had undergone alterations. None of the rest of the administration regulations is older than two years. Two of them have since been subjected to essential altera- tions, while in a number of large systems, notably in the West, as we were told, the administration regulation is is- sued not even in writing — at least, not in print — in order to allow larger liberty for changes. GENERAL OFFICE. Considering the dispatch of business in the central ad- ministration, the general office stands, as a rule, immedi- ately under the president. This office has charge of all matters subject to control and superintendence by the presi- dent. Especially from this office is maintained the conti- nuity necessary in the conduct of business with the board of directors and its several committees, more especially with the executive committee (with the Pennsylvania Railroad east of Pittsburg, "Incidental Business Committee"), through the instrumentality of the secretary, who is ap- pointed as a confidential man by the board of directors as well as by the president, and hence in most cases is a com- ing man. This committee is not to be confounded with the executive department, which stands immediately under the president, like the general office, taking its place with sev- eral railroad administrations, and which has for its object, principally, to facilitate for him the supervision of business. In this office, therefore, are discharged mostly the transac- 146 tions of a general character, under the personal direction of the respective vice-presidents and such matters which the president has specially reserved to himself. In this cate- gory belongs, for example, the purchase of locomotives and rolling stock, left in some cases to the purchasing director or agent under reserve of approval. In a number of the larger administrations belonging to a uniform system the controller, acting in common for all these administrations, has a seat in the executive department, although he belongs, according to his sphere of activity, to another department. This departure has its origin, however, evidently in purely personal motives. Taking it all in all, definite rules cannot be established for the business routine of this department, or, to be more explicit, cannot be peeled out ; the differences are consider- able without apparent reason in the main. In all cases, however, the more important personal affairs belong to the general office. TREASURY DEPARTMENT. The treasury department, owing to the extensive and important financial operations of the American railroads, has to fulfil tasks the like of which are found no more with our government railroad administrations. The treasurer is therefore appointed either vice-president or elevated oth- erwise to some more exalted position, as a department chief, for instance, immediately under the president. He is responsible for the regular receipts and expenditures of moneys of the company, and enjoys the rights correspond- ing to his responsibility — for example, the regulation of the way the money receipts should be delivered from the vari- ous service centres to the central office. 147 One of his principal duties consists in that he keeps the president permanently up to date as to the receipts (as a rule, by weekly reports) and as to the financial status of the company in general. Furthermore, all transactions devolve on him which re- late to the securities of the company (shares and bonds). As a rule, he has for these transactions a special assistant ("transfer agent" or "register of bonds"), while a corre- sponding number of assistants is assigned to him for the discharge of the before-described obligations. The cashier has charge of the disbursements proper. It was very instructive to see how the cash transac- tions are regulated at the dififerent administrations. The diversity which is to be found in this respect, and which is evident, even in the two Pennsylvania companies (east and west of Pittsburg), gives room to the supposition that a really satisfactory regulation, therefore, has not yet been found. While the lines west of Pittsburg pay all salaries and wages in cash through special paymasters, who travel along the track for this purpose, for the lines east of Pittsburg, on the other hand, a check is made out in the central office of the controller in Philadelphia for each recipient, and is de- livered by the division or district superintendent to those entitled, in so far as the wages of track-workers are concerned. When one considers that here are upward of 20,000 persons in question who have to be paid ofif at least once each month, one can imagine what an amount of work is involved alone in the preparation of this business. Even valuing little the expenditure of time on the part of the superintendent, who, as we assume, improves the occasion of the pay business to inspect his tracks and to get ac- 148 quainted with his staff, there remains for the wage recipi- ent the trouble to cash his check at the bank of the com- pany; only in exceptional cases will he be able to do this at his domicile, or to give the check there in payment. The check system has undoubtedly great advantages for both parties, the payer and the recipient, where it can replace, generally without trouble, the cash payment ; but it is in many instances not adapted to the necessities of the man of small means, and, on the other hand, it requires more work than cash payment, considering the great num- ber of checks and the comparatively small amounts repre- sented by the wages. The delivery of the cash traffic receipts is effected, as a general rule, by the express companies, which are repre- sented at all stations, depositing them in the bank of the railroad company. ACCOUNTING DEPARTMENT. The handling of cash receipts and expenditures of the American railroads seems, according to our observations, to be strictly separated on principle from the industrial management. The union of the functions of our etats and kassenrat in one person, an official who is a board of esti- mate and cashier all in one, is unknown. This division an- swers, however, the purpose well. The controller of the company stands at the head of the estimating and accounting department, either under the supervision of the president, as this is the case, for example, with all the lines belonging to the Harriman system, or under the supervision of a vice-president. He is an im- portant personage in the domestic field, superintending the correct keeping of the accounts and at the same time watch- 149 ing over the economic management in all its details. But the greater or lesser success of a revisionary activity of this kind depends, exactly as with us, essentially upon the per- sonality and extensive experience, tact and supervisory abilities and the influence v^^hich he is able to acquire; we found also with American railroads essential differences in this direction. We made the acquaintance of a gentleman, one of the foremost railroad professionals, who, in his posi- tion as controller, has acquired such high regard and through it so great influence, that the president of the rail- road company, though not residing at the seat of the chief administration, attaches him permanently to his person in order to secure his services at all times. His case makes it clear how, through the regulations in general only, the outline of the activity of the controller can be specified, and how the performance of it depends entirely upon himself. It is evident that this proves right in a much higher measure than with us, considering the almost unlimited powers of an American railroad president, and becomes plainer still, as also the board of directors, whose confidential man the controller is at the same time, is after all too much removed from the inside of business, and as the secretary of the board by his dependence upon the pres- ident, as a member of the board, is not always in a position to assume an independent attitude. Although we had occasion to make the acquaintance of numerous leading railroad men, we did not meet one who was so thoroughly familiar with all details of railroading and at the same time so little bureaucratic as this gentle- man, who for a considerable number of years embodies so truly the tradition in one of the biggest railroad systems, the result of an amalgamation of many lines — a tradition 150 which guarantees the even continuity of business, although the leading president lacks the professional training. This is so much more gratifying, as the controller is a native of Germany, while the president hitherto has not proved friendly to the Germans, a further proof for the indispensa- ble qualities of our countryman, to whom we owe in every way a tribute of thanks. Other controllers of large admin- istrations with whom we became acquainted appeared to fulfil their task more in a routine way. The controller is further responsible for the regulation and carrying out of the accounting rules relative to the re- ceipts and expenditures, and for an effective control of the treasury department ; he has also, like the treasurer, the ob- ligation to keep the president at all times up to date as to the financial status of the enterprise. As a rule, not always, a general auditor — that is, a general revisor of accounts — is associated with the control- ler for the revisal proper and the direction of bookkeeping, who has under him again a number of revisor s (auditors) for the several centres of accounting. A counter-control of the entries in the financial department is carried on in the office of the controller or of his associate general audi- tor; as a rule, all pay-orders are required to be counter- signed before payment. The business of our traffic controllers belongs also to the sphere of the controller. There are mostly formed in the larger administrations separate offices of accounting (auditors) as follows: For merchandise freight. For coal freight. For receipts from passenger traffic. For disbursements. 151 For lines not amalgamated with the administration, standing under separate control. Finally must be mentioned the supervisor of traveling auditors, who supervise the controllers of the cashiers along the road. To all these persons are allotted, as far as neces- sary, assistants with clearly specified duties, and the neces- sary clerks. Bookkeeping regulations have been issued for keeping accounts of disbursements either by the organization itself, or, as for example, for the Baltimore and Ohio road, by the controller with the authorization of the president; for the Pennsylvania road (east of Pittsburg) with the authoriza- tion of the board of directors. It is based chiefly on the in- structions of the Interstate Commerce Commission, and is, therefore, the same in principle for the several railroad companies. The accounting has to be done under the following headings : I. Maintenance of way and structures. II. Maintenance of equipment. III. Conducting traffic (expenses for passenger and freight traffic, personal and administration expenses, in- cluding rents and leases for office rooms, etc.). IV. Conducting transportation (expenses for man- agement, machinery, workshops, telegraph, telephone, and electro technic service). V. General expenses. These include: The salaries of officials, assistants and office servants of the central administration. Rent, heating and lighting of the office rooms of the administra- tion, charges for printing and writing, public notices and the contributions to the relief funds of the company, etc. 152 VI. Construction and equipment (costs of new con- struction and acquisition of cars, locomotives, etc., acqui- sition of real estate, laying down second and third tracks, equipment of new tracks, etc.). VII. General ledger accounts (ledger payments for securities, mortgages and ground rents, costs of participa- tion in other concerns as well as in car trusts, taxes, etc.). For all the subsidiary concerns, like hotels, elevators, warehouses, etc., special accounts are kept, and in the ac- counts of the company there appears only the net surplus in the receipts. The general entry rules are as follows : When an officer is employed in several branches of the service simultaneously, his salary is to be accounted for in proportion. A classification of all persons employed and engaged in the operating departments is furnished to the bookkeeping regulation. It shows their official activity in the several branches of the service, and thus facilitates the entry of their salaries. The cost of purchase includes charges for repairs, as well as freight and the delivery charges ; on the other hand, the receipts for junk are credited to the expense account. The controllers of various railroad administrations, meeting for mutual benefit, have adopted important reso- lutions concerning further uniform rules for a system of keeping accounts. We cannot fail to appreciate that an earnest effort is being made, and that it has also produced some results of late years, to create a more intelligible sys- tem of accounting. The right way, however, seems not to have been found as yet; the system is too intricate, it re- minds us too much of the old German normal bookkeeping form with its complicated artificial structure. In fact, we 153 found, especially in the inferior bureaus, a multitude of statistic records which were very cumbersome, and still were based, to a considerable extent, on mere estimates. Such records may serve as statistics very well, but they are almost worse than worthless for practical service. TRAFFIC DEPARTMENT. While the branches of the service hitherto discussed do not deviate overmuch from our own conditions in their outward form, apart from the differences naturally peculiar to private railroads, more important dissimilarities are found in the administration of the traffic. The explana- tion for this is found not only in the fact that actually all American railways have to contend with a more or less strong competition (with us similar conditions existed for- merly), but we encounter also certain American peculiari- ties. The traffic administration includes in itself the whole of the passenger and freight traffic system (including bag- gage), but not the dispatch service, the forwarding service, and the disposition of the rolling stock. At its head stands a traffic manager, or if a separation had to be made between passenger and freight departments, as is the case with the large administrations, a freight traf- fic manager and a passenger traffic manager, each under the direction of a vice-president or a so-called traffic di- rector. The general service regulation assigns to the freight traffic manager the cultivation of the business rela- tions of the railroad company with the shippers, the fixing or approval of rates, and, to this end, the necessary confer- ences and agreements with other railroad companies or persons, subject to the approval of the president. 154 One or more general freight agents are acting under him, who have the support of the manager in the detailed duties for their district and who also attend to the publica- tion of the rates. The administration of the coal and coke freight busi- ness of the so-called coal roads — for example, the Pennsyl- vania and the Baltimore and Ohio railroads — is separated from the general freight traffic department, and is trans- ferred to special agents partly under the superintendence of the freight traffic manager, partly under the superin- tendence of one of the vice-presidents. The same holds good for the live-stock business, in so far as its extent makes it appear practical; even a general dairy freight agent is found occasionally. An industrial agent is met with, whose business it is to devote himself, in the interest of the railroad adminis- tration, to the development and expansion of industries. Claims for damages resulting from freight traffic are investigated everywhere by special agents, who operate partly at the seat of the central administration, partly in other larger localities. The officers of big railroad enterprises restrict their activity to the home traffic of the administration, while spe- cial arrangements are made for transit business. The cause of this is to be found in the whole development of American railroad affairs. The Pennsylvania Railroad (east of Pittsburg) has established two special lines for its transit business, the Empire and the Union lines, and has transferred the business of transit traffic to special traffic managers. They attend — invested with great authority — to their office independently from the general traffic mana- ger, and have charge not only of the traffic affairs proper, 155 but also of the claims for damages, as well as of the for- warding and dispatching business, under the supervision of the vice-president of traffic. All these higher officials, appointed to a special charge, have for their support, not only at their official seat, a staff of assistants, but they have under them, distributed over the several districts, frequently also in distinct localities es- pecially important to their service, a whole line of officials acting in the same direction. These maintain, the same as the leading officials themselves, in some cases, very well equipped offices. We shall come back to this subject later, as well as to the corresponding arrangements for the pas- senger tariff business. Where the passenger traffic is not subordinated to the general traffic manager, a passenger traffic manager is at the head of this branch of the service, whose principal duty consists in the opening and entertaining of a lively inter- course and association between the administration and the public using the railroad, and in the shaping and develop- ment of the tariff. He, or the general passenger agent subordinated to him, attends also to the printing and the distribution of the railway tickets, as well as to the entire publication and ad- vertising business. Subordinate to both of these are the division traffic agents, and, for still smaller districts, the district passen- ger agents. They are charged with the same duties for their territory in relation to the public. For the baggage traffic there is, in the large railroad administrations, a special general baggage agent. is6 TRANSPORTATION OR OPERATING DEPART- MENT. At the head of the operating department stands the general manager under the superintendence of a vice-pres- ident. With the large administrations his activity coin- cides no longer with that of a general director, to whoni was formerly entrusted the technical conduct of the entire enterprise, the lines being at that time less extended and the traffic not so heavy. Gradually departments hitherto managed by one and the same person have branched off into independent units. Under the supervision and responsibility of the gen- eral manager comes the entire operating service, including the forwarding, car and dispatch service, the service of the motive power and of the workshops, the service for main- tenance of the roads and of the telegraphs, the liability and insurance business, the intercourse with the United States mail and the police system ; this includes, with several ad- ministrations, also the acquisition of the materials for op- erating, coal and other materials ; in general, therefore, the entire service, in so far as no special departments are branched off. The organization downward shows, according to the several service branches united in this collective depart- ment, several more gradations in the large administrations. First of all appear as managers of particular branches of the service, the following : I. The general superintendent of transportation, who has under him the arrangement of schedules and the en- tire dispatch service (including the control of the rolling stock and the engines). A separation according to the op- 157 erative and machine technical service is not known, the opinion prevailing rather — ^perhaps not wrongly — that a uniform management of the locomotive and car parks has great advantages. To the general superintendent of transportation are assigned several superintendents in the larger administrations. 2. The general superintendent of motive power, for the maintenance of the means of operation. 3. The chief engineer of maintenance of way, for the entire maintenance of road, assisted by several assistant engineers. 4. The superintendent of telegraph. 5. The superintendent of police. 6. The superintendent of relief, savings and pensions. This officer is charged with the management and financial direction of the various funds, institutions, etc. (Com- pare the discussion of beneficiary institutions later on.) The sphere of service of all these officers extends over the entire province of the railroad company. The following are field positions, but they belong to the transportation department, consequently they are un- der the jurisdiction of the general manager : 7. The division general superintendents (chief direc- tors of operation), under whose authority are: 8. The district superintendents (directors of opera- tion). To the division and district superintendents is as- signed the supervision and direction of the complete serv- ice in their territory in so far as there are no separate parts, like the fixing of fares, freight rates and claims for dam- ages, resulting from passenger and freight traffic, as well as the workshop affairs, which are detailed to special offi- 158 cers. At all events, here also the operative, the machine technical, as well as the transportation and dispatch serv- ice are united in one officer, an arrangement which has proved throughout satisfactory in the judgment of officers of whom we have inquired. The supervision of the com- plete local service from one point is regarded as especially effective in the administration of business. To the super- intendents are assigned district engineers for the road maintenance service, supervised by the chief engineer, or his assistants, and train dispatchers for the control of the trains, as elaborately explained in the second chapter. To give an idea of the extent of the whole province of such an administration and its organization, we will men- tion that the Baltimore and Ohio Railroad, with a total length of track of 7,075 kilometers, with additional 1,745 kilometers of second and third tracks, has three divisions with thirteen district superintendents. This does not in- clude a special division formed for the City of New York, with two district superintendents for this division. In ad- dition, there is a special general agent appointed as rep- resentative of the administration in Pittsburg. The Pennsylvania Railroad (east of Pittsburg) has for a total length of track, 5,839 kilometers, of which 2,836 are single track, 1,739 double track, 698 three tracks and 566 four tracks, four divisions with twenty district super- intendents. The entire service of the business district under his control is united in the person of the superintendent to the extent described ; he carries the responsibility for this com- plete service and especially for its economical management. The superintendent further examines all disbursements and has a general supervision over all pay-offices of the 159 district, while their special control devolves upon the trav- eling auditors under the accounting department. There are, however, superintendents who are assigned to service at large stations only with no track duty. (The condition at the large Terminal or Union companies is discussed in another part.) Besides the district superintendents, the Pennsylvania Railroad has appointed a general agent, subordinate to the general manager, for each of the great traffic centres (New York, Pittsburg and Erie), and a resi- dent manager for the port of New York. With all these officers in leading positions are associ- ated not only the persons required for their assistance and representation, but also a corresponding staff of office and minor (auxiliary) employees. A peculiar figure is the superintendent of police. His position and that of his subordinates can only be under- stood in considering American conditions. Railroad police rules do not exist, nor does the local police, as a general rule, care for the railroads; they are for that reason com- pelled to help themselves when and where necessary. The organization of the railroad police is as follows : In the depots a number of constables are active, their uniform resembling somewhat the service uniform of the general policemen, who, in the first place, maintain order among the public; they make throughout a favorable im- pression. But as they lack in recognized authority, their services fail frequently at the very moment when the trav- eler needs them most — for example, in disputes with cab- men. Besides these policemen known as such, the admin- istrations keep a number of plain-clothes men — so-called detectives. These serve principally for the prevention and discovery of thefts and embezzlements. They have to keep 1 60 their eye on the freight storerooms, passenger and freight cars, pay-offices, etc. Certain officials who enjoy the par- ticular confidence of the administration act frequently as detectives ; they are not known as such to their colleagues, with whom they work together, but make themselves known by a badge in case of emergency. ENGINEERING DEPARTMENT. At the head of the not always independent construc- tion department stands, in the bigger enterprises, a vice- president ; for the rest, as a rule, under the president or one of the vice-presidents, a chief engineer. He is charged with the superintendence of construction of new roads and the total maintenance of the railroad tracks in operation. Sometimes this office is regulated so that a separate chief engineer is appointed for the operating and also for the construction administration. Still more frequently there is found a special chief engineer for the construction and maintenance of locomo- tives and cars and for the whole of the machine workshops (chief engineer of motive power). In all cases the chief engineer belongs to the general officers of the company. Under the chief engineer several engineers manage the sections for construction, for the ordinary maintenance of road, for the telegraph system, for bridges and other large structures, etc. To the engineers are assigned as- sistant engineers in the required number; some of these carry out searching examinations of the constructions on the spot and examine the work of the engineers active in the divisions, and for the superintendents. We found a peculiar office embodied in the engineer- ing department of the Illinois Central Railroad in Chicago, i6i in the so-called consulting engineer. He is expected to possess legal as well as technical knowledge. Apparently a purpose has been aimed at which is accomplished with us by the assistance of an administrative Streckendezernenten (track experts) in technical work. PURCHASING DEPARTMENT. Although the purchasing department appears, accord- ing to its designation, to be limited to the purchases, it has charge also of the sales, especially of the junk, in all ad- ministrations. The authority of the agent, who, as a rule, stands immediately under the general manager, but in some administrations under the president or one of the vice-pres- idents, is variously limited and defined in the organization statutes. In this respect about the same holds good for the purchasing agent or director what has been said of the controller. It depends mainly on the personality and the position, often also on the greater or lesser inclination of the president to assist himself personally in this branch of service. As a general rule the president reserves to him- self, frequently with the co-operation of the board of di- rectors, the ordering of cars, locomotives, ties, rails and coal. In other respects the purchasing agent provides for the requirements of the transportation department inde- pendently. The Pennsylvania Railroad (east of Pitts- burg) has, however, limited his authority to the extent that he cannot decide independently on more than three months' supplies or on orders exceeding $10,000. We found that the purchasing agent of the Baltimore and Ohio Railroad, who had been a clerk in the central of- fice of the president before occupying his position and as 162 such had evidently earned great confidence, is enjoying a great deal more independence. He is authorized to order the necessary supply of rails for several years to come, thus profiting by favorable conditions in the market. In general it may be supposed that such orders beyond the fiscal year are not viewed with favor, on account of tying up the resources of the administration. Contrary to the rather independent position of this officer, it appears to be of subordinate significance in other administrations, where the purchasing agent has simply to execute distinct orders of the general manager. In so far as this relates to articles which have a fixed market value, this appears natural, especially in America, where the big trusts keep prices on an even level. In fact, this circum- stance, having become more and more the rule, has greatly diminished the importance of the position and the freedom of the purchasing agents. In so far as this is not the case, all depends, even to this day, on the extent to which the purchasing agent is worthy of confidence. For a whole line of supplies, which are produced on a large scale in the interior of the country and which are sold by commission houses at the more important centres of trade, there exists no scale of prices known to outsiders. In these instances it depends essentially on the purchasing agent to make the largest advantage accrue to the railroad company. In general the manufacturer has fixed the price he wants to obtain under all circumstances. It includes the commis- sion intended for the broker in a fixed percentage (ordi- narily 5 per cent.) ; it represents the limit within which the price for the railroad administration is to be bargained for. The honest purchasing agent will give to his administra- tion the full benefit of a reduction in the price obtained by 163 cleverly availing himself of a favorable turn in the market, or from the commission house under pressure of the com- petition mostly existing. We were, however, assured on good authority that nothing strange — and this is significant — is found in the purchasing agent putting into his own pocket the profit gained by a division of the commission with the commission house. This may find its explanation in the fact that the purchasing agent of some railroads is allowed too low a salary — at least, according to American ideas. It was related to us that a president, who died a few years ago, and who was formerly his own purchasing agent, had, in wise consideration of the circumstances, fixed the salary of a special purchasing officer appointed by him as high as a vice-president's and that the company fared quite well by it. A remarkable arrangement was found in one railroad administration which probably is, however, used also by several others. It consists in the clerks of the purchasing agent taking their lunch in the administration building, and being obliged to do this in order that they may not meet contractors during business hours in public places. The clerks of the other offices pay a small amount for the use of this institution, but they are not obliged to take their meals in this lunch-room. Concerning the sale of junk, general rules were not obtainable; it is subject only to the examination of the con- troller, to whom must, of course, also be submitted the written accounts relating to the purchases. The administration of the main, branch, and local storehouses is performed by storekeepers. The business intercourse between the storekeeper and the service sta- tions, especially the examination of the latter's requisi- 164 tions, is different, according to the entire manner of ad- ministration of the several railroads. (More particulars relating thereto follow in the tenth chapter.) LEGAL OR LAW DEPARTMENT. The division for law matters, which stands, as a rule, immediately under the president and is administered by the so-called general counsel, has, in consequence of the pe- culiar character of the American railroads, an essentially different significance from ours. This is the result of the fact that on one side the American railroads lack in general the public protection of the law, and that they represent, on the other, an industrial and financial enterprise which is subject to the vicissitudes of daily life. Further because they are extended over large territories, and in many cases are subject to a long line of separate jurisdictions. The chief attorney is the general counsel. He acts not only for the executive of the company, but also for the board of directors, and must enjoy the general confidence if he is to fill his position properly. Under him act his assistants, counsels and solicitors, who divide the work, as a rule, in this way : one attends to litigations, while the other carries on the activity which we designate as "voluntary jurisprudence." These officers are located at the seat of the central administration. Besides these officers there are appointed so-called district attorneys or solicitors, and under them local solici- tors or attorneys, because the territory of administration is divided into legal districts. The Pennsylvania Railroad (east of Pittsburg) has divided its net for this purpose into seventy districts and has appointed one solicitor for each district, who must have his domicile or practice in the dis- 165 trict. In a whole series of cases it employs attorneys also in other departments, but even these are regarded as offi- cers of the company. REAL ESTATE DEPARTMENT. At the head of the real estate department stands the real estate agent, under the supervision of one of the vice- presidents; he has charge of the real estate of the com- pany and the safe-keeping of the deeds and documents. He has to attend to all purchases, sales, rent, and lease contracts relating to real estate. Where the realization of the tracts of land to the right and left of the track granted by the State or Nation to the railroads exerts a comparatively large influence on the formation of the financial status of the administration, this department is of corresponding larger significance. This is the case especially in the West. In some companies the business belonging to the real estate agent is divided among several higher officials work- ing independently beside each other. The Illinois Central Railroad has thus a land commissioner, a tax commissioner and a custodian of deeds. INSURANCE DEPARTMENT. The department of insurance stands under the direc- tion of a superintendent and under the supervision of a vice-president, and comprises the afifairs concerning fire, maritime and other insurances, as well as indemnification of persons injured or killed in operating the railroad, etc. Finally there are to be mentioned the voluntary relief department, for the administration of charitable funds founded on voluntary contributions of the officers against i66 accidents and sickness ; the employees' saving fund, a com- pany savings bank, and the pension fund. All these insti- tutions will be further spoken of in the chapter on benefi- ciary institutions. ADMINISTRATION BUILDINGS, OFFICE ROOMS. The local housing of the officers is very different, even for external causes (whether in new or old administration buildings). As a general rule it is preferred — at least, in the cen- tral administration and in the larger freight depots — to house a large number of officers in large rooms, which seems to comply with the wishes of the officers themselves. Rooms for single officers are very rarely found in the United States; even the higher officials share, as a rule, their rooms with several clerks. Anyhow, the latter occu- py an adjoining room connected by an open door. This manner of housing the personnel corresponds with the cus- toms apparent in the rest of large business enterprises, from which the railroad administrations hardly diverge in their office arrangements, as well as in regard to the ca- pacity of their appointees. A clerk who works in the office service of a railroad administration is not distinguished from those in the rest of business enterprises, a reason why changes from one business to another take place much more frequently than with us. A drawback of large office rooms consists in the poor light they afford; we have not often found well-lighted rooms. The reason for it is found in the manner of con- struction of American buildings. In a great number of rooms we saw artificial light burning all day. That such conditions are generally not favorable to the eyes is evident 167 from the fact that a not inconsiderable number of em- ployees use green eye-guards. We found really favorable conditions in this respect in the central administrations of the Pennsylvania (east and west of Pittsburg), in Philadelphia and Pittsburg, in connection with which we must remark that the almost new administration building of the Baltimore and Ohio, in Bal- timore, has fallen a victim to the serious conflagration in the year 1903 ; this building also, it is said, contained excel- lent rooms. While the administration building of the Pennsylvania in Philadelphia is not new and has apparently gradually been enlarged and added to, according to growing needs, the one in Pittsburg has been erected from the outset on a sufficiently large scale — twelve stories high, with basement and mansard roof. While the Philadelphia building con- tains, following a former custom, small but, on the whole, well-lighted rooms, the one in Pittsburg shows an exceed- ingly clever turning to account of space, and contains large and, as far as we could see, equally well-lighted rooms throughout. Whatever one may think of the so-called skyscrapers, they also have undoubtedly their good sides. Especially when a building of this kind is used for a single concern, it has extraordinary advantages. There can be no question of the difficulty of personal intercourse on account of extension of space, as is to be found even in our own latest office buildings, where a num- ber of elevators are distributed over the several parts of the building; an ample number of local and express lifts was always operating in the buildings we inspected. When one considers that in the administration build- 168 ing of the Pennsylvania, in Pittsburg, erected on a compar- atively limited ground surface, about 1,250 employees of the central administration are active, whom one must call well- housed, considering the cubic measurements of the space at disposal, one cannot help declaring that the problem has been solved in a practical manner. With that the first floor and the basement, used as a railroad reception hall, with all the necessary accommodations for the public and the road, are taken away from the central administration. An enormously spacious court-yard in the middle of the building admits an ample supply of air and light. It is true that other high business buildings which we have in- spected were less favorably arranged. In the many-storied hotels also the conditions of light in the corridors and in rooms facing the inner yard were not particularly good. In so far as we, as non-professionals, believe to be jus- tified in judging, we feel obliged to express the opinion that the idea of the skyscrapers encroaching upon the influx of air is erroneous, providing the buildings stand isolated. On the contrary, they promote draft and act as purifiers of air. Every one who is familiar with the conditions of the Ca- thedral Piazza in Cologne knows that there is found, throughout the year, a lively draft of air produced by the isolated height of the cathedral. Even where whole streets of skyscrapers have been erected, so-called cafions — for instance, in New York — we have not observed an es- sential vitiation of the air. For safety in case of fire there are provided in Amer- ica not alone for skyscrapers, but for ordinary business buildings and frequently also for dwelling-houses, outside fire-escapes, whose location, as far as necessary, is made known by special, mostly transparent, lighting devices visi- 169 ble from the interior during the night. Anyhow, it has not been shown as yet that there is more danger of fire for the tenants of skyscrapers than for those in other structures. On good authority it has been reported to us that a short time ago, at a fire in Chicago, about 500 young girls who were all employed in the burning building, made their exit over the fire-escape and reached the open air in perfect safety. At all events, the fact that these buildings serve solely for business and not for dwelling purposes makes the danger from fire appear less in itself. Viewed from a practical standpoint, the American con- struction of business buildings for railroad office purposes represents better types for us than the Italian ones of old and new style which our architects prefer to take as models. In the Pittsburg administration building we found great pleasure in inspecting the drawing-room containing enormous surveys with excellent light and the installation of apparatus for producing blue prints by electricity. BUSINESSLIKE DISPATCH OF OFFICE AND ACCOUNTING MATTERS. The dispatch of the office routine — that is to say, the whole inside administration service — is of a different kind in America than with us. A co-operation in the sense that the directing officer, referent or desernent, confers with the office manager or gives him written directions for the car- rying into effect of certain orders, or refers the matter to a secretary, is nearly everywhere unknown. Evidently this is the result of the development of railroad affairs. The administrations had a small beginning; the managing offi- cers dispatched all business themselves, or they left the exe- cution to a few men in confidential positions, who made use 170 of the clerks as mechanical forces. This procedure is still the rule to-day. As far as in any way possible, the presi- dent, the vice-presidents, general managers, general super- intendents, superintendents, and all other officers in lead- ing positions, dictate to the clerks, who mostly are familiar with shorthand, the contents of the letters to be written verbatim, and that, if possible, immediately after the re- ceipt of the letter to be answered or of the order to be exe- cuted, etc. This procedure is so far carried out that the leading officer, on receipt of the mail, indicates without de- lay the replies to be made, provided he cares at all to occupy himself with the matter ; this has been even more simplified of late, in that this officer sometimes talks the replies into a phonograph which is used later by the typewriter in com- posing the letter. The clerk is mostly not only a stenographer, but a typewriter as well ; every higher officer and those to whom clerks are assigned (dispatchers, in this sense) employ at least one typewriter, who, of course, has to make the final clean copies, as far as such are made at all ; letter-writing, in our meaning of the word — that is to say, rough drafts and clean copies — are hardly customary. Original draft letters as documents to be kept are in general unknown, car-' bon copies serving, as a rule, as vouchers, which can be pro- duced in great numbers on the typewriting machines used nowadays. Such carbon copies are also attached to the reports from the lower to the higher officers when they have to pass through several hands, to which is attributed great value with the American railroads, inducive not ex- actly to the dispatch of business and probably not always to the advantage of the objective treatment. Not the last reason for this is the desire to emphasize the personality as 171 representing an office, which is undoubtedly advantageous in another direction, as every one feels called upon and in duty bound to take a personal stand in the matter. For instance, a plan for a structure by the Pennsyl- vania Railroad has, under all circumstances, to pass through several stages. The plan, if not quite insignifi- cant, is, as a rule, drawn up by an engineer of the construc- tion department and forwarded to the chief engineer, ac- companied by all papers and estimates, who adds his mar- ginal notes and forwards it to the general superintendent. In a similar manner it proceeds to the general manager and the vice-president. The latter decides finally, and then only when the matter is not of considerable importance ; in all other cases it is further forwarded to the president, and from him, without exception, to the competent committee of the board. The so-called short-notice intercourse is known only in the sense that the parties concerned add their marginal notes one after the other, according to regulations, each re- taining a copy of the plan of the building project. Other- wise it is not in use, even in the office routine of the admin- istration. Added carbon copies are regarded as sufficient in most cases, which, however, constitute no adequate sub- stitute for that short-notice intercourse, for the very rea- son that they are prejudicial to the quick perception of the essential points and that the general view of the whole is lost, without mentioning that the short-notice intercourse is especially apt to promote brevity in writing. This draw- back is in part compensated by the use of the English lan- guage, which in itself tends to brevity of expression through its whole structure and which has been enriched 172 considerably by the American business intercourse with a number of short, striking words and turns of expression. We have not seen any writings with the pen, although we have kept up a Hvely correspondence with various ad- ministrations and its several offices during our trip; even such inferior documents as bills of lading are not filled out by the pen. On the other hand, we have before our eyes a daily report of a train conductor executed on the type- writer, of course not during the trip but afterward, which proves the general tendency toward performing the writ- ing business in the mechanical way. Penmanship, in our meaning, we have found nowhere. One cannot fail to appreciate that the methods of working here described, especially the direct dictating of the final copy, is apt to abbreviate the routine of business, provided no abuse or exaggeration take place ; otherwise it produces the reverse, just as when the necessary concentra- tion or ability are lacking. At all events, practice is neces- sary. We have not been in the position to study a more voluminous business document from beginning to end, in order to test whether or not explanations became necessary on account of the shortness of time preventing a clear dic- tion. This would not be astonishing under the circum- stances described. It may be regarded as positive, how- ever, that the too great facilitating of writing is seductive and apt to bring on an increase of quantity. It is not doubtful to us, according to our observations, that with American railroads, as a general rule, more writing is done than is at present the case with the Prussian State rail- roads. We were struck by this in the purely official work, especially in the accounting and dispatch offices, of which we shall speak more in detail further on. The drawing of 173 thousands of checks a month, as is done in the central office of the Pennsylvania Railroad (east of Pittsburg), for all manner of expense items, even of the most insignificant amount, would not be conceivable if there were not so many auxiliary means in existence. And yet the whole of it means a bulk of writing that cannot be done away with too quickly, according to our view. The same holds true, for example, of the numerous carbon copies of the way bill, of which we have counted as many as eighteen. Their preparation, by means of copy- ing on the writing machine is in itself no additional work, but undoubtedly the sending of them to each transit ad- ministration concerned (in our opinion quite superfluous) is a great encumbrance. It must be taken into considera- tion here that the rate of superfluous work cannot be esti- mated when a revision by one of these receiving officers is undertaken. It may remain undecided whether or not various machines, facilitating the preparation of statistics, which we saw used especially at the New York Central road, are a contributory cause that statistics enjoy an esti- mation with American railroads far surpassing their real value. At all events, we can learn from the extent of sta- tistical work in America how it is not to be done. One great advantage indeed has the habit of copying all work: the press can be served quickly, and it is well known that the relations with the daily press are highly cultivated by the American railroads. A further peculiarity of the American business life equally popular with the railroads consists in the most ex- tensive use of the telephone. Not only all higher officers, but a large number of clerks and indeed all business rooms used by individuals, are equipped with telephones. They 174 are installed, if possible, in such a way that telephonic com- munication can be established not only in the building, but also in the town and by long distance wire with the more important district centres. It is very pleasing, especially in American business life, to notice the greater sensibility of the apparatus, which does not require such loud speaking as with us and the es- sentially quicker establishment of communication, which may be accounted for by a more ample equipment with wires. The establishment of a direct connection by the caller without intermission of the central office, which is with us still in the first stage of development, is also at the height of perfection in America. In one direction both institutions, the use of the writ- ing machine and of the telephone, have a disadvantage in our opinion — they disturb the quiet of the office. It ap- pears, though, as if the Americans were not troubled by it ; we, however, received not exactly the impression that in an office room used by a great number of persons, some of them dictating, others operating the writing machines, still others using the telephone, the quantity or even the quality of the work would be benefited thereby. But the American, as said before, appears to be cut out of harder wood, as is evident from the activity of the telegraph operators in the offices of the train dispatchers, where a whole line of instruments is in operation, which, in contradistinction to ours, have no Morse-tape, and conse- quently compel the operator to receive the messages by ear instead of by sight, notwithstanding the noise of the plant and in spite of the use of telephones in the same room. Concerning the filing of the accumulating business papers, the principle seems to be also prevalent with the 175 American railroads that it is best for the officer to keep his business matters in his own custody. We found a fihng office proper only in the West. Here, however, the same condition was apparent which we have frequently observed on other occasions. The system adopted is practical in itself. One official is sufficient to attend to this business for eighteen to twenty employees, although all papers sent and received were registered. All papers relating to the same business — for the entire office there are about five hundred different ones — bear the same file number, similar to our personal references. It is, however, of no practical value to preserve these papers, as is actually done, for at least ten years, and to render more difficult, by this enor- mous accumulation, the finding of necessary documents. An institution not exactly pleasing, which, however, to a smaller extent, existed with the former large German private railroad administrations, is the keeping of messen- gers. An officer in a leading position can scarcely live without one or more messengers. We saw these gentle- men lounge in the anterooms of these office mighties up to the number of three without real occupation. Female employees are employed in the office service in considerable numbers, mostly as stenographers and type- writer operators and in the telegraph offices, particularly also for the sale of tickets; therefore, about in the same branches of service as with us. The assignment of really responsible positions to or the management of offices, etc., to female employees occurs seldom; on the other hand, there is mostly no difference made in the compensation for services between them and the male personnel. 176 MECHANICAL AUXILIARIES IN THE INTERNAL BUSINESS CONDUCT. We saw mainly the Smith-Premier and Remington typewriting machines used as auxiliaries for facilitating the office activity. Machines of German origin we found none. However, calculating machines which we saw in use were mostly of German manufacture ; they are used for addition and division ; in the first place, however, for estab- lishing the required proportional numbers, percentage rates, etc., required in statistics. The machines worked with trustworthiness and speed. We saw no better ma- chines than those which are known and used by us, not even at the World's Fair in St. Louis, where these machines were found in a conspicuously large number. 177 FIFTH CHAPTER. Officers and Employees. General Position. — Common Regulations for Officers and Em- ployees. — Conditions of Applications, Appointments and Service. — Remuneration. — Wages. — Length of Service and Time of Rest. — Disciplinary Measures. — Unions of Officers and Employees. — Total Number of Personnel Employed in the Service. GENERAL POSITION. The railroads of the United States employ at the pres- ent time a personnel of 1,400,000 officers, employees and laborers in round numbers, including about 60,000 to 70,000 men employed by the express companies, so that about 1.7s per cent, of the inhabitants of America are act- ive in the railroad serivce. Deducting the number of old men unable to work, of women and children from the num- ber of inhabitants, it results that a very high percentage of all able-bodied persons is engaged in the railroad service. The railroads, therefore, play a prominent part in the life of the American people, not only as the principal institution of traffic, but also as providers of work (employers). It is readily understood that the part of the population employed by the railroads shows all the qualities generally peculiar to the American. He is, to whatever class of offi- cialism he may belong (if one can speak at all of an official class in our sense) a gentleman. The intercourse between superiors and subordinates is, as a general rule, much freer and more unconventional than with us; the formal sub- serviency frequently noticeable in Germany is unknown here. If this is apparent already in the official life, any distinction whatsoever vanishes in the intercourse outside of the service. Apart from the predomination of greater liberty every- where in America, which we are tempted to call natural ease in the relation of man to man, this circumstance may be explained in a large measure by the fact that official ca- reers by preferment, in the sense that an applicant can enter a superior class of the service, jumping the lower grades, does not exist. The beginner must start in the lowest grade of the service branch — this is the rule — without re- gard to his general education ; persons are found, therefore, in all grades of the service having a higher degree of gen- eral education than is necessary for the office held tempo- rarily. This explains, without doubt, that the officers in general make so intelligent an impression. If the employee stands the test in the service, all posi- tions are open to him. In so far it is true that in America men who have begun at the bottom to this day occupy the highest places in the railroad administration. This, how- ever, must not lead to the belief that this would be possible without real education, though this may be acquired only during the service. A brakeman will not be promoted to a higher position for the reason alone that he fully under- stands his duties as brakeman. If it has happened that such a one became finally president, his beginning as a young brakeman does not prove that he has been without the general education which finally was the reason for his advancement to higher positions. i8o It is true, indeed, that Mr. James J. Hill, one of the most remarkable railroad presidents and one of the most noted men of North America, in much the same way as Abraham Lincoln, one of the greatest presidents the United States ever had, entered practical life as a wood- chopper without much education. But exceptions like these only confirm the rule. No value is attached, as a rule, to practical training ac- quired outside of the practical service. In filling positions which in themselves appear to make a technical education desirable, and, in our opinion, require the same, the lack of it is frequently overlooked, as is evident with a large num- ber of superintendents ; moreover, the general tendency is not in favor of the selection of superintendents (about iden- tical with our former traffic directors) from the ranks of academical civil engineers. The opinion prevails that academical preparation influences rather unfavorably a man placed in practical service. This goes so far that dis- trict engineers and roadmasters, assigned to the superin- tendent for purely technical purposes, are selected frequent- ly from among persons without technical education. On the other hand, we think we have observed that the better managed railroad administrations select for the construct- ive activity, including the safety service appliances, more and more scientifically trained civil engineers. The former practice to recruit the train dispatch oper- ators from trained mechanics has been abandoned in many instances, because experience is said to have taught that employees thus schooled pay more attention to the engine than to the train dispatch service. It results therefrom that a division between technical and non-technical branches of the service does not exist, in i8i fact, in the American railroads. This is apparent also in the frequent change of duty itself of the higher and even of the leading ofificials. The personality as such is paramount, a fact that can be also observed in other directions in America. In this and the preceding remarks the reason can be found vi^hy, in America, the tendency to push one's own personality in the foreground is so distinctly apparent. This has certainly its good sides, as such prominence is in general only possible through excellent performances, which, as a rule, are also acknowledged and appreciated in the person. It has, how- ever, its dark sides also, as it opens the door to syco- phancy. As a rule, the appreciation of an officer according to his deeds and his whole personality is in the hands of his immediate superior ; in the last instance in the hands of the chief of his department. We made the acquaintance of a gentleman in a prominent position with one of the biggest systems who, though recognized as excellent in his depart- ment, in fear of being outclassed, appointed only per- sons of whom this was not to be apprehended, and who, when he found he had made a mistake, never allowed such officers to assert themselves. Similar cases are said to be by no means rare. They have their cause if not their ex- cuse in the weakness of human nature, from which not even the large-minded Americans are free. In the abstract, however, the spirit animating the American railroad em- ployees can be generally commended and praised. GENERAL REGULATIONS FOR OFFICERS AND EMPLOYEES. All officers drawing a fixed salary have to devote their 182 whole activity to the service of the company. Persons above the age of thirty-five years are not to be appointed in the service of the company. Exceptions in both respects can be made only by resolution of the board, which, as a rule, passes also on the amount of salary for the officers, while the wages of the lower employees, the clerks, etc., are fixed by the managers of the respective service depart- ments. The latter are responsible for the prompt disposal of all work in cases of dismissal or sickness of employees, appointing, if necessary, special men temporarily. This responsibility extends generally to all persons employed by or under them. Persons addicted to drinking, or some other vice, or whose behavior is rough and coarse, are not tolerated. Every ofificer and employee is obliged to become ac- quainted with the rules concerning him and his duties. Ig- norance of the rules will not be accepted as an excuse. Apart from certified sickness, no officer is allowed, without special permission of his superior, to remain away from duty. All officers and employees who have charge of a cash office or receive moneys for account of the company have to give security in cash. The subordinated pay-office clerks furnish the security, however, not to the railroad company l)ut to the chief of the pay-office. The amounts of security are regulated according to the average monthly receipts and show a minimum of $500 to a maximum of $50,000 (the latter in the case of monthly receipts between $250,000 and $500,000). It is evident that securities required as high as that are only in rare cases furnished from the pri- vate property of the bonded officer. Special companies exist in America for furnishing security of such kind. 183 These rules, the principal points of which have just been quoted as far as available material permitted us to as- certain them, are in force in all companies, even when not exactly identical. CONDITIONS OF ENGAGEMENT, APPOINTMENT AND SERVICE. The American Railway Association has been engaged for a number of years in establishing rules for the engage- ment to the American railroad service personnel, so as to render uniform, at least in a general way, the require- ments of the applicants as to physical ability and primary knowledge. The association adopted, on April 5, 1905, the following conditions, which are applied not only at the first engagement of applicants, but also for the sub- sequent promotion to higher positions and also in cases of re-examinations: PHYSICAL ABILITY. I. The Test of Eyesight. The incumbent of a place in the operating service must be able to recognize the sig- nals distinctly and must possess a clear discernment of col- ors. The requirements are different for the particular po- sitions in the service. (a) Locomotive Engineers, Firemen, Train Conductors, Baggage Masters, Conductors, Brakemen, Track Watchmen and Switchmen. REQUIREMENTS (without Eye-Glasses). For Engagement. For Promotion For Re-Examination 1/1 Correctness of vision on one eye and not less than 2/3 correct- ness of vision on the other eye. Vi Correctness of vision on one eye and not less than ^/j correct- ness of vision on the other eye. *) According to the special regulations for each particular railroad. 184 ) . . . correctness of vision on one eye and not less than * ) . . . correctness of vision on the other eye. (b) Station and Switch Track Personnel, Signalmen and Telegraphers. REQUIREMENTS (without Bye- Glasses). For Engagement For Promotion For Re-Examination Vi Correctness of vision on one eye and not less than '/a correct- ness of vision on the other eye. ^/a Correctness of vision on one eye and not less than '/j correct- ness of vision on the other eye. *) . . . correctness of vision on one eye and not less than *) . . . correctness of vision on the other eye. *) (c) Other Engine, Train and Station Personnel, Inspectors of Cars and Engines, Master Mechanics, Bridge and Track Foremen. "/j Correctness of vision on one eye and not less than '/j correct- ness of vision on the other eye. (d) Gatekeepers. '/j Correctness of vision I on both eyes. 'I3 Correctness of vision on one eye and not less than V2 correct- ness of vision on the other eye. . . . correctness of vision on one eye and and not less than *) . . correctness of vision on the other eye. *) , . . correctness of vision on both eyes. If the applicant does not give satisfaction without eye- glasses in the case of further examination under b, c and d, in the case of an engagement, a promotion or re-examina- tion, he can still be retained in the service, engaged or pro- moted if he attains the prescribed sharpness of vision with the aid of eye-glasses. The Snellen text and letter table are used in the ex- aminations. The proceeding and the admissible limit of defects are fixed in particular. Precise tables (after Holmgren and Dr. Thomson) and instructions for the determination of the discernment of colors are in existence also. The light of colored lan- terns is also used for examination purposes. 2. The Test of Hearing. The applicant is expected to be endowed with accuteness of hearing ; he must be able *) According to the special regulations for each particular railroad. I8S to follow a conversation in ordinary tone at a distance of twenty American feet. For the purpose of promotion and in the re-examination the same is required at a distance of ten feet and with closed eyes. In the examination an acoustic meter may be employed. The time for re-examination of the ability in power of vision, discernment of colors and hearing is fixed by the several railroads according to their own judgment. 3. Other Physical Requirements. The applicant must have the strength necessary for his position and show a generally healthy constitution; he must also be able to talk without difficulty. Exact rules regulate these quali- fications also. Acquirements. Previous to the engagement for a position in the service of the character just mentioned (with a few exceptions) an examination is gone through which must prove that the applicant is able — (a) To read: the rules of service; various handwrit- ings ; the time schedules ; the times of the clock. (b) To write: the designations of various railroad service positions; the names of several stations of the railroad into whose service he desires to enter and the time schedule of several trains for these stations. (c) To figure in the four divisions of arithmetic. (d) To show satisfactory power of conception and knowledge of the language ; and, finally, (e) That he knows the duties of his job. The resolution of April 5, 1905, concerning the con- ditions of engagement of the operating staff, means great progress; it shows, at the same time, that the wholly ar- bitrary appointment of applicants, of which we spoke be- fore, is incompatible with the safe operation of railroads. 186 More extensive examinations, as with us, are, however, not known as yet ; for the promotion into higher positions the practical quahfications are usually considered as the best test, (As late as in the fall of 1905 an article in a trade paper of high standing, the Railway Gazette, com- plained seriously of grave evils in the appointment system of the American railroads. At the same time, the estab- lishment of a special railway employment bureau was rec- ommended. ) No weight is attached in general to seniority in serv- ice, so that all the varieties of age are represented in all grades of the service. Still beginnings of a system of se- niority are found — for instance, with the Baltimore and Ohio Railroad. ("Rules and Rates of Pay for Teleg- raphers," April, 1904.) In general, however, it is insisted- upon that tried men are promoted as quickly as possible in their places, so that in responsible positions on an average men in the prime of life are found. Officers who have filled their places satisfactorily, but who no longer show the required activity on account of ad- vancing age, though appearing otherwise still useful, are appointed to places of less responsibility, or they remain — if they happen to occupy a high position — nominally in the place, while the functions of the office are performed by another officer — as a rule, their former co-operator — who in that case carries the title "assistant" before the designa- tion of the office — for instance, "assistant controller." The president and those vice-presidents, who are at the same time members of the board of directors, are sub- ject to election and annual re-election by the general meet- ing of the stockholders. The responsible officers of the 187 central administration and the responsible officers of the division administrations, designed as general officers, are appointed, as a rule, by the president and confirmed by the board. The appointment of all other officers is made by the chiefs of departments, with the approval of the presi- dent and sometimes of the board also. All these officers can be removed from their office by the same powers at any time, subject to their possible claims for indemnity. A permanent appointment for life is unknown; all agreements, which are rarely made in writing, are, as a rule, subject to yearly notice or removal. All other employees whose employment is not fixed by the business regulations, as well as all persons appoint- ed to assistance work, like the clerks and typewriters and the inferior employees, can be discharged at any time with or without notice. When the discharge has been decided upon, it takes effect immediately as a rule, and that mostly under allowance of a week's wages for those engaged without notice. For the employees of the outside service, including telegraphers, there are issued printed schedules of pay and rules and regulations governing engineers, firemen, conductors, trainmen and telegraphers, instead of special agreements, to be handed to each employee. These employment blanks are recognized in nearly all railroad administrations by the respective heads of depart- ments, as well as by the chairmen of the interested brother- hoods. They contain not only the statements concerning the amount of wages, the schedule of further compensa- tion, the hours of labor, etc., but also the specified duties. (This subject will be treated further on in the general dis- i88 cussion of the relations of the railroad administrations to their employees.) SALARIES— WAGES. As a rule, salaries are paid monthly and that after the duty is performed. Their amount varies greatly in view of the variety of the activity of the officers and the extent of the railroad administrations and for a number of other reasons, even for analogous classes of officers. This holds good particularly for the salary of the president, in so far as in his case it can be called a salary. The president of a big administration is said to draw from $50,000 to $75,000 a year from his own railroad, and in addition further remuneration for his manage- ment and control of affiliated or other railroads. The yearly salary of a vice-president is said to be between $9,600 and $18,000. We were not able to ascertain whether and to what extent the president and the vice-presidents, as well as other leading officers (general officers), enjoy additional incomes, like dividends, profit sharing, etc. It is not to be doubted that such additional revenues are very considerable with several railroad administrations. The lowest salary of a general manager of an admin- istration of some importance is said to be $12,000; that of a traffic manager and a general superintendent of trans- portation is about the same. The controller of a great railroad system received a salary of $15,000 and his subordinated auditor $10,000, we are told. Notwithstanding this, the latter threw up his office because he could obtain a more remunerative posi- tion. 189 The yearly salary of a chief engineer begins with about $6,000; that of a superintendent of motive power with $7,200. The general division superintendents draw about $7,200; they enjoy free service quarters and have the priv- ilege to keep two colored men as servants, at the expense of the company. The yearly salaries of the district superintendents vary between $2,400 and $6,000; besides, they have free service quarters and one colored man as servant. On the other hand, they are not allowed any mileage, but are only reimbursed for their cash expenses of all kinds during their service trips. In most cases they have, however, as well as the higher officers, a so-called private car at their disposal, which, as we had occasion to observe ourselves on several trips, is not only equipped with all imaginable comforts, among others a bath-room, but also with a serv- ant and cook. This car is fitted out for serving meals and drinkables of all kinds, as well as cigars, etc., and that to an extent and in a way that guests can participate in the meals at any time. The outfit and provisions vary, of course, ac- cording to the position of the occupant of the special car. The engineers assigned to the district superintendent draw a salary of about $1,800 to $2,220. Reliable infor- mation concerning the incomes of the rest of the higher officials could not be obtained. The salaries of the superior officers not mentioned here could, of course, be ascertained without difficulty by comparison with officers of about equal rank in the or- ganization, but the figures which we quoted are sufficient to characterize the situation. 190 The remuneration, ordinarily fixed per day, of the clerks and the typewriters, varies between $50 and $80 per month. The so-called head or chief clerks receive pro- portionately more. In Portland, Oregon, we learned from a German assigned to us as a guide, who for thirty years was in the service of the company and is charged with the compilation of the passenger train schedules, that he receives $80 per month. A clerk of the Baltimore and Ohio Railroad in Pittsburg explained that the salary of clerks in his administration amounted from $75 to $80 a month. Out of this the single man pays $30 a month to his boarding-house (full board and lodging). The station agent of a large Western administration draws $180 a month; the assistant station agent, between $125 and $150; the chief train dispatcher, $120 to $150; an ordinary train dispatcher, $80 ; the locomotive engineer averages $130 to $140 per month, his remuneration being based in the main on work by the hour ; the fireman, 55 per cent, of this amount for equal service ; the conductor every- where, about $150 to $180, and his brakeman, 55 per cent, of this sum. It struck us as strange that the income of several classes of service, according to reports, is smaller on the Eastern railroads than on the Western ; according to them, a locomotive engineer obtains in the East only $115, a fire- man only $66, and a brakeman only $61.20 a month. Within these amounts the compensation for work of extra hours is considered in all cases according to their average. A higher cost of living could not explain these differences, as it does not exist; on the contrary, provisions are even cheaper in the West than in the East. 191 As a reason for a higher rate of wages for the con- ductors, compared to those of the locomotive engineers, the explanation was given us that it was the intention to keep the conductors from temptation by providing ample wages ; unfortunately this is said not to have proven effective. The average daily salaries and wages for the entire railroads of the United States are given by the statistics of the Interstate Commerce Commission for the years 1893 and 1903 in the following figures: 1893 1903 General officers $8. 10 $11.27 Other officers 8.10 5 . 76 General office clerks 2.25 2.21 Station agents 1.83 1.87 Other station men i . 65 i . 64 Enginemen 3-68 4.01 Firemen 2 . 06 2 . 28 Conductors 3 • 10 3-38 Other trainmen i .92 2 . 17 Section foremen i . 75 i . 78 Other trackmen i . 22 i . 31 Switch tenders, etc i . 82 i . 76 All other employees and laborers i . 70 i . 77 A comparison of their daily average rates of pay and income with the wages and salaries of the German rail- road employees is very difficult. According to the data of American statistics it does not seem that the rate for the compensation of the employees has been arrived at by di- viding the total expenditures with the number of employees multiplied by 365. If this method were chosen in Ameri- ca — and it is the only correct method and in general use 192 with the German railroads — it would result in fixing the wages for all kinds of employment at a considerable lower average rate than is paid now. The greatest difference appears with the locomotive and train crews. The conclusion to be drawn therefrom is that in the American system only the days, possibly of ten or twelve hours, are considered on which the men have ac- tually done service; days of rest, of sickness, etc., not com- pensated for, are apparently disregarded. In multiplying the stated American daily rates with the number of days of the year, one would obtain sums of income which would surpass very considerably the earnings actually realized during the year. Still another circumstance has to be considered. Evi- dently the number of officers in higher positions of the railroads in the United States is comparatively much smaller than with us; this is especially true of the depot and dispatch service. One will have to accept as final conclusions from these considerations that the sum total of individual payments is divided by the total number of officials and laborers in all branches of the service. If this method of computation is applied to the year 1902 it gives as the yearly rate of in- come for one employee: For all railroads of the U. S. . . .2,400 marks ($600.00) For the railroads in the Group II. (in the States of New York, New Jersey, Pennsylvania, Delaware, Maryland and a part of West Virginia) 2,505 marks ($627.00) Compared with this the average yearly expendi- ture for an employee of the Prussian-Hes- sian railroads is i>383 marks ($345.50) 193 When it is further taken into consideration that fully lo per cent, of the employees of the Prussian-Hessian State railroads are provided with dwelling accomodations in part free of cost, in part at low rentals, it appears that the serv- ice remunerations of the American railroad employees are by no means more advantageous than with us, especially when we consider the prices for provisions and other nec- essaries of life. It is further to be kept in mind that the tenure of office of the American railroad employee is by no means as secure as with us, and that the employees of near- ly all the railroad administrations up to very recently had to provide practically alone and unassisted for their old age and for their families in case of death. DURATION OF SERVICE AND PERIODS OF REST. It is a supreme principle, as has been pointed out, that every officer and employee, as soon as he receives a fixed salary, has to devote his entire energy and time to the service of the company. It is a matter of course that the leading officials, their assistants, etc., and the clerks of the general offices, as well as the employees of the division and district administra- tions, keep the usual business hours, customary all over Ihe United States. The working day consists, as a rule, of ten hours, including a recess of an hour and a half for lunch. Saturday afternoon is a half holiday, as the Sabbath rest begins in the business world of America, as in Eng- land, on the afternoon of that day. The chief clerks are on hand earlier in the morning for the purpose of opening the mail. The gentlemen active 194 in leading positions arrive somewhat later, especially if they have sufficient assistants. We were unable to fix precise rules for the officials in the outside service (including the freight dispatch). One may be governed, to a certain extent, by the regulation of the Baltimore and Ohio Railroad that a service duration of twelve hours, with one hour for meals, shall constitute a day's work for a station telegrapher. For a locomotive engineer the rule prevails with the Baltimore and Ohio Railroad that he is entitled to twelve hours rest after a service of fifteen hours, the conductors and firemen to ten hours rest after serving the same time. The Oregon Railroad Company allows to their loco- motive engineers and firemen, as well as to the train crew, only eight hours rest after an uninterrupted service of six- teen hours. Sleeping-quarters, in our sense of the word, do not exist ; where their establishment has been attempted by the administration they had to be abandoned on account of the aversion of the employees. In general the train crews staying out over night find accommodations in the so- called boarding-houses or in the rooms of the Young Men's Christian Association, and provision is made on the part of the administration that the men, if the distance is not too great, are summoned to service by the so-called caller. Only the office employees have anything like rules for Sunday rest. It is said that the telegraphers in the offices in Baltimore, Grafton, Pittsburg and Newark have a day of rest every alternate Sunday without deduction of pay. The strict observance of the Sabbath in the railroad traffic, which prevents freight transportation entirely and reduces the passenger service considerably, makes of itself 195 a possibility for Sunday rest as far as the employees en- gaged in outside duty are concerned. It seems to be the rule, at least with Eastern adminis- trations, to allow every year at least ten days vacation to the office employees with full pay. In conclusion it may be mentioned that the Interna- tional Railroad Congress, which met in Washington in the fall of 1905, has been engaged in regulating the service requirements for the railroad employees. The result of the deliberations was as follows : DURATION AND REGULATION OF WORK. It seems to be impossible, on account of the many pe- culiarities of the railroad service, to establish uniform rules which can be applied to the various separate cases. The rules must vary, not only for the various classes of employees, but also for each single class, in accordance with the greater or lesser exertion required by the serv- ice. This presumes that they must offer sufficient scope to be applicable to all cases. In consideration of the preceding, the inflexibility of a law of regulation is incompatible with the elasticity re- quired by the manifold needs of the public, of the em- ployees and of the administration. It is therefore de- sirable that the employer should have the utmost liberty to regulate the time of service under the supervision of the respective authorities, according to the following prin- ciples : I. The importance of the work to be done, the extent and frequency of interruption and the exertion connected therewith are to be considered in order to fix correctly the number of hours of service for each class. 196 2. The number of hours is to be calculated according to an average for a sufficiently long working time; this is divided into service shifts, separated by appropriate times of rest or recesses. 3. The average duration of service is to be adapted to the character of the work and the degree of responsibility connected therewith. DISCIPLINARY MEASURES. It is evident that a special educational disciplinary system is hardly possible, considering the American con- ception of employment. The discharge from service on the one side and the right of resignation by the employee on the other will, if the conditions do not change materially, make things different than with us. We could not obtain general regulations for the en- tire stafif of employees. We quote, therefore, the following extracts from the service rules of the Baltimore and Ohio Railroad and the Oregon Railroad Company for the engine and train crews and the employees of the telegraph serv- ice. It is to be presumed, however, that these regulations are applicable in general to the rest of the employees. Very generally the principle prevails that dismissal from the service precludes any further punishment. It is difficult to discover what penalties, apart from dismissal, are imposed. Only for the licensed firemen of the Balti- more and Ohio Railroad the rule is established that they can be deprived of their certificates in a disciplinary way. It appears that, in general, the adjustment of wages, the official promotion and advancement, which is com- pletely left in the hands of the superior officers, is affected disadvantageous^ by the proof of guilt. While recogniz- 197 ing that thereby the superior officer has an effective means in his hands for maintaining the discipHne, yet it cannot be gainsaid that this method frequently fails in its purpose, in view of the always existing possibility that the party disci- plined finds other employment. In addition and apart from this, the official will often feel inclined to be lenient — at least, in relation to employees organized in unions and brotherhoods — for reasons developed in another chapter. For the disciplinary procedure the following precise rules exist : No officer shall be suspended from service without a disciplinary procedure being at the same time instituted against him. The parties shall be present at the investiga- tion, particularly in the deliberations necessitated thereby ; the examination of witnesses only may be held separately. The investigation shall take place, if possible, within seven days, and the decision announced in due time. Appeals may be made to the general officers. This applies to the locomotive engineers; similar rules are in force for fire- men, conductors, etc. It was not possible for us to collect reliable material as to the extent to which the superior officers actually make use of the power conferred upon them by these rules. In conclusion it may be said that the expressions of the superior officers in leading positions, particularly the district superintendents, concerning the conduct of the traffic personnel, were, for the most part, favorable. A very pronounced sense of honor is said to restrain the employees from excesses and carelessness. Besides, every- body aims at advancement. Drunkenness is rarely met with. When a man is given to the use of alcohol, sharp proceedings are instituted against him; there is a dread 198 of whiskey-drinkers, as they become incapacitated for serv- ice for long periods by indulging immoderately in liquor. OFFICERS' AND EMPLOYEES' UNIONS. It is not, nor can it be, the purpose of these explana- tions to discuss here, from a general point of view, the unions of officers and of employees for safeguarding and protecting their interests; it is our intention only to con- sider their influence upon the American railroads as far as it is possible within the limits prescribed. As, however, the American railroads, in their whole development and according to the nature of existing conditions in general, are dependent on the condition and the further develop- ment of the general labor market in an essentially different manner than is the case with us, a one-sided description of mere railroad conditions would not give an adequate illustration. The question at issue, which more or less influences the economical life of all modern civilized nations, accord- ing to the condition and extent of their commerce or in- dustry, and which partially even dominates it, has taken a direction in the United States following the English ex- ample, which is different from the development of condi- tions in our country. While this question, originally every- where directed toward an improvement of the situation of the economically weaker class of the population, has become with us, and also in other countries, a political one, in so far as these classes seek to obtain their improvement simultaneous with and by the attainment of political power, it has been restricted in America, as also in Eng- land, for the present almost entirely to purely industrial spheres. In other words, the American Socialists, partic- 199 ularly their leaders, have not succeeded, not even in the attempt, to make the working people believe that they are the champions of their economic aspirations. Organizations have been established which, without meddling with political questions, have nothing in common with Socialists as such. The labor movement in America is more industrial and less political. To an observer of the American movement familiar with the development of German conditions, it might ap- pear that America might be envied for this development. But this is not the case by any means ! The industrial progress of the United States has in- deed not been arrested by the terrorism of the unions; enormous progress has been made in the last few years. It is questionable, however, whether this development would not have been incomparably greater if in America, as elsewhere, the economic activity had not been hampered temporarily by the interference of the unions. In considering the railroads and the industrial con- cerns immediately connected with them, we can refer to the Pullman car works in Chicago, which employ 6,000 work- men under normal conditions. Of these there were, when we inspected the works, at most only 600 employed. As we were told in Chicago, the rest of the workmen had been dismissed for lack of sufficient orders. In reality, this step is said to have been taken in order to nip in the bud a threatened strike. The intention was, it was said, to give to the workmen a foretaste of the unavoidable conse- quences of a strike and to spoil their appetite for it. While such a point of view is certainly incompatible with the moral requirements which, with us at least, are asked from an establishment of this character and its managers, this 200 measure appears in a less unfavorable light if we consider the situation in general, and especially in Chicago. In any case, the Pullman administration sized up the situa- tion correctly. This is proved by the fact that the em- ployees in the great Chicago abattoirs (about 10,000 men) actually went on strike for higher wages after Pullman had dismissed his workmen for considering the attempt of ob- taining a raise in wages. This strike ended, it is true, with a complete defeat for the workers. On the very day on which we inspected the abattoirs, thousands applied again for work and, as we were told, Pullman resumed work with a full force soon after. This establishment was, especially compelled — and this must not be overlooked — to act with all possible precaution and prudence, because it was in these works that the strike broke out in the year 1894 which gave the signal for the general strike of rail- road men that crippled subsequently almost the entire rail- road traffic in the United States. In the United States this condition is due, in the first place, to the coalition of workmen of the same class all over the country ; in the second place, however, also to the circumstances that these classes of workingmen include employees in the service of the railroads which, with us, belong to the real officials. This is true principally of the technically trained supervisory personnel in the worshops, round-houses and engine shops which do not belong to the railroad organizations proper but to the general trade unions, from which gradually the strike movement spreads to the affiliated service branches of the railroad, the loco- motive engineers and firemen, finally passing to the train crews also. 201 The Vice-President of the Great Northern Railroad, Mr. L. Hill, in St. Paul, son of the president, described to us, in vivid colors, how this strike developed and finally spread over the whole domain of the United States, and how helpless the railroads stood in the face of the strike, just because it had drawn in also the employees in higher positions at the same time with the workmen. i Unionism has grown to an extent which is unknown even to us Germans. This is outwardly recognizable also. A great number of the men, frequently also of the women, which we met, carried a rosette or a badge, etc., showing that they belong to one or the other association. This con- dition is already discernable in the higher circles, referring in this case, however, at all events in most cases, merely to the social or political life. In the lower spheres it in- creases, however, not only in breadth but also in depth, drawing within its range in these classes, in some sort, the whole life of the individuals — at least, their earning ca- pacity — and putting them under its control. Just as the better situated people form their clubs, so mechanics and the employees of the same class have their brotherhoods. The workingmen in general, however, have their unions (trade or laborers' unions), a designation which includes, it is true, as a collective name, all kinds of associations. We need not speak of the clubs in this connection, although they are of considerable significance in railroad circles. At all events, they pursue rather social, educa- tional and also commercial ends, but they refuse to be regarded in relation to the administration as a fixed caste. Totally different are the brotherhoods comprising in the main the traffic employees in the various branches. 202 There are such for locomotive engineers, locomotive fire- men, conductors, brakemen, etc. Clerks may belong to them just as well, only with the difference that they are, as a rule, members of a general organization, not a rail- road men's union proper, although there are also com- binations of this character. The laborers belong, as a rule, to unions, whether general or railroad unions, with the exception of the track men, who — at least, up to date — have not as yet formed a union of their own. The isolation of the track men from the unions is ascribed to the circumstance that the collection of the dues is attended with too many difficulties. All these associations, be they brotherhoods or unions, take the stand that it is the business of the railroad ad- ministrations to discuss with their representatives all matters concerning their members as a body — as, the fixing of salaries or wages and other compensations, the regulation and determination of working and rest hours, disciplinary and punitive measures, etc., and they demand that the railroads are obliged to fill all positions with per- sons belonging to the unions. The chain formed by all these coalitions has finally enclosed the railroad administrations with an iron grip, to loosen which they find difficult. Thus we find the re- markable fact with the American railroads that, while the higher, and, for that matter, every solitary official, is powerless against the superior administration, which can dismiss him at any time without any proceedings what- soever and without any claim to compensation, the rela- tions of the great majority of the employees and the work- men to the railroad administrations have developed in the 203 opposite direction, the employees of this class having ac- quired the power to enforce their demands. To further develop the reasons why such a state of affairs has come and had to arrive would lead too far, as remarked before. But it may be mentioned here that the tie which binds the members of a union together is of extraordinary strength and permanence, and that it attaches the member to the union, in most cases, even when he has outgrown it by virtue of his office and gen- eral position. Thus we are told that the Mayor of San Francisco, formerly a member of a theatrical orchestra, is a union man. It is evident that when such cases occur frequently — and in the United States rapid advancement is to-day still easier than anywhere else — the unions must profit directly and indirectly. At all events, it is a fact that the rail- road administrations have submitted as a general rule — some more, others less. Only the Pennsylvania Railroad (east and west of Pittsburg) is said, if our information is correct, to have declared in general for the open shop — at least, for the laborers ; that is to say, it declines to dis- cuss the engagement of laborers with the representatives of the unions and reserves for itself full liberty as to whom it shall employ. This would signify a progress, in so far as in the past, probably, all administrations were obliged to nego- tiate with the railroad unions, even when they practically declined to recognize the general unions. However, none of the railroad administrations has so far succeeded in making itself independent from the various brotherhoods; at least, the rules (scales) and rates of pay have been arranged by agreement between 204 the chairmen of the various brotherhoods and the repre- sentatives of the railroad administrations. This is the case of all, and also of the Baltimore and Ohio, which is closely related to the Pennsylvania. It is especially ex- pressed in the rules, etc., and certified to by both parties. How powerful the pressure brought to bear on the rail- road administrations is can be estimated by the conces- sions which have been wrested from them. For no rail- road administration, not even an American, will willingly and voluntarily consent to a general rule like the follow- ing: "Money penalties shall not be imposed. The loco- motive engineer shall not be reported for minor trans- gressions. On account of damage to and destruction of material used in the railway plant no penalties shall be exacted nor damages claimed." The brotherhoods look out for the strict observation of these rules by the administration, and in this direction they display, at all events, a magnificent esprit de corps. Each controversy raises the spectre of a strike. What a strike of this character means when, as is the case, the brotherhood comprises the complete stafif of a single branch of the whole system, the American railroads ex- perienced in the nineties. The coherence of the em- ployees of the various branches united in brotherhoods is maintained by an iron grip. This is no longer dis' cipline; it must be termed oppression. How far this goes, how it exceeds all limits in an absurd way, is ap- parent from a case that was related to us. In a Western town the painters were on a strike. One of the strikers made use of the leisure imposed upon him by painting his 205 own house. The union, however, stopped him, threaten- ing immediate expulsion. The whole extraordinary power of the unions is *based on the fact that, according to the development of things in America, no union man can evade this oppres- sion and that consequently strike breakers are difficult to find. Considering the amalgamation of all kindred and allied trades all over the country, the recruiting of substi- tutes from outside is out of the question; anyhow, the railroad administrations could hardly count on any aid from this direction. A similar state of things exists with the laborers, only that, as far as we know, there are no rules. The situation in this line is essentially simpler, but not more fortunate, for the railroad administrations. The suc- cesses obtained in Chicago are only sporadic and give no hope for a remedy of the cancerous evil. TOTAL NUMBER OF EMPLOYEES. The fourth and eighth chapters contain especially detailed information as regards the distribution of the staff to the posts of duty and offices of the various ad- ministrations. Referring to the explanation given in these chapters, we submit in the following table a sum- mary of the total number of employees engaged on a daily average in the American railroad service during the years 1902-1903, compared with the Prussian-Hessian service. More recent data were not available as late as the fall of 1904. In order to get a standard for an estimate of the required human labor in the various branches of the service, we have separated, as far as possible, the total figures and classified them. At the same time the cal- 206 culation of the proportionate figures is based on the track length and traffic results. For the sake of comparison we have added the relative figures of the Prussian-Hessian State railroads in the year 1902-1903. (See page 208.) According to this summary, the service staiif em- ployed by the railroads of the United States — including 63,000 employees of the express companies, but exclusive of the Pullman employees — all in all, 1,375,537 men — was 3.86 times larger than the number of officials and laborers of the Prussian-Hessian railroad community with 356,- 174 men. On closer examination of the allotment of the staff to the various branches of service we find, first, that the opinion which we have already expressed, that the ntim- ber of officials belonging to the general administration is comparatively large in the American railroads, is con- firmed. It amounts to five times the number of the Prussian-Hessian system, although neither the passenger nor the freight traffic is approximately so much larger, and although the total stafif in all branches is only 3.86 times more numerous that with us. In this respect it is, moreover, to be considered that the subheading, "Other Employees," in the American figures (No. 10 of the sum- mary) includes a not inconsiderable number of employees which in the Prussian-Hessian system are enumerated as administration officials. One will therefore not be mis- taken in the assumption that, taken all in all, our adminis- tration service is less expensive than that of the American railroads. Doubtless many thousand well-salaried hands could still be spared by a systematic regulation, of the busi- ness methods in the offices (compare especially the re- marks concerning the system of control and dispatch in 207 1 a 1 2 w « 2 1 a CO K 1 1 3 Ph SJ3)3U10[1^ OOO'OOO'I J3J ^ 00 ir> (^ Tt H d ■* to" T-I vd d 10 00 9 saajaraoira niEjj 000*000*1 J3J ,_) VO r* to CM CO CM ■* co' (sid-*cHOvt^to d CO VO COCMOVt^CMCO rH rH CM ft t-H VO 00 sjsiaaxoijx 001 J3J •»!; t~. O;0t>.0;ooc>g P.d u> S a » S-o " 8*0 HI u.S J3 ^ 0. >,Sii .D--M •a ojt*.. o<'v 0,11 a B5S "»-i2 1^? ifiS-i ^■4^ £93 ■""ca S§-c A' to'-' "vo-a .a sJ*! 11^ <^i! ti a a ^Et ".S8 ^n& a So £3^ en aS!« Sap, rtZ? bjO. frag In"^ K a-a 1^=3 rt •" '?!■= ■0.2 'S'a 208 the eighth chapter) and by moderating the abuse of typewriting. Comparatively more people are employed with us in the station service, in which class are included in the summary all officials and employees of the train dispatch service, the switchmen, telegraph operators and the local freight and passenger employees. Apparently this is the result of the large passenger traffic. Certainly the num- ber of passengers to be transported is with us nearly as large as in America, although the American network of railroads is 10.3 times larger. Furthermore the incom- parably closer succession of stations requires with us a larger station personnel. The stricter supervision of the service is also a reason for this increase of employment with us; in addition, more personnel is required in the switching service, which is, with us, considerably more extensive owing to the more frequent points of intersec- tion and to the relatively greater car park on account of the smaller carrying capacity of the freight cars. It is a well-known fact that the switch tending and track guarding staff in America is disproportionately smaller in numbers than ours. A regular track guarding system is unknown in America. The number of switch- men and guards would be still less if it were not for the fact that a very large staff of switch operators is employed in the railroad yards of America. The large difference influences the comparison drawn at the foot of the summary to a considerable extent ; because it shows that, taking in consideration the entire personnel the American railroads employ for every 1,000,000 train kilometers, 8,985 men against 10,072 men for the same proportion in the Prussian-Hessian service; whereas, if 209 we eliminate the switchmen and the guards the proportion is 8,659 in America to 8,331 now in Prussia-Hesse. The saving of individual expenses in the United States through less extended track guarding is quite extraordinary. American railroads would be obliged, if they were to guard their tracks and crossings in the same manner as this is prescribed by law for the sake of safety for German railroads, to employ about 636,000 men in- stead of the 49,961 men which at present are actually employed as switch operators and guards; consequently, they would have to increase their staff by not less than about 586,000 men! This figure alone far exceeds the entire staff of employees of 356,174 men of the Prussian- Hessian railroads. The number of employees in the road maintenance service is also considerably smaller in America. If we consider, however, apart from the track length, the greater density of the train traffic on the Prussian-Hessian rail- roads, then this difference (in America, 74.0, and in Prus- sia-Hesse, 105.3 men, per kilometers train length) is not particularly striking. There are also no remarkable differences as regards the engine and train crews. Especially the frequently made assertion, that the American railroads, through an original organization of the service, employ a smaller engine staff, does not appear to hold good; if we further consider that the daily working time of the personnel in America is probably considerably longer than with us, then it does not appear that train operation in America is managed more economical than with us, as far as human labor is concerned. 210 The number of workshop hands is smaller than with us, especially in view of the size of the car parks. It is well known that the American railroads use up locomo- tives very rapidly and do not take care of them as provi- dently as we do. Responsible for this is possibly the opinion, which is also apparent in other industrial fields, that the cost of maintenance had better be saved so as to gain a freer hand for profiting by all the latest improve- ments through a renewal of the old stock. German rail- road men of machine technical ability have frequently investigated whether improved machine tools and a dif- ferently organized division of labor have also exerted their influence in this direction; palpable results have, however, not been attained. It should also be mentioned here that, according to the observations of the financial management, the maintenance and renewal of the operat- ing material absorbs a proportionately larger part of the traffic receipts in America than with us. The heading "Other Employees" includes, in the American statistics, a great number of officials. Appar- ently the very numerous agents and clerks in the city offices of the railroad companies are included therein. 211 SIXTH CHAPTER. Institutions for the General Welfare of the Railroad Employees. Social-political Views in General and Especially as Regards the Railroads. — Sick Funds. — Pension Funds. — Savings and Loan Societies. — Hospitals. — ^Railroad Physicians. — Libraries. — Profit Sharing of the Employees. — Young Men's Christian Association. — Addenda: Lecture Delivered by the Privy Sanitary Councilor, Dr. Schwechten, as Regards the Rail- road Physicians and Railroad Hygiene, at the Berlin Society of Railroad Physicians, April 7, 1905. The principle prevails in general with the American business life that the payment of wages for services ren- dered constitutes the complete settlement between em- ployee and employer. The views of both parties meet in that the employer feels no obligation whatever to do more than necessary, while the employee, for various reasons, shows himself disinclined to accept a compensa- tion for his activity in any other form than the prompt payment of cash. The mutual relations are considered ended with that. This does not mean to signify that in America the economically weaker class does not also feel the necessity to provide for unforseen emergencies. The employee thinks he is able to satisfy this want independently from his employer, either by uniting with his co-workers for this purpose, or by joining one of the existing general institu- tions which are regarded as exemplary in the United 213 States. ( This opinion must, however, be somewhat modi- fied since the revelations of the Equitable Life Assurance Society. It again shows how careful one must be in judging American institutions.) In accordance with the views prevailing in the American business world the employer will, in fact, feel generally a certain satisfaction if the employee insures himself without his co-operation. Only in very isolated cases does the employer support such efforts of his men actively. The railroad administrations certainly belong to the minority which cares for the welfare of the em- ployees. They have become an indispensable institution of transportation for the people as a whole ; this gives the railroad traffic a distinct — so to say, a legalized — public character, and puts the relations of the railroad adminis- trations to their men on a different basis than is otherwise the case between employers and employees. The railroad administrations must, in fact, in the public interest, aim to attach to themselves a reliable staff, and, as far as it is consistent with American views, avoid sweeping changes in their personnel. This policy, in conjunction with the dangers of the railroad employ, must find expression in an increased care of the railroad administrations for their men. To tell the truth, these have not been the only motives which have induced the American railroad administra- tions to act in the way they have done and still do. Human considerations, and sometimes also liberal provisions made by public-spirited persons connected with the railroad serv- ice, as was a matter of course, considering the American generosity, have also been determining factors. It is pleas- ing to note that this endeavor has also met with a more in- 214 telligent reception among the employees than in other trades, although the railroad administrations have not been spared disappointment in the field of taking care of their employees. At the present time these endeavors of the ad- ministrations are made manifest in two ways, in so far as they — 1. Make contributions to general beneficiary institu- tions, or those created for their officials, or for all their employees; or as they 2. Have created themselves and maintain similar in- stitutions. The principle prevails in all cases that no compulsion exists for the employee to join. The social-political idea which makes beneficiary pro- visions compulsory for both parties, the employers as well as the employees, and which of all nations in the world has been realized in the most complete manner in the German Empire, will, in view of prevailing opinions in the United States, not find favor there in the near future. According to investigations made by Mr. Max Rie- benack, controller of the Pennsylvania Railroad, only nine out of more than twenty-four railroad administra- tions, which in the year 1903 had participated in move- ments for insurance purposes for the general public as well as purely in the interest of railroad employees, had a relief fund department under their own administration. (Mr. Riebenack has not only delivered a series of lectures treating the beneficiary institutions of the American rail- roads, but he has also recently published an excellent work entitled, "Railway Provident Institutions in English- speaking Countries." We owe much valuable informa- tion to this gentleman.) 215 RELIEF FUNDS. They include a total road length of 49,951 kilometers, or about 15 per cent, of the entire American railroad sys- tem with 319,577, or about one-quarter of all employees, and a membership of 206,355, ^^ 65 per cent, of the em- ployees, working for the participating railroads. The con- ditions for joining exclude sick and aged persons. The relief departments of all railroads in question paid out in the year 1903 approximately io,(X)0,ooo marks, the total payments since the foundation amounted to 155,- 000,000 marks. To this sum the relief fund of the Penn- sylvania Railroad (east of Pittsburg) alone contributed 56,200,000 marks. Of all the moneys collected for this Pennsylvania relief fund, which was started in 1886, about 48,500,000 marks have been contributed by the members through deductions from salaries and wages, 10,500,000 marks by the administrations and 1,750,000 marks were donations. Of the total expenditure of the Pennsylvania for these purposes, 13.5 per cent., in round figures, go for adminis- tration expenses. These administration expenses may be considered to be borne by the railroad alone, as it pays, besides furnishing free of charge the office accomo- dations, two higher officials, eighty-nine physicians and ninety-six other clerks — all engaged exclusively in this work. Besides this the administration has undertaken to re- fund the deficit in the event that during a three years' busi- ness period the necessary disbursements should not be completely covered by the members' dues. Should a surplus be realized during the same period 216 of every three years, it is stipulated by the by-laws that it shall be used for the assistance of the old age and pension funds which have been created since then. It is not evident from the record how the actual condi- tions have developed in both directions, particularly whether the administration — aside from the year 1903 — has been called upon to make good its guarantee. The cash payments proper have been since the estab- lishment of the Pennsylvania relief fund, as follows : Marks. For old age pensions 600,000 In cases of sickness 17,000,000 For accidents 8,900,000 For deaths from natural causes 14,700,000 For deaths following accidents 5,500,000 The number of members amounted on December 31, 1886, to 19,952, and on December 31, 1903, to 76,507 — about 69 per cent, of all employees of the Pennsylvania Railroad. The direct administration of the fund is con- ferred upon a superintendent under the supervision of the general manager, assisted by a so-called advisory com- mittee. To this committee are elected an equal number of members by the administration and the fund beneficiaries. The fund is accessible to all employees of the Pennsyl- vania Railroad, exclusive of the sick and persons over forty-five years of age, and provides for five classes of dues according to wages, which pay respectively 3.12,^ 6.24, 9.36, 12.48 and 15.60 marks per month. For sick relief there is paid in the lowest class, always beginning on the fourth day after the start of the sickness, i mark 66 pfennigs per day for a period of fifty- 217 two weeks; in case this period of time is exceeded only one-half of the amount is paid. In case of accident for the same period, 2.08 marks, and for the following period until cured, 1.04 marks per day. In case of death there is paid in the several classes: 1,040, 2,080, 3,120, 4,160, and 5,200 marks. This death benefit can be raised by the payment of additional dues to the limit of 10,400 marks in the fifth class. In general it is safe to assume that the sick relief for fifty-two weeks equals the dues of six- teen years and the payment in case of death 'those of twenty-eight years. The fund had accumulated, at the end of 1903, a surplus of 3,120,000 marks in round figures. Notwith- standing this, the company has paid in the year 1903, according to the explained agreement, 200,000 marks in round figures to cover a deficit in contributions, while spending 840,000 marks for administration expenses. The total expenses of the fund amounted for the same year, including the last named amounts, 6,220,000 marks in round figures. Of the relief fund of the Penn- sylvania Railroad (west of Pittsburg), out of a total personnel of 40,545 men at the end of the year 1903, 27,644, or 68 per cent., were members. They have con- tributed, in the calendar year 1903, 2,000,000 marks in round figures. The administration has made a general cash contribution of 47,000 marks (this is a somewhat different organization, the regulations of which are not known in detail), and to cover a deficit, 16,000 marks in round figures. For maintenance and administration ex- penses it grants the fund 317,000 marks, which it charges to its own expenses of the general administration account. As it charges 207,000 marks as grants to this relief fund 218 (in the preceding year with 27,217 members only 158,000 marks in round figures), it may be assumed that of the above-mentioned 317,000 marks, the sum of 110,000 marks may be accounted for by office rents as well as for salaries of clerks employed for this purpose by the company. Consequently, 217,000 marks in round figures have been expended in cash payments, after deducting the administration charges, during the fiscal year. The surplus estimated, after due consideration of the liabilities still pending, amounts to 540,000 marks in round figures. The institution of the Baltimore and Ohio Railroad, having the same purpose, which is seemingly based on a somewhat different plan, shows for the fiscal year 1903-4, a membership of 46,198; that is to say, an in- crease over the preceding year of 4,415. The members have contributed during the fiscal year, 3,100,000 marks in round figures, while the administration has added 220,- 000 marks approximately. For administration expenses the fund has been charged with 300,000 marks in round figures. To what extent the railroad company contrib- utes to these costs is not evident from the report ; it shows only a donation for expenses of 40,000 marks in round figures. The reserve fund — that is, the property of the fund after deducting payments made this year and still due — amounts to 2,850,000 marks in round figures. We cannot state at present to what extent other American railroad administrations have similar benefi- ciary institutions which serve in general the same pur- poses as our operators' sick relief funds. It is possible that, for reasons mentioned at the beginning of this chap- ter, the administrations have not met everywhere with the same appreciation of their endeavors on the part of 219 the employees. Thus we were told, for instance, by a gentleman who stands at the head of the street car system in San Francisco, that the car employees contributed 50 cents per month to a sick relief fund managed by the com- pany, while the administration contributed $30,000 per annum. Notwithstanding this, the employees, incited by the leaders of the union, did not rest content until the fund was dissolved and until it was left to each individual to provide for himself after the assistance of the admin- istration had been abolished. PENSION FUNDS. The Baltimore and Ohio Railroad was the first to institute a pension fund. It started it at first as a sub- department of the relief fund on October i, 1884. The preliminary condition of membership was a four year's membership of the relief fund. Up to July I, 1900, the amount appropriated annually for the purposes of this fund by the administration was 129,000 marks in round figures ; to this was added a contribution of 25,000 marks in round figures by the relief department. On July i, 1900, the administration increased its appropriation to 312,000 marks. About this time, properly speaking, other administrations began systematic donations for such a fund. Its object, to provide against the injurious con- sequences of a compulsory or at least involuntary retire- ment from service at the age of sixty-five years (with others, seventy years), and of a retirement due to dis- ability between the ages of sixty-one and sixty-nine after a time of service of from ten to thirty years, according to the by-laws, is attained in various ways by the several railroad administrations. 220 The pension itself is fixed by the rule that the pen- sioner receives for each service year i per cent, of the salary which he has received in the ten years preceding his retirement. (For example, an employee has forty years of service. His average salary for the last ten years amounted to 300 marks per month ; his pension is, accordingly, 40 per cent, of 300 marks; that is, 120 marks per month.) At the present time eighteen railroad administrations have pension funds; a number of others, among which are the so-called Vanderbilt roads, are about creating them. The eighteen administrations have a track length of 80,450 kilometers, or about 24 per cent, of the total number of kilometers, with about 500,000 employees — 38 per cent, of all the persons employed by all railroads. A legal right to claim the payment of a pension seems to have been nowhere conceded. The Oregon Railway reserves the right, expressed at the end of its pension fund by-laws, to dismiss any employee without pension, and lays stress upon its first principle, that no employee has any claim on the company other than for payment of his earned but unpaid salary. Some railroads actually accumulate pension funds and credit them with interest accruing from investments. Others again — for example, the entire Harriman system — carry this fund only on paper in their books without actually investing it, while still others undertake the guar- antee of the yearly payment of pensions without further obligation. The employees make no contributions. The railroad administrations also bear the costs of adminis- tration. 221 SAVINGS AND LOAN FUNDS. The two Pennsylvania companies, as well as the Baltimore and Ohio road, have a savings and loan fund. This institution does not appear to have met with great favor on the part of the American railroad employees, as may be judged from its limitation to these railroads. HOSPITAL TREATMENT. The treatment of the sick is provided for either in hospitals owned by the railroad administrations, or in State, communal, or private hospitals, with whom con- tracts have been made. Thirty-five railroad administra- tions have such hospital institutions, which benefit more than 360,000 employees. The number of cases treated in this way amounts to about 275,000 annually. Provision is also made for first aid to the injured. RAILROAD PHYSICIANS. (By kind permission of Privy Sanitary Councilor Dr. Schwechten, the lecture delivered by him on April 7, 1905, relative to "Railroad Physicians and Railroad Hy- giene in North America," is reprinted as an addenda at the end of this chapter.) Just as entire classes of railroad employees proper (compare third chapter), so the railroad physicians have also united in so-called associations of surgeons, one of these being the International Association of Railway Surgeons. It was founded in 1888, and has at present a membership of 670. The other is the American Academy of Railway Surgeons, with a membership of 141. It was founded in the year 1894. Both have accomplished great results. 222 Their aim is to develop and improve the railway medical science, and to achieve this by study and experi- ments in the domains of clinics and sanitation, as well as of medical jurisprudence. In a general way the relations of the American physicians to the railroad administrations correspond with those customary with us, except that in America so- called chief surgeons are appointed for larger divisions, and are, so to say, elevated above the rank of their pro- fessional colleagues. Under them serve, for instance, with the Union Pacific Railway, consulting surgeons and assistant surgeons. Instead of the chief surgeon, smaller divisions have only a division surgeon, who is then the superior of the consulting and assistant surgeons. As specialists there are, frequently in one person, oculists and aurists. The Southern Pacific Railway has a special hos- pital department with a chief surgeon as manager. In this case we meet with an official institution which we have not found in other railways; notwithstanding this, it may also exist with other railroad administra- tions. According to the published regulations of the hos- pital department and the roster of surgeons, the chief surgeon exercises all the functions of a manager in the sphere of the administration and is subordinated to the general manager, like the rest of the managers. Each employee (officials and laborers), with the exception of the Chinese, is taxed for the hospital fund with a contribution of 50 cents per month, which is de- ducted from his salary. The obligation to contribute ceases for the time during which the aid of the fund is required. 223 This aid consists mainly of the following : Free nurs- ing and treatment in the hospital; visits by physicians and surgeons outside the hospital; bandaging by phy- sicians and surgeons, etc.; furnishing of artificial limbs and other remedies; reduction of charges for hospital treatment of members of the family. The aid of the fund is not tendered in case of sexual diseases, nor in cases where the employees have been guilty of intemperance, of brawls, or of other transgres- sions, and finally where sickness results from chronic diseases with which the employees were afflicted before entering the service. The hospital treatment is denied also to all cases of contagious diseases, like smallpox, yellow fever, etc. An abuse of the aid of the fund, as well as a flagrant or continued infraction of the rules, is punished by ex- pulsion. The railway physicians are obliged, at the expense of the railroad company, to proffer their assistance also to injured passengers, as well as to such persons who have been injured through unauthorized crossing of the tracks, etc. HOSPITALS, ETC. There are also to be mentioned in this connection the institutions of a purely charitable character, whether they benefit only railroad employees and their next of kin, like the J. Edgar Thomson Girls' Orphan Home (Thomson was formerly President of the Pennsylvania Railroad), or whether they are also of benefit to other classes, as, for instance, the Andrew Carnegie Relief Fund and the Moses Taylor Hospital, which were founded for the employees 224 of the Carnegie company, in all the branches of its system (mines, railroads, etc.), as well as those of the Delaware, Lackawanna and Western Railroad Company and the Lackawanna Iron and Steel Company. LIBRARIES, ETC. Not to be omitted are the libraries and reading-rooms of a whole line of railroad administrations (more than fifty), which include altogether 160,000 kilometers, with nearly 800,000 employees. It is said that 250,000 vol- umes are at the disposal of the employees of these rail- roads. The library of the Baltimore and Ohio Railroad num- bers 15,000 volumes; the one of the central workshops of the Pennsylvania Railroad, 35,000 volumes. PROFIT SHARING OF THE EMPLOYEES. The railroad administrations in the United States give a share in the profits to their employees (the Great Northern Railroad, with 29,761 employees, and the Illinois Central Railroad, with 34,249 employees), and this is done by giving an opportunity to the employees to invest their savings by the acquisition of shares of the company under particularly favorable conditions. This co-operative cap- ital stock purchasing scheme has been in operation with the Great Northern Railroad since June, 1900, and with the Illinois Central Railroad since May, 1893. In this way the Great Northern Railroad has put at the disposal of its employees 10,000 shares of $100 each; that is, a total value of $1,000,000. The investment pay- ments are received by the Great Northern Employees' In- vestment Company, to whom shares have been transferred 225 to that amount by the railroad company from its capital stock. Only such employees can participate in this favor who have been three years in the service and whose salary does not exceed $3,000. Laborers are excluded. The total amount of these investments is limited to $5,000, and for the payment of $10 and upward certificates are handed to the employees. The shares themselves are retained by the investment company for the purpose of effecting the drawing from the railroad company of the dividend, which in turn is paid to the owner of the certificate. These certificates are not transferable; they are registered in the name of the owner, with his place of residence, their number and the amount of capital. They are redeemed on presentation by the administration in St. Paul or by remittance by check. The investing em- ployees receive as the profit share of their certificates the same dividend which the railroad company pays to its shareholders ; the profits are distributed quarterly. When the investment is made between dividend periods, interest is credited on the capital amount at 6 per cent, up to the next term ; in case of withdrawal of the investment before the dividend is due interest is granted from the time of the last dividend. The withdrawal is allowed at any time, and is followed by refunding the capital with accrued divi- dends and interests. The owner of a certificate does not have to bear the cost or expenses which the administration of the shares causes the investment company. On the other hand, this company can request, without further notice, the return of the certificate if the instalment payment is overdue. If the stipulated fifteen days' grace elapses without pay- ment having been made, then the amount paid up naturally 226 is not forfeited, but profit sharing ceases. In case a certifi- cate is lost and the loss is sufficiently proved, then that amount is refunded, which is ascertained from the ac- counts up to the day of the loss. The investment company gives assurance in its statutes of loyal performance of duty ; a sale or transfer of shares held by it in trust is not to be effected. The acquisition of shares by employees of the Illinois Central Railroad takes place by payments in instalments, which have to be made in amounts of $5 or a multiple thereof. If for a period of twelve months no payment is made the interest, which is 4 per cent, for shares not fully paid up, ceases. The purchase price of the share is made known by the company on the ist of each month and re- mains the same for the whole month. After full payment of the amount the officers and the employees receive a certificate, which is entered on the books of the company. The profit-sharing plan grants, at the same time, the right to participate in the election of the board of directors. Simultaneous acquisition of more than one share is not permitted; on the other hand, the employee is at liberty to buy several shares in this manner successively. The payments in instalments are in so far facilitated as on demand by employees a stipulated amount can be retained from their salary, which is credited then toward the acquisition of the share. A demand for the return of the investment capital is allowed at all times. On quitting the service the amount either is refunded with the accrued profits to the purchaser, or he keeps the right of further participation, provided he has fully paid up the face value of his share. The Illinois Central Railroad also gives assurance of 227 loyalty and complete exemption from charges to all those who avail themselves of this institution. It anticipates from profit sharing a more intimate fellowship between the employees, encouragement of thrift, and the stimula- tion of greater interest in the service. The total number of employees for both railroad com- panies amounts to 64,010. Of these payments have been contributed to the amount of $1,288,022.29, which are divided into $710,000 for the Great Northern Railroad and $578,022.29 for the Illinois Central Railroad. By way of information, it may be mentioned that, of other industrial companies, particularly the Steel Trust of the United States has, since January i, 1903, admitted its employees and workmen to a profit sharing in this way: that it has placed at their disposal 25,000 7 per cent, pre- ferred shares of the company at a reduced price. It is said that later on this number of shares has been increased. Besides the fixed interest of 7 per cent, the owner also re- ceives a special dividend bonus as long as he works un- interruptedly for the company. In addition to this, a fund was to be provided for the profit-sharing of the higher officials who had served at least five years in the company. This fund was to be based on the yearly profits. How this arrangement has since further developed we were unable to ascertain ; nor will it be possible to form an opinion just yet if the principal purpose of the scheme, to attach the employees to the enterprise and to prevent strikes, will be attained. (Compare Sombart, "Studies Relating to the Development of the Proletariat of North America," in the archive for social science and social politics. Tiibingen, 1905. page 556.) 228 YOUNG MEN'S CHRISTIAN ASSOCIATION. Finally the efforts and the results of the railroad men's department of the Young Men's Christian Associa- tion must not be passed by. The Young Men's Christian Associations are spread over the whole of America. (Compare Frank, essay in the trade paper of the United German Railroad Adminis- trations, 1903, No. 74.) Their aim is directed to create a social centre for the recreation of their members, where they find at the same time an opportunity for edification and instruction. Wherever possible, the club is so ar- ranged that it offers to its members good and cheap meals and, to a limited number, also temporary shelter. Clubs of this character, especially intended for railroad em- ployees, have associated themselves with others of more general purposes. These railroad clubs of the Young Men's Christian Association regard it as one of their main objects to nurse and maintain a spirit of pleasant fellow- ship among the employees themselves and of good relations to the railroad companies. At the New York club branch this aim finds its expression in the fact that in the commit- tee of management of the association the railroad admin- istrations are represented not only by members of the board of directors, but also by other higher officials of the several branches of the service. Remarkable and signifi- cant for the confidence placed in the association on the part of the administrations are several utterances of the highest officials of the Pennsylvania Railroad, which have become public. For instance, the late President, George B. Roberts, stated at the occasion of the laying of the foundation-stone of the association building in Philadel- phia: 229 "When we seek men for positions of great responsi- bility we look, in the first place, to those who stand on the ground of the aims of this organization." The association is also endeavoring not only to be of benefit to the members themselves, but also to let their families participate in all advantages; thus the members receive for all entertainments, lectures, etc., besides their own, two or more tickets for members of their families. In all, there are, in the United States and British America, 151 railroad men's associations of the Y. M. C. A. Their total expenses for purposes of the association amount to approximately 2,000,000 marks, of which, as a matter of fact, the railroad administrations bear the major part. Their membership amounts to 55,000; the yearly contribu- tion is fixed at a minimum rate of $3 per annum. Actu- ally the dues fluctuate between $3 and $5. Of these, thirty-one separate associations belonged, in the year 1903, to the two Pennsylvania systems, with 12,732 members, for the support of which these two rail- road companies have spent yearly about 250,000 marks. Some of these branch associations have club buildings of their own ; the greater part, however, is housed in build- ings of the railroad administrations. The first club build- ing was constructed by the branch association in West Philadelphia, at a cost of more than 500,000 marks, of which sum, however, the interested 6,000 members have raised only a part; the administration has contributed a very considerable sum. New York City has five separate association organ- izations : r. The main building, in Madison Avenue, is in- tended for the employees of all railroad companies; it is 230 frequented daily by 800 employees, which may be ac- counted for by its being located immediately near the Grand Central Depot, where alone 1,553 members of the branch association are employed. The total membership in New York is 2,186, The ground has been donated free of cost by the railroad administrations; the building is a Vanderbilt gift. 2. West Seventy-second Street. This building is a donation of the New York Central Railroad, and is mostly frequented by the employees in the freight service. At this station there are 355 active members. 3. At Mott Haven Station 157 members are work- ing. Four railroad coaches serve there the purposes up to the present time, one of which is fixed up as a reading- room, the other as a sleeping apartment, the third as a dining-room, and the fourth as a chapel. 4. Weehawken, New Jersey. There reading, wash, bath, and dressing rooms have been provided in the com- mon station of the West Shore and the New York, On- tario and Western railroads. 5. New Durham, N. Y. The building is used in the main by the locomotive crews. One hundred and twenty-one members use the two last-mentioned clubs. In conclusion we mention here that, according to Mr. Riebenack, the two Pennsylvania railroad companies have expended, in the year 1903, in furtherance of the welfare of their employees, the sum of 3,800,000 marks in round figures (inclusive of the administration expenses), of which the share of the Pennsylvania (east of Pittsburg), as the larger of the two, amounted to about three-quarters. It is evident from these explanations that the Ameri- 231 can railroad administrations are as yet far behind a com- prehensive care for their personnel. This becomes espe- cially clear if we consider how great the expenditures are which the German railroads devote to pensions, provisions for widows and orphans, allowances for charity, assist- ance in various ways, medical treatment, compensation for accidents, contributions to the employees' pension and sick-relief funds and for housing purposes. Compared with them the expenditures, even of the most progressive of all, the Pennsylvania companies, seem trifling; and it must be considered that the accomplishments in this direc- tion of this administration may be caused by the conviction that it in this way creates a powerful lever against the unions. If it were to proceed further on this line — which would demand a sacrifice of more money — a still firmer and more emphatic stand against the terrorism of the unions might possibly be taken. ADDENDA. Railroad Physicians and Railroad Hygiene in North America. [Lecture delivered at the Society of Railroad Physi- cians of Berlin by Privy Sanitary Councilor Dr. Schwech- ten, on April 7, 1905.] Gentlemen : I am indebted for the material of my discourse of to-day to the great amiability of the Privy Councilor Hoiif and Privy Councilor Schwabach, who, dur- ing a sojourn of several months, have investigated the rail- road systems of North America; I am in honor bound to express in this place my high gratitude to both these gentle- men. Of printed matter I had on hand the "Regulations 232 of the Hospital Department and Roster of Surgeons of the Southern Pacific Company," and the "List of Officers, Agents and Stations of the Union Pacific Railroad Com- pany," both documents of the year of 1904. Both com- panies are under a common president. These railroads have a Department of Health; the Southern Department has six; the Union, four divisions. The entire sanitary affairs, as well as all that concerns railroad hygiene, are subordinated in this administration, and in that of many other North American railroad sys- tems, to a manager and chief surgeon, or, as we express it, to a chief physician in the position of a director ; he has in all questions concerning his department complete and independent authority, from which there is only one appeal — that is, to the general manager (the director-general of the whole enterprise), whose decision is final. All written documents go directly to the chief surgeon; his position approaches in Europe that of the chief surgeons of the Hungarian State railway, and possibly also of the Servian railways, while the chief surgeons in the Prussian, Ba- varian and French railway service have nothing like so sweeping an authority. The chief surgeon is an official with a fixed salary, and is not allowed to, nor can he prac- tice, outside of his office. To this chief surgeon are subordinated three other classes of surgeons: \ I, The division surgeons. They have the general supervision over the duties of their departments in the divisions assigned to them and attend at the same time to the medical necessities in the district under their immediate supervision. They correspond approximately to our con- fidential surgeons in the directorial district, as a division 233 corresponds approximately to our directorial district. They also are permanently employed officials, with full salary, who have no chance to practice outside of their official duties. 2. The same holds good for the district surgeons, who attend to the medical service in the railroad districts assigned to them. They also are not permitted to practice outside. They correspond, apart from their exclusive re- striction to the activity assigned to them, completely to our railway surgeons. They administer medical and surgical aid at their residence, as well as at the home of the patients within their district. 3. The emergency surgeons form a third class of physicians. They may be called upon for transient serv- ices when there is danger in delay and the respective dis- trict surgeon cannot be found immediately for one reason or another. To this class belong also the oculists and aur- ists. If further treatment is necessary, the district sur- geon must be notified without loss of time. If he cannot take charge of the case right away, then further instructions have to be called for by telegraph from the superior offi- cial, whose duty it is to provide medical assistance. Bills for medical or surgical assistance by the assistant surgeons are paid only for one single service, according to a stipu- lated scale. The rates, for instance, are : For a consulta- tion during office hours, $2; for a call, $2.50; for a night call, $3.50; for a consultation with another physician, $5. Only in the latter case mileage is allowed at the rate of 35 cents for a trip by rail, and 75 cents for a call that cannot be reached by rail. A special rate exists for surgi- cal operations, which I omit here in detail. I mention only that the highest valuation is put on the amputation of the 234 thigh at the hip joint, for which the fee is fixed at $125, and that a higher charge than this is never to be permitted. It is expressly stated also in the administration ordinance that only in absolute emergency cases shall the assistant surgeons perform operations without consulting the dis- trict or division surgeon, nor are they permitted to remove sick or injured persons to hospitals without permission of the district surgeon. It is the duty of the chief official to whose department the providing of medicinal aid belongs, to see to it that these rules are known and perfectly famil- iar to the assistant surgeons. A direction for medical treatment of a specified form (we would call it a sick- ness certificate) must be presented on request to the surgeon at the first treatment, and must be renewed every month, except when the patient is in the hospital. Such a blank must also be filled out within a month in case of a relapse. If complications set in, or in urgent cases, tele- graphic instructions may be given instead. If the pre- scribed blank has not been sent to the surgeon at the first call for medical aid, it must be done as soon as possible. Authorized to issue these blanks for the assistant surgeons are only the chiefs of the departments, the "superintend- ents," which correspond about to our traffic inspectors, the respective first engineer, master mechanic, conductor, switch foreman and track master. In urgent cases only an exception of this rule is permitted and a higher official of another branch may call for the assistant surgeon; but in that case he must immediately inform the respective superior officer and must make use of a specified different form of certificate for the surgeon. Any official, however, can issue for his subordinates orders for treatment to the division and district surgeons, but they can be directed 235 only to the respective district surgeon. In case this respec- tive district surgeon is prevented from attending, then any other district surgeon residing in the locaHty is obliged to give first aid until the respective district surgeon is at leisure. Transfers to hospitals can only be sanctioned by di- vision and district surgeons. Consultations of other surgeons employed in the ser- vice with the surgeon in charge of the case are permitted in uncertain or protracted cases. The rules state that the patient may request such consultations from his district surgeon, who will willingly arrange for them as often as they may be required. In case of change of residence of the patient the dis- trict surgeon is empowered to make the transfer; a new sick-certificate by the superior official is not required for this purpose. The division and district surgeons, as well as the administration, must be immediately informed by tele- graph in case of larger disasters and numerous injuries, giving as accurately as possible the number of the injured and the character of the injuries. This corresponds exactly to our alarm ordinance. The district and division surgeons are obliged to hurry at once to the scene of dis- aster. If, then, the number of physicians should be found insufficient, the assistant surgeon and every obtainable surgeon are to be called. It is expected of the division surgeons that they commence treatment immediately upon their arrival and render aid to all the sick and injured for whom the company is responsible ; it is also the duty of the division surgeons to give notice to all surgeons already present that the company will not be liable for further 236 services, except such as are requested by the division sur- geons. The following arrangements and instructions exist for the transportation of the sick and injured : Stretchers with complete outfit are on hand at large stations, emerg- ency bandages and all sorts of first aid material are found in appropriate places. All possible speed is to be observed in the transfer to hospitals. The district surgeons have to provide convoys or act themselves. If ambulances are necessary, they are to be requested by telegraph from the hospital, giving at the same time information about all necessary details. I will mention here that the companies have partly hospitals of their own, partly they have made arrangements with hospitals which enable them to secure admission for employees and injured at all times. The administration can accommodate at these hospitals all its sick and employees who require special medical treatment or particular nourishment, or those who cannot obtain suf- ficient nursing at their homes; board and nursing outside the hospital are not granted. The company has a general hospital of its own in San Francisco, and six division hos- pitals and eight emergency hospitals partly under construc- tion. Those in need of hospital treatment are, if possible, to be sent to the general hospital; if this is not feasible, to the nearest district hospitals, from which they can be transferred later, as soon as practicable, to the general hospital. The discharge from the hospital takes place on the decision of the hospital surgeon ; if patients desire to remain any longer in the hospital, against the requisition of the hospital surgeon, a report has to be made to the local department, giving all the details, as well as to the central department. 237 District and division surgeons have blanks for report- ing. If assistant surgeons are serving, they receive a special blank from the acting official, which they have to send, duly filled out, and attached to their bills, to the highest office. The following rules are in force concerning the ap- pointment of new employees : All applicants for a position in the train and station service have to submit to a physical examination, and all who are not found thoroughly sound must be rejected, just as with us. I fail, however, to find distinct regulations concerning qualifications. In case of doubt about the qualifications, the applicants must be sent to the next con- fidential or railroad surgeon. Untrained railroad men must not be over thirty-five, trained ones not over forty- five, years of age; however, superior officers can engage men for a period of six months without regard to age. This engagement may be extended till they have finished the job allotted to them by special engagement, and furthermore men can be engaged without considering the age limit for special professional and practical skill. The district and division surgeons have to pay attention to all hygienic conditions within their districts, and have to re- port on everything that may endanger the health of pas- sengers and employees. Every high or subordinate employee, with the excep- tion of the Chinese, has for a monthly contribution of 50 cents, or when employed less than seven days, of 25 cents, the right to : 1. Free treatment in the hospital. 2. Medical or surgical treatment from the respect- ive surgeons in the employ of the company. 238 3- Free medicines and bandages. 4. Artificial limbs and instruction in their use. 5. Advances to meet the charges made by the rail- road hospitals or those which are under contract with the company for the treatment of members of his family. Medicine and bandages are kept in stock, and are de- livered by the respective hospitals and the offices of the dis- trict and division surgeons. Bills for drvigs and medicines by the assistant surgeons are admissible, within moderate limits. On request, bandages are furnished by the depart- ment to the district surgeons; more bandages can be ob- tained from the employed druggists. The druggists are not allowed to furnish medicines without written prescrip- tion and must send in all bills in duplicate. Artificial limbs and eyes are furnished to all em- ployees during their connection with the organization on the order of the respective surgeon ; they are, however, not renewed. Crutches, trusses, suspensories, inhalation ap- paratus, and elastic bandages are furnished to the surgeons as far as required. For such instruments loaned tempo- rarily to patients receipts must be given on special blanks.. No eye-glasses are furnished. Members of the families of employees find reception in the hospital, in so far as room permits after giving preference to the employees entitled thereto. All employees have a right to these benefits with the exception of — I. Sufferers from sexual diseases, drunkards, men with vicious habits, injuries resulting from brawls or from unlawful transgressions, or chronic diseases existing before entering the service of the road. According to our conceptions, the following rules seem strange: 239 . r 2. Excluded are the sufferers from smallpox, yellow fever, bubonic plague, or other contagious diseases which are subject to quarantine; excluded from hospital treat- ment are, furthermore, diphtheria, measles, scarlet fever, mumps, although in the latter cases home treatment and medicine is granted ; the same holds good for consumptives. Lunatics have no claim on the administration; vaccinatior^ is given free. You can see, gentlemen, that free America grants far less than our Prussian State railroad administration in regard to sexual and contagious diseases, including tuber- culosis, as well as to lunatics, and that treatment in hos- pitals is limited in America to one year, and to two years at the home. Abuse or persistent offenses against the rules cause exclusion from the benefits. The occurrence of sickness after failure to pay dues or after quitting the service pre- cludes the benefits on the part of the company; however, a timely appeal to the chief surgeon — that is to say, on the day after quitting the service — can procure the continua- tion of the benefits of the company until the time of recov- ery. Employees lose their claim to the benefits granted by the company when they have been dismissed or cured, or when they have been excluded for the reasons just stated. Injured travelers, who received the injury on the lines of the company, are accorded free medical treatment until decided otherwise. Injured pedestrians are to be transported to their friends, or to the city or county hospitals ; until then it is the duty of the department surgeon to attend to their treatment. It is necessary to observe that in America barriers, cross-bars, etc., are almost unknown. All medi- 240 cal treatment which is given to others than employees is separately compensated for by the company ; such patients, however, shall be sent to a hospital at the cost of the com- pany only on the order of the superintendent or the general manager. The pension regulations of the Southern Pacific Com- pany require that all superior and minor employees are to be retired from service at the age of seventy years. Loco- motive engineers and firemen, conductors and guards, brakemen, baggage men, freight shed supervisors, switch operators, bridge tenders, supervisors and road masters can be relieved from service at the age of sixty-five years ; they are entitled to a pension after twenty years of service. Employees of from sixty-one to seventy years of age can receive pensions after twenty years of service. Superior and minor employees of between sixty and seventy years of age, who feel themselves unfit for service, or are so in the opinion of their chiefs, may make application for relief from service; the decision belongs to the board of pen- sions. Medical examination is required of persons who apply for pensions when they are under seventy years of age; a report thereon must be endorsed by the chief sur- geon and is also subject to the decision of the board of pensions. The pension dates from the first of the month in which the statutory age is attained, or from the first of a month determined upon by the board of pensions. Gentlemen, I have endeavored to give you, in a short and compact way, an idea of the conditions existing in the railroad medical service of two of the largest railroads of North America, which, supplementing each other, cross the continent from the Atlantic to the Pacific Ocean, and which do not represent an institution governed by the 241 State, but are managed by large private companies. I was enabled to present to you also a partial description of the railroad hygiene as practiced over there, apart from the medical and surgical matters — to wit, the conditions for the engagement, the supervision and the pensioning of the employees, the aid in accident cases and the grant of special benefits in cases of the sickness of employees. You can see from this that in free America it is also considered necessary for the safety of the traffic to have on hand a closely organized corps of surgeons who receive their in- structions solely from the administration. Even on the other side of the ocean the administrations can and will not separate the engagement, the examination and the pen- sion systems from the administration. Even in free America a limit is put by the free American to the free- dom in the selection of physicians through the tracks which unite the oceans, the same as is the case with us and with our neighboring countries. Many things in the rules may appear strange to you ; however, it does not seem becoming, in my opinion, for us to criticize, where the motives for the several measures are not perfectly clear to us. 34a SEVENTH CHAPTER. Passenger and Baggage Traffic. Fares for Passengers. — Scalpers. — Details of the Passenger Traffic. — ^Tickets. — Time-Tables. — Tours in Booklets. — Sale of Tickets. — Ticket Control. — Accounts and Accounting. — Handling of the Baggage. PASSENGER FARES. We have not been able to find a fixed standard for passenger fares in North America, as is customary with us, for the various classes of cars. Mr. E. R. Johnson, Assistant Professor of Transportation and Commerce of Pennsylvania, says in his book, "American Railway Trans- portation" (New York, 1903), in which the difficulty of a comparison of railroad fares in the various countries is set forth, that the passenger fares in the United States range from about i cent for the English passenger mile to 4 and 5 cents in the sparsely settled and mountainous regions. American statistics of railroads give the average price for a passenger mile on all railroads of the United States for the year (June, 1900, to June, 1901) as 2.013 cents; 1901-1902, as 1.986 cents, and 1902-1903, as 2.006 cents. We have compiled from the "Traveler's Railway Guide" for November, 1904, the following rates for a number of shorter and longer trips, and have added the distances in kilometers and stated the proportionate rate for one kilometer in German value: 243 From To Distance Rate Fur I kilo- Kilometers Marks meter in Pfennies New York . . . Philadelphia . . 147 10.50 7.1 ti Washington . 365 27.30 7.5 Chicago . St. Louis . . 471 31.50 67 St. Louis . Kansas City . 557 31.50 5.7 New York Buffalo . . 662 33.60—38.90 55 Chicago . St. Paul . . 693 48.30 6.9 New York Pittsburg 705 44.10 6.3 Chicago . Minneapolis 711 48.30 6.8 *i Pittsburg . . 753 44.10—50.40 6.3 (( Kansas City . 787 52.50 6.7 11 Omaha . , 803 53.60 6.7 St. Louis . St. Paul . . 955 67.20 7.0 New York Chicago . . . 1468—1681 75.60—84.00 5.1 St. Louis . Denver . . 1632 102.90 6.3 Chicago . K 1675 123.90 7.4 New York St. Louis . . 1710 89.30-101.90 5.6 Chicago . San Francisco . 3757 262.50 7.0 New York 11 5225 330.80 6.3 The rates given in this table relate, of course, to the first class; they amount from 5.1 up to 7.5 pfennigs per kilometer. What rates are charged for the rarely used second class and what reductions are made for certain round and other trips — regularly reduced return tickets do not exist in America — was impossible to ascertain. Nor could we ascertain if the figures given us include the com- missions for agents or other dealers. The average earn- ings from the passenger traffic on the American railroads consequent upon the higher fares are in all instances very much higher than with us; they amounted in the year 1902-1903, for a passenger kilometer for all the railroads of the United States, to 5.186 pfennigs as against 2.52 pfennigs in the year 1902, and 2.51 pfennigs in the year 1903 for the State railroads of the Prussian-Hessian Un- ion; therefore, the German rate is about one-half of the American. In comparing these earnings it must, of course, be taken into consideration that the average rate for the low- 244 er car classes in Germany is considerably below the given total average, while the poorer classes of the population of the United States do not enjoy the benefit of such a reduc- tion of the fares. With all that, the ordinary American passenger car, as remarked previously, is not better than our third-class car, especially for longer trips. At all events, it causes no more expense to the railroad adminis- tration; it is rather constructed for the greatest possible exploitation. In comparing the American average rates with ours, it is further to be considered that in the United States an incomparably larger number of travelers use the Pull- man cars, consequently paying extra fares, than it is the custom with us to use the sleeping-cars and the cars of ex- press trains. If the receipts from the extra fares paid by these travelers were also considered, then the diflference between the average rates on the American and the Ger- man railroads would undoubtedly be considerably more marked. These receipts, however, are not sufficiently known. A compilation of some of the rates for additional fares charged for the use of Pullman cars is contained in the ninth chapter. TICKET BROKERAGE. While a detailed description of the official railroad sale of tickets is given in another part, a few words may be said here as regards the ticket trade, which is carried on in the United States as a business by private parties whose shops are found in great numbers in streets leading to the depots. This ticket brokerage business is, in the United States, of almost as great importance as it is a fea- ture of rather unpleasant aspect. It furnishes a living to 245 numerous persons in a form and manner which is at vari- ance with our ideas of decency and which ofifends our con- ception of justice. It makes itself noticeable, furthermore, in a disagreeable manner at the large traffic centres, the important transit stations and the railroad junctions, where it monopolizes with offensive advertisements whole blocks of buildings. But not even the smallest stations in the far- thest West is without its ticket broker, who — at least, as a side line — carries on a private business in tickets. The origin of this traffic, characteristic for American railroad conditions, is to be explained by the disinclination of the American to buy his ticket, especially for long trips, im- mediately before his departure at the ticket office in the sta- tion. While, on the one hand, the railroad administra- tions did respond to this prejudice by establishing local ticket offices wherever success was to be expected, the pos- sibility, on the other hand, to procure cheaper tickets, by profiting from the difference in the rates of the tickets for through and for interrupted travel, caused, as a matter of course in accord with American ideas, the desire to exploit this situation in a business way. Whether this business would ever have reached the development it did in the eighties and nineties of the past century if the railroad administrations had not counte- nanced it is, at all events, very doubtful. In this field, as in the freight traffic, the fiercest competition influenced, in a by no means favorable manner, the economic life in the United States — an influence which probably has not ceased entirely up to this day, although it is less apparent at pres- ent. If formerly the fierce rate wars recurring periodic- ally with deadly certainty, gave occasion to even the larg- est administrations to underbid competitors by the whole- 246 sale squandering of tickets at ridiculous prices, thereby excluding them more or less from the traffic, the large ad- ministrations seek to effect this at the present day by the manner in which they handle the traffic. The small and less efficient railroad administrations believe, now as be- fore, that they are able to save their existence only by tempting the ticket dealers with exorbitant commissions to give preference to their lines. Possibly they also act on the supposition that those classes of the public which de- sire to travel under all circumstances at a reduced rate would anyway find an opportunity, someway or another, to do so. Here begins that end of the ticket traffic which must be termed unprincipled if not fraudulent — to wit, the purchase and sale of such tickets and parts of tickets which can be used only by deceiving the railroad administration, like 1,000-mile and return tickets, and all tickets issued at reduced rates, etc., on the name of a certain party. Whether the swindle which is the basis of the scalp- er's business is limited to this is difficult to say. Profes- sionals to whom we spoke about it, told us that there were dealers who not only never sell under the actual price, but who aim, on the contrary, to charge even higher prices wherever they think they have a chance to succeed. Even in this direction the railroad administrations are not free from blame, because they do not print the price on the tickets, as is customary with us and elsewhere. It is hard to say whether this omission to print the price is due solely to the frequent changes in the rates. It may not at all be the intention of the railroad administrations to leave the traveler in uncertainty as to the actual price, but it is asking too much from the traveling public when it is compelled to inform itself as to fares from the rate tariff. 247 The price of fares is rarely found in the guide-books; as a rule, it is given only for the principal traffic points. In the remaining cases the public may figure out, though, the price of fare by multiplication of the unit rate published from time to time, or as stated in the guide-book; to our idea, however, it is unfair to ask that much. It is not safe, however, to assume our point of view in judging American affairs ; at least, we have observed no particular dissatisfaction with this procedure among the people. We deem it safe to assume that now, after Ameri- can railroad conditions are somewhat settled, the larger railroads work with the scalpers no longer. Representa- tives of some of the larger railroad administrations have told us that the custom formerly followed in rate wars, to furnish to dealers through intermediaries large quantities of tickets, has long been abandoned. The loss of money was too great when on the sudden cessation of hostilities the company did not succeed, as soon as the end was in sight, to repurchase the tickets before the dealers got wind of the matter. As regards the traffic in free passes, the possibility of it was denied on good authority. Even when not trust- ing this assertion to its full extent, it seems to be con- firmed that at present a rigid control is exercised over the issue of free passes, particularly to railroad employees. Much more questionable in its consequences as re- gards the sale to scalpers appears to be the granting of free passes to persons in public life (legislators, etc.), of whom it is feared that the interests of the administra- tion might suffer if their demands were denied. This nuisance had reached such an extent that the issue of free passes has been limited by the Federal Traffic Law 248 to distinct persons and purposes of interstate commerce. It is an open question for us whether through this a thor- ough-going change has been effected, or whether the un- scrupulousness of pubHc men goes so far as to sell the free passes issued to them for personal use. This, how- ever, belongs to the chapter of public morals; generally speaking, it is only another form of a trait peculiar to American life. We have heard no special complaints of swindling by means of counterfeit tickets. In so far as only tickets in our sense — that is, Edmondson tickets — are in question, the possibility of counterfeiting is admissible; hardly, however, concerning the very elaborately constructed through tickets and all tickets which are not made after the Edmondson pattern. Edmondson tickets we have found really only on lines of purely local importance. In general it must be said that, in the line of the ticket traffic in former times, certainly great and deplorable abuses have existed; it may even be admitted that these are not yet entirely eliminated. At all events, it is neces- sary, in view of the tendency to exaggerate American af- fairs, to use a certain precaution in accepting impressions spread abroad in this regard. What strikes the German, and especially the German railroad expert in America, most forcibly is the public sale of cut-rate tickets. This is characteristically Ameri- can. The hotel porter with us, who, at least until the general prolongation of the validity of return tickets, car- ried on, on the quiet, a flourishing trade in them and perhaps does so still, is, as well as his assistants and cus- tomers, not on a higher moral level than the scalper and his purchasers. On the contrary, in America there exists, 249 consequent to the disinclination of several State legisla- tures to pass laws for the suppression of this traffic, even a semblance of justification for this kind of business. The American railroads must, therefore, use self- protection. The beginning is made, in so far as nineteen of the foremost railroads have united to stop this nuisance. They publish at present, through the so-called "Railway Ticket Protective Bureau," the names of persons known as ticket scalpers who do business in Chicago. Yet it is after all doubtful if an appreciable success will crown their ef- forts; the unity in the proceeding would be, at all events, immediately endangered if, consequent upon a diversity in the business of the railroads, new rate wars, which are at present prevented by agreements, should break out again in the former intensity, even if only temporarily. DISPATCH IN PASSENGER TRAFFIC— FORM OF TICKETS. Edmondson tickets are seldom in use in America, as said before ; they are used mostly only for short trips, ap- parently to prevent counterfeits, and are easy to produce, owing to the simplicity of their make-up. Tickets in book form are also unknown; their place is taken by strips of paper, sometimes one meter in length, whose single, unper- forated coupons are intended for the several administra- tions interested, and are to be torn off. In addition, each coupon must be signed by the holder and the issuer, and the date affixed in case there is any favor connected with the ticket and it is therefore not transferable. Neither have we found the monthly tickets customary with us; one has, instead, the opportunity to buy a com- 250 muter's ticket for a greater number of trips, which is punched at a specified spot on each single trip. The institution of combination tickets is very Httle used, but the so-called mileage books find correspondingly greater favor. Originally good only on lines of the admin- istration that issued them, their value has been enlarged by agreements between various administrations which are mostly affiliated in one way or the other, though not to the extent as in our round-trip traffic. A greater resemblance to the latter is found in the so-called excursion ticket, most- ly, it is true, at a very much reduced rate, but without any possibility of freer movement. Complaints are frequently heard that very often through tickets over routes where they would be practical are not sold by the railroad admin- istrations simply for reasons of competition. Each deviation from the ordinary single trip within the home traffic of the administration causes, at an even greater loss of time to the traveler, a difficulty in the dis- patch of the baggage than it did even with us in the good old times of the baggage check. (Compare the conclusion of this chapter.) The traveler is not fully conscious of this, for the only reason that this proceeding is enacted, not, as with us, in the moment of departure, but a full day or at least several hours before, and not at the depot, but in one of the local offices of the company. Much has been done in America for the establishment of a larger number of such offices, which make it easy for the public to procure tickets at any time, and this is done at an increasing rate through reasons of competition. Another motive for this is found in the fact that the American is not used to map- ping out himself his plan for longer trips. He leaves this business, unless special reasons exist, to the official in the 251 booking office, who is all the more willing to attend to it, as it puts him in the position to shape the trip in the way most favorable to his administration. TIME-TABLES. The arrangement of a trip extending over several rail- road administrations presents considerable difficulties, be- cause the schedule data which are accessible to the public at large are mostly confusing — at least, very meager; where, however, this is not the case, there is danger that the trip is arranged in favor of the issuing administration and not for the benefit of the traveler. On such occasions the experienced traveler finds very frequently that even a misrepresentation of actual facts is resorted to. At any rate, one must be cautious not to accept the route of a time-table as correct without further questioning. Gen- erally a railroad administration represents its own line as the only one available; under all circumstances it desig- nates its line on its own time-table as the shortest and most direct way, while the competing line appears as the oppo- site. The performances of general passenger agents in this direction, even in so-called official notifications, are hardly intelligible to European travelers. For instance, there are enumerated, not infrequently, according to the time-tables of the various administrations, half a dozen air lines between two great cities, while in reality perhaps five of these are circuitous routes. The American puts up with the inevitable ; for him this is but an advertisement like any other, to which only the uninitiated falls a victim without investigation. The time-tables (pamphlets or folders) are, as re- gards information, strictly separated according to railroad 252 companies, in so far as they are not compiled for combined railroad systems or refer to special trains which run under mutual arrangement. Their make-up is nearly always pleasing to the eye, many of them show handsome designs and colors and frequently very good views of points of in- terest along the route. Of course they always set forth, with exaggerated praise, the advantages of the lines and their accommodations. They are distributed free, and can be had in quantities hot only in the railroad depots and the cars, but also in hotels and restaurants, as well as at the agencies. We are told that the time-tables in the hands of the train crews for official purposes diverge frequently from those given out to the public, so that the latter cannot be relied on at all. We were not able to convince ourselves of the truth of this statement ; it may be correct in so far as delays, which by experience must occur and which have a detrimental influence on the run of a train, are withheld from the knowledge of the public for reasons of competi- tion. At all events, the absence of an actually correct guide-book, issued by an uninfluenced party, which con- tains also the connections with other roads and which is provided with a geographically correct general map, is noted with unpleasant sensations by European travelers. GUIDE-BOOK. The most comprehensive guide-book is the book pub- lished by the National Railway Publication Co., "The Offi- cial Guide," which has been recognized as their organ by the National Ticket Agents' Association. It has a thick- ness of 5 c. m., a length of 25 3-4 c. m. and a width of 18 c. m., while our "Imperial Guide Book" has a thickness of 253 3 c. m. by 23 1-2 c. m. in length and 14 1-2 c. m. in width. This circumstance alone renders the book, which cannot be taken apart, like ours, in separate sections, rather incon- venient for being carried on the trip. Besides, it lacks the general map absolutely necessary for comprehensive use. It contains thirty sectional maps of North America, Mex- ico and Central America, each covering one page of the book, which do not give a general survey of the whole ter- ritory, and besides these also the special system charts printed on the front page of the time-table folders of the railroad companies. Numerical references to the respect- ive time-tables and routes are lacking entirely. In addi- tion to this, the index at the end of the book leaves very much to be desired, as it only shows to which railroad ad- ministration the different stations belong, without, how- ever, indicating the respective page number of the tables, which in our guide-book so greatly facilitites the finding of one's way. The book begins with a general index of railroad and steamship lines, which, however, gives only the number of the page on which is to be found the special data for each railroad, among others the length and width of track. These data alone show that the contents of the book are in part different from the "Imperial Guide Book" issued by our post-office. Still more is this evident by the remarks concerning the railroad system of the country which pre- cede the time-tables proper. One notices at once that the book is not intended for the traveling public alone, but also for other private persons and business men who are con- nected with the railroads, as well as for the professional railroad man. For instance, the book contains informa- tion relating to railroad clubs and official meetings, to 254 changes of a personal character which have taken place in leading and influential railroad circles, and a list of the heads of the several service branches of all railroads. This is of importance to the private person, for the reason that it enables him to address in all official and business matters the leading official in person, instead of, as with us, the office. This is followed by an enumeration, in alphabetical order, of the almost numberless railroad associations, and finally by a statement of the number of miles of each admin- istration, with the addition of the sleeping-car and express companies connected with them. The latter information recurs in the book at the top of the time-tables of each railroad company, giving in de- tail the names of the president and the other high officials ; besides all these the State supervising commissioners are named. At the same time, information is given regarding through trains, sleeping-cars, and other special arrange- ments for comfort (mostly in advertising style), not, how- ever, the connections of the different railroads. Regarding the railroad charts reproduced ahead of the time-tables of the several railroad administrations, all that is necessary has been told in the preceding part, under the heading "Time-tables." A definite order in the enumeration of the several railroad administrations, with their various lines, is not recognizable. This is also a defect, because one has, under the circumstances, to refer continually to the index. The extraordinary large number of independent roads should have made it appear all the more advisable to choose the alphabetical order. Every one who is familiar with our "Imperial Guide Book" — our various other official railroad guide-books do not coimt in this respect — will have perceived from this 355 short statement where the dark side of the American guide- book lies. It would be wrong, however, to condemn the guide-book, on that account, as a whole. It is all a matter of habit with a railroad guide-book. It is certain that the American book, which is issued monthly at a cost of 3 marks (by subscription, 2 marks), is not in so general a use as our "Imperial Guide Book." The reason for this is, on the one hand, that the traveling public, as stated before, is fairly swamped with time-tables issued by the several rail- roads; on the other hand, the previously mentioned habit of the Americans to have the plans of their trips mapped out in the local offices of the railroads. The possibility of obtaining the desired information from the American guide-book exists with corresponding practice, but it is not so easy as with us. We have had occasion to discuss the objectionable features quoted, especially the lacking reference to page numbers, with Mr. W. T. Allen, in New York, the pub- lisher of the book. Mr. Allen stated that the fault lies principally with the frequent change of schedules, with the large extent of the material, and also with other reasons. He admitted frankly that, taking it all in all, our "Imperial Guide Book" is adapted, as to form and contents, in quite an eminent manner for the use of travelers. He did not inform us of what character the "other" reasons were; without doubt, however, they are considerations of compe- tition and petty jealousies among the several railroads. Very much better for handy use is the "Travelers' Railway Guide," issued by the same concern, as well on ac- count of its much smaller bulk as also because of its very good station index provided with a page indicator. In other respects the "guide" has indeed the same shortcom- 256 ings as the large book, but it contains, for the small price of 25 cents, an enormously abundant time-table material. The printing is very good in both books, nor is their reliability to be doubted. At least they give correctly the time-tables in force at the time of their issue ; for arbitrary and sudden changes, occurring even now from time to time, the guide-books must not be held responsible. SALE OF RAILROAD TICKETS. Agencies serving the passenger traffic are found not only in such localities where the several companies have stations, but also in places where traffic is to be expected, or where a competing road has a station or agency. (In a certain measure, not to be compared, however, in extent, our large German steamer lines attempt to imitate the American example. ) It was particularly noticeable in the West, how strenuous all, even the smallest Eastern rail- road administrations, try to attract travelers to their lines by agencies advertising extensively. The agencies keep, in order to prevent the travelers they have captured from using other lines, a stock of tickets for the feeding lines up to the line which they represent and, if need be, also for the connecting lines up to the terminal station. All cities have so-called local offices within the sphere of their own administration, as said before. The Pennsyl- vania Railroad has alone about twenty local offices, with numerous clerks in New York City. To every local office is attached an office of the Pullman and express companies, so that nothing more remains to be settled for the traveler in the railroad depot itself. The ticket windows in the de- pots are not, as a consequence, crowded to such an extent 257 as with us ; at least, the better class of the public keeps away from them as much as possible, except for short trips. Notwithstanding this, it happens that the traveler has to wait a long time at the window if he be unfortunate enough to stand in line behind a passenger for whom a ticket a yard long is made out. If, by ill luck, several travelers of this kind are ahead of him he may miss his train. But this is all his own fault ; he ought to have gone to the local office long before that. Special windows are found in large cities for the suburban traffic. The day-stamp is imprinted by hand (the date is some- times added in hand-writing) only on the return and ex- cursion tickets with limited time. We have nowhere seen a stamp-press such as is used by us. On the other hand, we observed in several depots that each ticket clerk, when several of them work at the same window, uses an in- dividual stamp. The time of day and month, as well as the stipulated number of trips, are printed on such tickets as are subject to control as to the number and the days of the trips (frequently this is the case with commuters' tickets) ; so that, under certain conditions, a threefold cancelling by the punch of the conductor is necessary. The system of control of the thousand-mile books is also very bothersome, as on their presentation the owner's signature can be, and often is, required by the conductor. CONTROL OF TICKETS. A control on the platforms of stations, as is usual with us, is nowhere known. Sometimes, especially in large de- pots, a cursory advance control is exercised at the gates on passing to the several platforms, separated from each 258 other. The control proper takes place exclusively on the train. For this reason the platforms are not strictly barred against access; neither is this necessary, because the cars are connected with each other in all trains, so that the con- trol of tickets can be accomplished without difficulty on the train. Tickets for admission to the platforms are not fur- nished — at least, we have seen none of them anywhere. Mention should be made of the so-called hat-tickets, which the conductor uses in his rounds of revision ; these are narrow strips of colored cardboard. The conductor sticks them in the hat of the passenger, after having ex- amined his tickets and having ascertained where he must transfer or alight from the train, so that he can always see, in passing, where the traveler must leave the train. Several railroads provide small wooden holders, which facilitate the fastening of these tickets to the hat. As a great accommodation to the traveler, it must be regarded that on nearly all through trains the tickets are collected in the evening by the conductor, against a re- ceipt, and are handed back on the following morning, in so far as they have not expired meanwhile. BOOKKEEPING AND AUDITING. The bookkeeping of the ticket offices is in America, as with us, comparatively simple, and this is in accord- ance with the nature of the transactions. We found, how- ever, places where stubs of the tickets sold were retained and used as a basis for the bookkeeping. Apparently the service on nearly all stations of any significance is so ar- ranged that a second employee enters the sale, and not the official at the window, thus exercising a control over the re- 259 ceipts. In the local offices, too, the waiting on the public is nearly everywhere separated from the cashier's office. The offices for the sale of tickets in the stations or in the cities are hardly anywhere used, as is the case with us, as station pay-offices — that is to say, for the paying out of money. Evidently this is the result of a lack of confi- dence, which appears justified by conditions in America, as a pay-station which receives not only money and accounts for it in cash, but pays out money and gives drafts as well, instead of cash, is incomparably more difficult of con- trol than a mere money-receiving office. Of course the American system is much more expensive than ours. The sale of tickets by conductors in America is more general than with us. This may find its explanation in the fact that on many stations tickets for connecting trains, etc., are not for sale. Railway men, who ought to know, complained seriously that embezzlements are of frequent occurrence through this way of selling tickets. The auditing of the sales of tickets and the amounts received is very clumsy at the various railroads. While with the Prussian-Hessian State Railway the auditing takes place only at intervals of three months for the passen- ger traffic, the ticket agent of nearly all American railways is obliged to account for the sale of tickets daily and month- ly, and must besides furnish to the auditor of passenger receipts monthly statements from the cash-book. Like- wise, conductors authorized to sell tickets are obliged to prepare daily cash and mileage reports, and also furnish a monthly statement of the money they have paid. These reports also go to the auditor ; at large stations, however, probably first to middlemen, the ticket receivers, who transmit the collected accounts to the auditor. The tickets 260 are to be collected from the passengers on the train and delivered to the auditor in systematic order, to be used in examining the records. This proceeding is not always ob- served, as we noticed — not completely, at any rate, as to its first part. A considerable amount of work results, of course, from this system of reporting, for the control offices. To what extraordinary extent the clerical work is car- ried on in the passenger traffic is best shown by the fact that to the Pennsylvania Railroad (east of Pittsburg) alone have been transmitted, in the year 1896, 268,058 accountings and statements; that is to say, calculated for the yearly work days, 900 in round figures daily! Later figures are not known, but the routine has not been changed since. As these documents are to be examined, passed upon and entered almost exclusively in the office of the auditor, one can easily understand that the personnel em- ployed in this office is very numerous in comparison to its utility. For example, 300 employees were active in the auditing office of an administration with a road length of 9,417 kilometers (including the leased tracks), while at the same time the Prussian-Hessian State Railroad, with a road length of 32,000 kilometers in round figures, em- ployed a personnel of 335 controlling officials for the pas- senger traffic ; therefore, only 10 per cent, employees more for a road length three and one-half times as long and for yearly receipts four times as large. In this direction it has to be considered that the selling depots for railroad tickets keep generally in stock only tickets for a single class. Very rarely a second class of car accommodation is known, as previously mentioned. On the other hand, two circumstances operate in America in 261 an aggravating way — i. e., the lack of unity in the form of the ticket, and, more than that, the absence of price stipula- tions on the tickets. If one considers with all this the obligation of railroad employees to issue the special Pullman tickets, for which, of course, a particular system of auditing and control exists, it becomes clear that the passenger dispatch on the American railroads — even when fully appreciating that conditions are different from ours — is cumbersome and costly to an extraordinary degree. By a reasonable sim- plification there might be realized in this department large economies without detrimental consequences and rather adapted to secure increased receipts. DISPATCH SYSTEM IN THE BAGGAGE TRAFFIC —CHECK SYSTEM. The railroads of the United States grant, almost en- tirely, free transportation of baggage up to the weight of about sixty-eight kilograms, which is not surprising, con- sidering the high passenger rates. This circumstance of- fers great facilities for the dispatch system; the greatest part of the pieces of baggage requires no weighing, as the outward appearance proves the right to free transporta- tion without further examination. Every piece of free bag- gage is marked by a numbered check attached to a leather strap; the passenger receives, for identification, a check bearing the same number, hence the designation "check system." In accordance with this the piece of baggage is not covered with pasters nor does the passenger get a bag- gage receipt, hence no clerical work at all is necessary. The brass checks heretofore in exclusive use have been 26a replaced, by most of the administrations, by checks of heavy paper or cardboard. Several lines still use the brass check. As, however, the use of a variety of checks renders the service, particularly in the through baggage traffic, un- necessarily confusing, the minority of the lines still ad- hering to the old system will, as we are told, be compelled to abolish the brass checks, so that these will presumably be restricted to the service between single large stations within a small radius. For the abolition of the brass check, as a baggage dispatcher informed us, the fact was decisive ; that the continual necessity of sorting the arriving checks and their return to the point of departure implied too much work and that the wholesale disappearance of checks, as well as the leather straps, involved too heavy an expense. The immediate return requested by a notice placed on the check itself has never been accomplished by the larger dis- patch centres. The dispatch of free baggage on the part of the railroad is at all events very simple, even in this form. On the other hand, the dispatch is very complicated as soon as the question of excess weight arises. According to our observations, which extended to the examination of all dispatch and accounting blanks, the piece of baggage liable to charges is not only entered in the book of the dis- patch officer, but way bills are also made out which causes considerable work and delay. This complicated system of dispatch for pieces of bag- gage, on which excess weight has to be paid, is, however, in general not of great importance, because the number of these pieces is comparatively small. The reason for this is that, as mentioned before, baggage is allowed free trans- portation up to about sixty-eight kilograms. In addition a 263 favorable influence is exerted by the custom that the Amer- ican delivers his baggage only in exceptional cases at the depot. As he likes company in traveling on the railroad and therefore gives preference to the car system against the compartment system, so the transportation by street car or elevated railway in the city traffic in general, and in particular on the trip to and from depots, forms properly the only means of transportation which comes into ques- tion for the American. The cab that transports also bag- gage of a heavier order is the exception and is used in a small proportion only; cab fares are so high that even the people of the better middle class can hardly afford them. The question arises whether the high fares are the cause of the little use made of cabs, or whether the fares are so high because the cabs are so little used and would not pay without the high price. The truth lies probably in the middle; both circumstances have contributed to this state of things and the high valuation of human energy has prevailed. This is evident from the fact that transpor- tation of baggage by wheelbarrows is hardly ever met with. Hotel stages, which take charge of baggage, are only found in exceptional cases in smaller localities, notably in the West. If, accordingly, the American is confined to the use of street cars and elevated railways, etc., for traveling to and from the depot, he can as a matter of necessity carry his hand baggage only. This explains the establishment of transportation enterprises (local express companies) sole- ly for these purposes ; their great financial success results from the great inclination toward traveling of the Ameri- can and the rates of these companies, which are, accord- ing to our conceptions, still very high. 264 There is a good and a bad side to the necessity of using these express companies. Although their transpor- tation rates are high, they are far below those of the cab service ; and although the baggage must be ready a great deal earlier before the departure, and one is frequently forced to wait very much longer after arrival for the bag- gage — we were compelled to wait many hours and other Germans complained of a still greater delay — it is, on the other hand, comforting to be relieved of the care of trans- portation. One receives before departure a check from the express company which is exchanged for a railroad check at the depot, and on arrival at the destination one ex- changes again the railroad check for the check of the ex- press company. In this way these companies have built up, so to speak, a monopoly of the transportation of bag- gage; this goes so far that even well-to-do people owning carriages use the express companies for forwarding and bringing back their baggage. At all events, we have had the experience that if the passenger claims his baggage on arrival at his destination at least an hour is wasted until the baggage is loaded on a cab or a baggage wagon. These conditions are, of course, the consequences of the whole proceeding and we decided finally to adopt the general custom. For the railroad administrations the procedure has the great advantage that the baggage is received in bulk and early (the small number of individual checkers does not cut any figure) and they need not increase the number of employees by men who would be only temporarily busy if it were otherwise, which is of great importance, consid- ering the high valuation of human energy. The same holds good for the delivery of baggage, whereby little con- 26s sideration is shown to individual receivers, according to our experience. The American railroads retain, up to the present, their dispatch system. If they have substituted a cardboard check for the brass check, if they use to a larger extent a piece of twine instead of the leather strap (as it seems) for fastening the check to the baggage, and if they finally abolish the metal frame fastened by the strap to the card- board check for the protection of the latter, the cost of dis- patch and the administration of help and material will be substantially reduced. Whether this development has anything to do with the miscarriage of baggage, of which complaint is made by many of our countrymen who return from America, is open to doubt. It would not be surprising. When one sees how the baggage is handled on American railroads it ap- pears really as a piece of good luck that we have had no cause for complaint in this respect, apart from some dam- age to our trunks. Once only we could not get our bag- gage on arrival of our train; this was in Kansas City, where evidently the entirely insufficient station accommo- dations were the cause of the delay. The question as to what the German railroad admin- istrations can learn from the American dispatch proceed- ing has been ventilated so often that a few short remarks relating to it will be sufficient. (Compare, especially, Dr. V. d. Leyen, essay in the "Gazette of the Association of German Railroad Administrations," 1893, No. 97.) In the first place, the conditions on this and the other side of the Atlantic are radically different, as our statements show without difficulty. The free transportation of baggage is very much more restricted with us as compared with the 266 American railroads ; in the South of Germany no free bag- gage is allowed at all, in the North it is granted up to twenty-five kilograms. Consequently, the number of pieces of baggage forwarded free of charge is incompar- ably less with us ; the number of paying pieces, on the con- trary, is very much greater. For this reason it pays only at the more important traffic points to adopt a different system of dispatch for baggage free of charge and charge- able, and this actually exists; the principal aim with us is to establish as simple a system as possible for charge- able baggage, which permits of rapid dispatch of the traveler and causes the smallest possible expense to the railroad administration. That the traveler separates him- self from his baggage will not become the rule with us as long as the use of cabs and other vehicles for man and bag- gage is possible at moderates prices. In conclusion we remark that the express companies mentioned here are not necessarily identical with com- panies of the same name which handle the express freight traffic of the railroads. 267 EIGHTH CHAPTER. Freight Traffic. Rates. — Statistical Average Freight Rate. — Rate Rebating.— Rate Charges for the Use of Private Freight Cars. — Bills of Lading. — Accounts and Accounting. — Car-loads. — Use of Freight Cars. — Addenda: Mineral, Cotton and Milk Trans- portation. It is difficult for the foreigner to fathom the rules gov- erning American freight rates. The freight-rate tables and other printed matter throw, as a general rule, little light upon the subject. It is, consequently, only possible to penetrate the mysteries of the American railroad tariff with particular efforts and with an expenditure of time out of all proportion. Observations and discussions, however, during the voyage and subsequent study of the material have enabled us to gain an insight and some knowledge. (Compare especially Dr. v. d. Leyen, "The North Ameri- can Railroads" (Leipzig, 1885, Veit & Co.), "The Finan- cial and Traffic Policies of the North American Railroads" (Berlin, 1895, Julius Springer), and Franke, "Archives for Railroad Matters," 1904, part 2, page 267, and fol- lowing. ) The difference in the method of fixing freight rates for the railroads of the United States and for the German State railways is founded principally on the difference of the point of view from which one starts on this and on the other side of the ocean in establishing rates. In America the main principle is, as is only too natural with all purely 269 private business corporations, to obtain the largest pos- sible dividend for the private capital invested in the rail- roads; on the German side, on the contrary, it is the particular aim to lay the greatest weight upon general economic points of view, without shirking even from the possibility of a deficit in the receipts. The American rate tables show, therefore, a rather crude construction. One and the same rate is often valid for a large group of sta- tions separated by wide distances, as upon the whole dis- tance in itself is not as important a factor for the fixing of rates as it is with us. It is rather a fact that the rates for short hauls in comparison to long hauls are fixed very high in America. The advantage of the geographical sit- uation, meaning the natural market, is not recognized in America, but the competition of the more remote shipper with the nearer one is facilitated to the largest extent by the shaping of the rates. The reason for this lies not in economic considerations, but rather in that the rail- roads feel secure of the short-haul traffic even with propor- tionately high freight rates, while they endeavor to attract the long-haul traffic, so large in America, by reducing the rates to their utmost limit. Of course, competitive con- siderations exert a decisive influence in this connection. The freight rates are not permanent, but more or less fluctuating ; that is to say, rates are raised and the burden of the shipper is increased whenever the railroads see the possibility to do this. However, freight classifications exist also in America (especially the official. Western and Southern classifica- tion). They contain six classes; the Western classifica- tion has five principal and several secondary classes (com- pare also the third chapter), and show more or less varia- 270 tions between each other. Notwithstanding all arbitrari- ness in other directions, a system of valuation appears in these classifications. The different freight classes apply to merchandise freight as well as to car-loads. The mer- chandise freight is rated in general according to the three higher classes, the car-loads according to the three lower ones; however, no fixed rule can be established. The freight rates in the standard classes are high, and surpass, for short distances, our standard freight rates very consid- erably. Moreover, the minimum freight rate for merchan- dise freight is about i mark; for car-loads, 25 marks, against 30 pfennigs and 6 marks in the Prussian-Hessian and most of the remaining German railroads. (The dif- ference in the minimum freight rate for merchandise freight on the North American and the German railroads is remarkable, especially for the reason that in Germany nearly 50 per cent, of all merchandise freight shipments yield only freights from 30 pfennigs to i mark.) American freight rates are divided into very many grades; they consequently reach and sometimes fall below the level of the German standard rates for long distances ; that is to say, for distances which with us do not come into question for the bulk of the traffic. However, as with us the bulk of the freight movement takes place within dis- tances which, according to American ideas, must be called short, the natural consequence of geographical and eco- nomic conditions, it is permissible to say that the goods transported in standard classes, which amount, with us, to about 35 per cent, of the total freight, enjoy in Prussia- Hesse and nearly throughout Germany a lower freight rate than the goods forwarded in America according to the standard classes in force in that country. (The aver- 271 age distance of transportation of all freight amounts with us to 115 kilometers; in America, to 390 kilometers.) The local freight rates of the Pennsylvania Railroad system communicated to us are already known, (Com- pare Franke, "Archives for Railroad Matters," part 2, page 267, and following.) We give here a comparative table for the Great Northern and the Duluth, Watertown and Pacific railways, showing the rates for a few im- portant articles in the standard classes and for potatoes (which are in Germany articles coming under special tariff 2 — rate for raw products), which confirms the state- ments made. 272 Freight Rates for Grain, Flour, Oilcakes, Oilcake Flour and Potatoes. America Frussian-Hessiau State Railways Grain and Flour Oilcakeg&Flour Potatoes Special Tariff Special Tariff Excep Tariff tionat No. 2 No 1. No. 3 (Raw Products) y ^S^. ^5^. ^ t bo ■o«n , ■o « a L o .2 Q Rate per Rate after the regu Q forwardi] per 1 Ton ilometer. Rate per rate after the regu n forwardi per I Ton IOmeter. Rate per Rate after ■ the regu n forwardi per I Ton IOmeter. Rate per 100 Rate after : the regu: ,n forwardi per I Ton ilometer. 100 kilos Freight ducting Prussia: dues K 100 kilos Freight ducting Prussia dues Ki 100 kilos Freight ducting Prussia dues Ki kilos Freight ducting Prussia dues Ki km Pf. Pf. Pf. Pf. Pf. Pf. Pf. Pf. 8 28 27.5 10 4.5 8 2.6 8 2.6 16 37 19.4 13 4.5 10 2.6 10 2.6 24 41 14.6 17 4.5 12 2.6 12 2.6 32 46 12.5 20 4.5 14 2.6 14 2.6 40 50 11.0 24 4.5 16 2.6 16 2.6 48 55 10.2 28 4.5 18 2.6 18 2.6 56 60 9.1 34 4.5 24 2.6 19 1.8 64 64 8.6 38 4.5 26 2.6 21 1.9 72 69 8.3 41 4.5 28 2.6 23 1.9 80 73 8.0 45 4.5 30 2.6 25 2.0 88 78 7.8 49 4.5 32 2.6 26 1.9 97 83 7.6 53 4.5 34 2.6 28 2.0 153 105 6.1 81 4.5 46 2.2 41 1.9 209 124 5.4 106 4.5 58 2.2 S3 2.0 257 138 4.9 128 4.5 69 2.2 64 2.0 306 151 165 4.5 4.4 150 4.5 79 90 2.2 2.2 74 85 2.0 2.1 354 171 4.5 402 179 4.2 193 4.5 100 2.2 91 2.0 499 202 3.8 237 4.5 122 2.2 105 1.9 595 225 3.6 280 4.5 143 2.2 118 1.8 708 252 3.4 331 4.5 168 2.2 134 1.7 805 275 3.3 374 4.S 189 2.2 148 1.7 901 294 3.1 417 4.5 210 2.2 161 1.7 998 349 3.4 461 4.5 232 2.2 175 1.6 1.110 413 3.6 512 4.5 256 2.2 190 1.6 1,207 468 3.8 555 4.5 278 2.2 204 1.6 1,288 505 3.8 592 4.5 295 2.2 215 1.6 Regular forwarding dues per 100 kilos in Pfennig : 1 to 50 Kilometer 6 Pf. 51 to 100 " 9 " over 100 " 12 " The Prussian Rates framed by heavy lines are lower than the correspond- ing American Rates. 273 Freight Rates for Lumber. Prussi.iu-Hessian America State Railways Special I'"^ I 100 liters 40 Quarts ,„„ , „ 45.ruter» =100 kilos Ft. Ft. Prussian-Hessian , State Railroad 100 Kilos Broken I Car- Shipments I loads Pf. a) Chicago and Great West- em Railroad May wood Bellewood Lombard North Glenellyn Ingalton St. Charles Wasco Lily Lake Virgil Richardson Sycamore Clare Esmond Lindenwood Holcomb Stillman Valley Byron Egan German Valley Bolton Pearl City Kent Stockton b) Baltimore & Ohio Rail- road Willow Creek McCool Babcock Woodville Suman Coburg Alida Ritts Wellsboro Walkerton 11 15 26 29 42 50 58 64 71 74 84 95 105 113 119 126 134 147 155 178 185 192 203 68 71 74 79 84 90 93 100 105 129 79 79 79 81 81 82 83 83 83 83 89 92 96 100 104 108 108 108 108 108 108 108 108 83 83 83 83 104 104 104 104 104 125 174 174 174 178 178 181 183 183 183 183 196 203 211 220 229 238 238 238 238 238 238 238 238 183 183 183 183 229 229 229 229 229 275 23 28 41 44 60 69 78 85 93 96 107 119 130 138 144 151 159 172 180 201 210 217 228 89 93 96 101 107 113 117 124 130 1S4 18 21 29 31 42 48 54 59 65 67 74 83 90 96 100 104 110 118 124 138 144 149 156 62 65 67 70 74 78 81 86 90 106 337 Freight for Milk and Cream to Philadelphia. Shipping Stations Dis- tance km. Milk 1 can 180 40 qts. Iiter8= or 45,4 100 liters kilos Pf. Pf. Cream 1 can 100 40 qts. liters = or «,4 100 liters kilos Pf. Pf. Pruss.-Hess. State Rail. 100 kilos Brk. Car- Sh'p'ts loads Pf. a) Pennsylvania Rail- road Haddonfield Chester Heights Birmingham Salem Hightstown Plainsboro Oxford b) Philadelphia and Reading Railroad. Norristown Gwynedd North Wales Parkland Port Kennedy Langhome Grenoble Newtown Rockland Byers Barto , Weston Bethlehem Reading AUentown 11 31 39 61 66 72 79 26 27 81 32 32 34 85 37 87 61 84 85 87 93 99 83 62 88 83 88 83 83 62 62 83 62 62 83 62 62 83 83 83 83 88 83 83 188 187 183 183 183 183 183 137 137 183 137 137 183 137 137 183 183 183 183 183 183 183 166 125 166 166 166 166 166 125 125 166 125 125 166 125 125 166 166 166 166 166 166 166 366 275 366 366 366 366 366 275 275 366 278 275 366 375 275 366 366 366 366 366 366 366 23 47 56 82 87 94 101 41 42 47 48 48 50 52 54 54 82 107 108 110 117 123 18 34 39 57 60 65 70 29 30 34 34 34 36 36 38 38 57 74 75 76 81 85 Freight for Milk and Cream to San Francisco by the Atchison, Topeka and Santa Fe Railroad. Shipping Stations Dis- tance Milk an I can 40 qts. or liters d Cream 100 liters = 100 kilos Pruss.-Hess. State Rail. 100 kilos Brk. Car- Sh'pm'ts loads km. Pf. Pf. Pf. 13 42 93 25 30 16 42 93 29 32 19 43 93 33 24 26 42 93 41 29 29 42 93 44 31 81 42 93 47 34 Point Richmond East Yard San Pablo Gateley Pinole Dupont , 338 Freight for Milk and Cream to San Francisco by the Atchison, Topeka and Santa Fe Railroad. Shipping Stations Dis- tance km. Milk anc 1 can 40 qts. or 45.4 liters Pf. . Cream 100 liters^ 100 kilos Pf. Pruss.-Hess. State Rail. 100 kilos Brk. Car- Sh'pm'ta loads Pf. Luzon • 32 39 43 47 50 53 58 64 71 76 87 92 97 103 105 107 113 118 131 136 140 150 158 161 163 166 172 177 209 230 42 42 43 44 44 50 50 50 54 58 58 62 67 71 71 75 79 79 83 83 87 87 87 93 93 96 100 104 104 104 93 93 93 97 97 110 110 110 119 128 138 137 148 156 156 165 174 174 183 183 191 191 191 203 303 311 230 229 229 229 48 56 60 66 69 72 78 85 93 98 110 116 121 127 130 132 138 141 146 151 165 175 183 186 188 191 197 202 333 253 34 89 Portal 43 Muir 45 Vine Hall 48 Maltby Bay Point 50 54 59 65 68 Oakley 76 81 Bixler 84 Old River 88 Middle River Hurd 90 92 Holt 96 Gillis 93 San Joaquin River 101 104 Burnham 114 131 126 Harrold Huntley 128 129 181 Clawson 135 Empire Cressy Merced 139 160 174 Freight for Milk and Cream to Washington by the Baltimore and Ohio Railroad. Shipping Stations Milk and Cream 1 can 40 qts. or 45,4 liters Pf. 100 liters = 100 kilos Pf. Pruss.-Hess. State Rail. 100 kilos Brk. I Sh'pm'ts 1 Pf. Car- loads Laurel Garret Park Halpine Rockville Derwood Washington Grove. Gaithersburgh 83 83 83 88 83 83 83 183 183 188 183 183 183 183 47 32 38 41 47 48 50 34 24 28 29 34 34 36 •539 Freight for Milk and Cream to Washington by the Baltimore and Ohio Railroad. Shipping Stations Milk and Cream | Dis- 1 can 100 40 qts. or liters = tance 100 liters kilos km. P£. Pf. 35 83 183 39 83 183 42 83 183 43 83 183 47 83 183 48 83 183 58 104 229 58 104 229 63 104 229 74 104 229 79 104 229 83 104 229 85 125 275 92 125 275 74 104 229 82 125 275 Pruss.-Heas. State Rail. 100 kilos Brk. I Car- Sh'pm'ts I loads Pf. Ward Clopper Waring Germantown Boyds Buck Lodge Bamesville Dickerson Tuscarora Doubs Buckeystown Lime Kiln Frederick Junction. Frederick Catoctin Garret Mills 52 56 60 61 66 67 73 78 84 96 101 105 108 116 96 105 39 42 43 45 46 61 54 58 67 70 73 75 81 67 73 840 NINTH CHAPTER. The Relation of the Railroads of the United States TO THE PoST-OfFICE ADMINISTRATION, TO THE Pullman Company and to the Express AND Telegraph Administrations. Railroad Post-Office Administration. — Pullman Company. — Express and Telegraph Companies. While in the German Empire the relations existing between the railways and the postal service are well de- fined legally, and while the former receive practically no compensation whatsoever for the carrying of the mail, the development of affairs in the United States has pro- gressed on entirely different lines. The gratuitous trans- portation of mail matter on the part of American rail- roads is altogether out of the question. A few data may serve to illustrate the postal conditions in the two coun- tries, principally in their bearing on railroad revenues. The following figures are based chiefly on the official re- ports of the American Postmaster-General, as compiled for the fiscal years 1901-02. (Compare also "Statistique generale du Service Postale," Bern, 1903.) An item of more than 20,900,000 marks, which the American postal administration paid to private railroads for the use of mail cars during the fiscal year 1902-03, has been left out of consideration by us, for the reason that in Germany the Imperial Post-Office Department owns its own rolling stock. Under these circumstances 341 another item of 1,806,921 marks, which the German pos- tal administration paid to the Prussian-Hessian railroads for using, housing, cleaning, lighting, etc., of mail cars, had likewise to be omitted. The total postal revenues of the United States amounted, in 1901, to 468,500,000 marks, the total ex- penditures to 478,500,000 marks. Thus there was a deficit of 10,000,000 marks. The German postal depart- ment, on the other hand, showed a surplus of 25,000,- 000 marks, its income in that year being 470,000,000 marks; its expenditures, 445,000,000 marks. The rail- road mail routes comprised in the same year in the United States a mileage of 299,602 kilometers; in Germany, 53,- 148 kilometers. The number of kilometers traversed by railway mail cars amounted, in America, to 497,000,000; in Germany, to 241,000,000 kilometers. In America there was, on an average, one post-office for each 77.07 square kilometers with 990 inhabitants; in Germany, one for each 8.85 square kilometers with 1,497 inhabitants. While the German postal department paid to the Prussian- Hessian State railways (with a length of about 32,000 kilometers) 4,794,103 marks (not much more than $1,- 000,000) for the transportation of mail matter during the fiscal year 1902, the American department had to pay for this service the large sum of $36,195,116.18, or 150,- 572,000 marks. Since the total income of all American railroads, as derived from freight, mail and express freight traffic, amounted to 5,899,100,000 marks, the item of 150,- 572,000 marks, realized from the transportation of mail matter, forms 2.55 per cent, of the total receipts for the freight traffic. As within the territory of the Prussian- Hessian railroads the revenue derived from freight traf- 342 fie aggregated, all in all, 920,541,606 marks, the income of 4,794,103 marks from the mail traflfic constituted but 0.52 per cent, of this sum. The following figures will show the extent to which the revenues of the American railroads from freight traf- fic are influenced by the payment for the transportation of mail matter and the per cent, of the income from freight, mail and express traffic: COMPENSATION RECEIVED FOR TRANSPORTATION OF MAIL MATTER. Railroad. Km. Marks. % Union Pacific 9,272 9,150,000 5.7 Pennsylvania (east of Pittsburg) . 9,417 8,500,000 2.2 New York Central & Hudson R. . 5,507 10,000,000 4.6 Southern Pacific 14,764 8,150,000 3.4 Baltimore and Ohio 7,148 5,650,000 2.7 Illinois Central 6,920 3,300,000 2.5 Pennsylvania (west of Pittsburg) 8,144 ,3,275.000 2.7 This does not include the amounts which the several American railroads derive as their share from the pre- viously mentioned 20,900,000 marks in return for the use of mail cars. As there are used in the United States altogether about 2,090 railway mail cars (in 1902-03 there were in operation 1,116 complete mail cars and 2,923 cars with mail compartments, three of the latter being counted as a complete mail car), the yearly compensation for the use of each car, including cleaning and lighting, amounts to 10,000 marks. Considering that such a car will cost on an average 14,560 marks, and that the Prussian- Hessian railroads received a compensation of but 1,806,- 921 marks for housing, cleaning, lighting, etc., of all 343 mail cars, it follows, as is also shown in detail in the eighth chapter, that the United States are generously dis- posed toward the railroad administrations. THE RAILROADS AND THE PULLMAN SYSTEM. The American railroad companies generally make use of but one class of passenger coaches — the so-called standard car. Only in the West real second-class cars are found, for the use of which a not considerably reduced fare is charged. It is well known, however, that, in spite of contrary opinions, there is a distinction of classes on American railroads and that this classification is not even limited to four classes; in fact, with quite a number of trains five classes can be determined. The only point of difference consists in this, that the American railroads themselves do not operate these special class cars. This branch of the service, including the employment of the personnel, is managed by separate companies, of which, however, only the so-called Pullman Company is of any impor- tance. There are, to be sure, several smaller sleeping- car companies, but it seems, notwithstanding their dis- tinct names and presumable independence, that they are in fact but branches of the Pullman Company. Among the larger railroad companies operating a special car service on their own account (which, in short order, is also designated in America as Pullman service) we may enumerate the following : The Chicago, Milwaukee and St. Paul Railroad, with 10,994 kilometers. The Great Northern Railroad, with 9,474 kilometers. 344 The New York, New Haven and Hartford Railroad, with 3,278 kilometers. On the other hand, the Pullman Company, in 1904- 05, supplied the service and their own personnel for roads comprising a mileage of 296,293 kilometers. The following table illustrates the extraordinary de- velopment and growing popularity of the Pullman ser- vice in the United States within the last few years : 1901-2 1902-3 1903-4 1904-5 Ivength of road with Pullman operation Kilometers . . Passengers conveyed . . . Number of Passenger Kilometers 273,255 10,753,643 580,209,000 282,799 12,321,260 626,310,000 289,676 13,312,668 656,849,000 296,293 14,969.219 715,982,000 Note. — The fiscal year extends from the 1st of August to the 31st of July. Accordingly, the number of passengers who availed themselves of the Pullman service in some form or other has increased in the last three years (since 1901-02) by 4,215,576 persons — that is to say, by almost 40 per cent.; while the passenger kilometers increased by 135,773 kilo- meters, or a little more than 2^ per cent. Within the same space of time 23,038 kilometers, or more than 8 per cent., were added to the mileage already supplied with Pullman service. The Pullman Company claims to operate 2,400 cars of their own. The number of employees cannot be de- termined exactly, since the total number of employees seems to include also the workmen engaged at the Pull- man works in Chicago. Very likely out of a total employ- ment of 18,901 men for the year 1904-05, 7,000 were engaged in the operating department. The average of - 345 the individual yearly wage aggregated in 1904-05 about $600 to $650 (2,500 to 2,700 marks). The origin of the Pullman Company dates back to the year 1867. We are indebted to Dr. v. d. Leyen for a detailed description of its first beginnings. (Compare "Preussische Jahrbuecher," vol. 81, Berlin, 1895, page 32, etc.) Here we must confine ourselves to stating that the company owes its foundation principally to two causes. In the first place, it was the necessity for a better equip- ment of cars for long distances, and, secondly, the pos- sibility that these cars could run over the tracks of the different railroad companies — a possibility which could only be brought about through the creation of an enter- prise apart from the railroad companies. The attempts of some railroad administrations, such as the Southern Pacific, to conduct this service on their own account, have mostly miscarried. Little by little the railroad adminis- trations have, with few exceptions, sold their palace cars to the Pullman Company, placing it at the same time in charge of the service. The opinion prevails in America that an enterprise of this kind can be made profitable only in proportion as it extends over a vast railroad territory, since otherwise an economical exploitation of the rolling stock would be impossible. However, the general manager of the Great Northern Railroad did not concur in this view, claiming that his own service had been entirely satisfactory. He did not advance any figures in support of his argument, nor can such be found in "Poor's Manual." With reference to the contract agreements between the Pullman and the railroad companies we have not been able to learn more than that, according to the agree- 346 ment made with the Northern Pacific Railroad, the net profits of the Pullman Company on this line are shared evenly between this railroad and the Pullman Company, A paragraph in this contract stipulates that the railroad must attend to the cleaning, heating, etc., whereas the Pullman Company furnishes cars and crews. It may be supposed that similar agreements have been reached with all the other companies; however, it is likely that in the Eastern States, with their heavy traffic, this sharing of profits takes place on a basis more favorable to the Pull- man Company. Unfortunately we could not, either per- sonally or by writing, obtain any detailed information of the financial success of the Pullman Company — that is, of their railroad operating department ; nor do the annual railroad reports afford any insight into this subject. The only clues left were the records of the Pullman Company as far as they are ascertainable from the annual reports. These, however, show only the final accounts of both branches of the service — namely, the department of operation and that of the car building works. Com- bined in one figure, they show as total revenue the amount of 112,000,000 marks (1904-05). Deducting from this 57,762,000 marks for operating expenses, a dividend of 8 per cent., amounting to 24,627,000 marks, as well as a sum of 12,404,000 marks for depreciation, along with a few minor items, there remains a surplus of about 17,- 200,000 marks. Nothing could be learned respecting the significance and use of this surplus. This and the dividend aggregated, for 1904-05, 13.58 per cent, of the capital invested. The capital stock of the company represents a sum of 308,000,000 marks. It must be remembered, however, that the company was actually capitalized 347 (whether all this has been paid in is still doubtful) at only 150,000,000 marks, or $36,000,000. A reserve fund of over 125,000,000 marks had been gathered within twenty years. In 1899 this sum dwindled down to about 8,000,000 marks. Toward the end of 1898 the capital stock had been increased by more than 77,000,000 marks. It is evident that an item of 117,000,000 marks was handed over in some form to the shareholders; at all events, they received the new shares free of cost. Since 1898 a new reserve fund has been gathered which, by the end of the fiscal year 1903-04, again amounted to more than 75,000,000 marks. Although in 1900 the capital stock had again been increased by 81,000,000 marks, there were paid out, in dividends, in each of the past five years, over 24,000,000 marks (8 per cent.) on the increased capi- tal. The actual amount paid out to the shareholders will be found to have been a great deal more when one con- siders the gratuitous distribution of 77,000,000 marks in shares agreed upon in 1898. The profits shared in by the railroad administrations are, as we have stated, specified nowhere in the accounts of the Pullman Company; at any rate, it seems prepos- terous to consider as such an item of 2,327,194 marks, designated, in 1903-04, as "Proportion of net earnings of cars paid associated interests," since that item would be too small in proportion to the net earnings. Presum- ing, nevertheless, that the above diminutive sum repre- sents the profits of the railroad administrations, it would but prove that the contracts entered into with the Pull- man Company by the railroads were such as to yield to the latter excessively high returns. That the profits of the Pullman Company in its en- 348 tirety are derived in the main from the car operating serv- ice and not from the car constructing shops may be in- ferred from the fact that the sum of 81,000,000 marks, added to the capital in 1900, was used for the purchase of the much smaller Wagner Palace Car Company. Hence, it follows that of the actual capital stock of the Pullman Company considerably more than one-half must be charged to the Pullman car operating department. An approximate estimate may, perhaps, be obtained by tak- ing as a basis the number of passengers conveyed. Fig- uring $1 on each passenger — the average is probably higher — the income of the Pullman Transportation Com- pany (1904-05) will be found to foot up to $14,969,219, or 62,272,000 marks, with the total earnings amounting to 112,000,000 marks in round figures. Is this, perhaps, due to the fact that the board of directors of the Pullman Company is composed chiefly of such railroad magnates as Vanderbilt, Morgan, etc., and to the additional fact that the shares of the company are, as we were told, largely in the hands of high railroad officials? At any rate, it would be idle to presume that the railroads will acquire the so-called Pullman service to any great extent. We have it on good authority that one of the reasons why they do not favor such a project is that if they were to receive the Pullman excess fare directly this would emphasize the exorbitant rates charged still more than is the case under the double system. An identical state of affairs exists with reference to the ex- press companies. Moreover, if the railroads were to oper- ate the Pullman service, they would, as common carriers, be compelled to manage it under State and Interstate control. As the Pullman Company does not figure as a 349 common carrier by reason of its being an independent corporation, it is therefore now at liberty to fix the sched- ule of rates as it sees fit, and a public tariff is not re- quired. We did not succeed in discovering any system by which the excess fares are computed. The "Traveler's Railway Guide" and the official time-tables furnished us with the information contained in the following table, which gives an idea as regards the amount: Excess Fare for Pullman Cars. From To Upper Distance or lower Entire Section in Berth Kilometers Marks Marks 314 711 [ 8.50 17 787 871 1 10.50 21 923 973 U2.5O 25 1020 1075 fl5 30 1134 17 34 1468—1681 20.50 41 1495 23 46 1675 25 50 1716 27 54 2111 31.50 63 2245 33 50 67 2375 37.50 75 2483 39.50 79 2954 48 96 3757 58.50 117 4773 69 138 5225 80 160 Private Compartment Marks Kansas City Chicago . Chicago . St. Louis . Kansas City St. Louis . Omaha Kansas City Denver New York St. Louis . Chicago . Kansas City St. Louis . Chicago . St. Louis . Chicago . Omaha Chicago . Pittsburg . New York Omaha . . Minneapolis Kansas City Omaha . . Minneapolis Minneapolis Dead wood, S.D, Denver . . Ogden . . Chicago Dead wood, S.D. Denver . . Billings, Mont Billings, Mont. Billings, Mont Salt Lake City Salt Lake City San Francisco, San Francisco, San Francisco San Francisco 29 37.50 42 50 58.50 about 68.00 83.50 87.50 100 116.50 121 141 146 183.50 220.50 about 248 about 288 On trips lasting from three to four hours in the day- time we had to pay $1 extra. Sliding rates for the use of Pullman cars by day have not come to our knowl- edge. By day the Pullman cars accommodate twice as many persons as during the night, for the reason that each bed is made up of two seats. Accordingly, thirty- two seats are converted into sixteen beds. 350 EXPRESS AND TELEGRAPH COMPANIES. Express companies are a distinctly American crea- tion. Their business activity combines a number of busi- ness transactions which, with us, belong to a series of business enterprises managed separately and independ- ently from each other. Thus they handle the parcel trans- portation which with us is in the hands of the post-office ; they also maintain money changing, money order, letter of credit departments and transact other business of a financial nature. In small places, where a special com- pany could not succeed, they even take charge of the transportation of baggage from and to the stations. Their chief business consists, however, in the handling of express through freight of every description, a line of business which, in Germany, is restricted to the railroads exclusively. Barring small and insignificant lines, or such that serve a particular purpose, each railroad ad- ministration has entered into an agreement with one of the numerous express companies, the contract covering either the whole territory or at least part of it. Some- times, but only in isolated cases, a railroad company car- ries on of its own account the entire service of an express company. Apart from this, we counted as many as twenty-two large express companies, some of them doing business over an exceedingly large territory. The most important are the Adams, American, Pacific, Southern, United States and Wells Fargo express companies. Their field of action comprises a mileage of about 300,000 kilo- meters, and the total number of employees approximates 63,000 persons. So far as we could see, they are not conducted as stock companies. Unlike any of our commercial and indus- 351 trial companies, their methods of management are of a peculiar private character which makes it hard to get inside information of their business affairs. The capi- tal of the Adams Express Company, with a service ex- tending over 56,000 kilometers, represents at present stock quotations a sum of about 58,000,000 marks, divided into 120,000 shares. The capital of the American Express Company amounts to about 75,000,000 marks, and its business territory covers upward of 72,405 kilometers. The United States Express Company is capitalized at about 42,000,000 marks, with a sphere of action of 48,- 270 kilometers. Lastly, the Wells Fargo Express Com- pany works with a capital approximating 33,000,000 marks and its business extends over 77,232 kilometers. The United States Express Company declares, as a rule, a dividend of but 4 per cent., while the remaining companies just mentioned pay mostly 8 per cent. That this does not exhaust the annual profits is signally proven in the instance of the Adams Express Company. As by the laws of the State of New York, under which the company was incorporated, its shareholders are held per- sonally responsible in a certain sense, it declared, in 1898, a special dividend of 100 per cent., presumably to indem- nify them, beforehand, in case of contingencies. This reveals a similar state of affairs to that which exists with the Pullman Company. In either case many of the shares are held by the railroad companies or their leading offi- cials, who also elect the members of the board of direct- ors or fill these positions themselves. Vice versa, many of the leading men of the express companies may be found in the boards of directors of the railways. Thus, for in- stance, the President of the Adams Express Company sits 352 in the board of directors of the Iowa Central and of the MinneapoHs and St. Louis Railroad, while the American Express Company influences the administration of the Bos- ton and Maine Railroad, commensurate with the number of shares of the capital stock of the latter held by this com- pany. Although one should think that the character of the business relations in which the railroads and the express companies stand — or, better said, should stand to each other — should preclude, beforehand, any such close association, Americans do not see anything objectionable in it, nor in the fact that express companies hold shares of concerns competing with them. Thus it is an open secret that the Adams Express Company exercises a controlling influence over the South- ern Express Company, although both are competitors on the Southern roads. The President of the Adams Express Company is a director in the board of the United States Express Company, while, on the other hand, the board of directors of both the Adams and the American Express Company is, in part, composed of the same persons. The Harriman railway group controls, to some extent, the Pa- cific and the Wells Fargo express companies, while the Morgan railway combine rules, in part, the business of the Adams and the United States express companies. Similar relations could be traced successfully, but the statements already made prove how interwoven is the whole structure of finance. The real sufferers are, of course, the American people, as they have to pay for the transportation of parcels and package freight four times the usual railroad freight tariff rates, for this is, as a rule, the rate of the express companies. The contracts made between railroads and express 353 companies cover usually a term of fifteen years. The sum and substance of them is as follows : The railroad administrations refrain, on all of their passenger trains, from transporting express freight on their own account, excepting, of course, the baggage of travelers. They agree to give the express companies an opportunity to forward their freight in cars belonging to the railroad companies to all stops of the passenger trains. On less frequented routes the express companies must content themselves with a portion of the car. On the other hand, the railroad administration is in duty bound to run special trains for the conveyance of through ex- press freight between much contested points along the road whenever competition among the different express companies should warrant such a policy. However, if such trains should not pay the cost of maintenance as defined by contract the express company has to make good the difference. In case the size of the express freight should be such as to delay passenger traffic, special trains are run, as in Germany, during the night. This rule is being followed on the Pennsylvania Railroad between New York and Philadelphia. Contrary to the regulations of the German postal service, the express companies will unhesitatingly receive for transportation many articles which are not packed properly. For the sake of safety and convenience, how- ever, they pack, arranged by destinations, the smaller sized parcels in crates, boxes, baskets, etc. The empty receptacles used for packing goods, as well as the per- sonnel of the express company, are entitled to free trans- portation. Some companies have also stipulated free con- 354 veyance for watchmen hired to protect the express freight against thieves and robbers. The taking of such precau- tions is not surprising if one considers that cash money, gold bars, etc., are forwarded exclusively by the express companies. According to contract they are to be given their own quarters at the railway stations, in order to enable them to conduct their business properly. ,It seemed to us as if, apart from small stations, this stipulation was not often complied with. This, however, may meet with the sanction of both parties, inasmuch as in view of their un- paralleled growth the express companies could not — at least, not as regards the older depots — reasonably demand space fully adequate to the transaction of their large busi- ness. Wherever conditions require it, they build their own offices in the immediate vicinity of the stations. At junctions and terminals the different express companies doing business there combine occasionally for this purpose. The express companies are not charged anything for the use of the railroad telegraphs. American railroads, be it mentioned here, do not conduct a public telegraph service; the whole public telegraph service is controlled by large telegraph companies, chiefly the Western Union and the Postal Telegraph Company. With reference to the revenues the railroads derive from them we could not obtain much information. The annual report for the year 1904 of the Southern Pacific Railroad shows, under the heading "telegraph," an income of about 400,000 marks, and the Baltimore and Ohio Railroad received an annual lump sum of 250,000 marks. These figures indicate that the compensation paid by the telegraph companies for the use of the railway telegraphs is calculated according to 355 the track length, and it would, therefore, be an easy mat- ter to determine approximately the annual income derived by other railroad companies from this source. The express companies, furthermore, have the right to avail themselves, if necessary and possible, of the as- sistance of railway employees, a consideration to be given in return for such services. They are not entitled, how- ever, to sue the railroads for damages done to their em- ployees or goods. There is no mistaking the fact that the terms of these contracts resemble somewhat the regulations embodied in the German railroad postal law, with the difference that the express companies have to pay to the railways a considerable percentage of their net earnings. The amount of this compensation varies between 30 and 50 per cent. Enormous, indeed, are the revenues the rail- ways derive from this source alone. Thus the Pennsyl- vania Railroad (east and west of Pittsburg), with a mileage of about 17,500 kilometers, received from the Adams Express Company an amount approximating 13,- 900,000 marks; the Baltimore and Ohio Railroad, with 7,150 kilometers, got 5,000,000 marks from the United States Express Company; the New York Central and Hudson River Railroad, with 5,500 kilometers, 10,000,- 000 marks from the American, National and Adams ex- press companies ; the Illinois Central Railroad, with about 6,900 kilometers, 3,200,000 marks from the American Ex- press Company; the Union Pacific Railroad (including the Oregon lines), with 9,300 kilometers, 3,200,000 marks from the Pacific Express Company, and, lastly, the Southern Pacific Railroad, with about 14,800 kilometers, 6,000,000 marks from the Wells Fargo Express Company. 356 Furthermore, the express companies must transmit free of charge and on their own responsibility the entire service express freight of the road and the money remit- tances made by the service administration. In return the railroad administration grants, with a few exceptions, to its affiliated express company the exclusive right for the transportation of express freight on all its lines. Railroad and/ express companies assume the obliga- tion to support each other in every way, specifically in point of securing traffic and to suppress rival companies as much as possible. To this end the railroad will even be willing to agree to a reduction of the rate which will lessen its share, otherwise the express company is in duty bound to keep its charges at least one and a half times as high as the corresponding rates of the railway tariff. In this manner the railroad administrations retain transportation of part of the merchandise, increase their income and willingly leave the odium of high rates to the associated express company, the charges of which, as menti(fned, are, in fact, quite exorbitant. These express rates are based on the weight, and for lighter articles they are comparatively higher than for heavier ones. They are not legally fixed or subject to any governmental re- strictions, simply because the express companies are not, like the railroads, considered as common carriers. The companies display, even when controlled by the railways, an attitude of independence, and thus it happens that they are not amenable even to the authority of the Inter- state Commerce Commission. The latter cannot exercise its jurisdiction until it becomes obvious that the express company is a mere appendage to the railroad, a branch of its own general freight traffic. Otherwise the freight 357 rates of the express companies are limited in their up- ward course by competition alone and downwardly through the contracts with the railroad managements. The relations of the express companies to each other have been arranged so that at terminal stations the ex- press freight is taken in charge by the through routes or the terminal company; very frequently, however, the through trains are also equipped with a through express freight service. It must be acknowledged that in respect to regu- larity, speediness and punctuality the express service works satisfactorily, as far as this is compatible with the American railway operative system. With reference to indemnities for losses and other damage claims we have heard nothing derogatory. In one direction, to be sure, the whole system is deserving of sincere commendation, and this is the fact that the express companies have or- ganized an independent service for the transportation of merchandise to all such out of the way places as are re- moved from the great arteries of trade — i. e., the rail- roads. Consequently, it is not necessary to employ at ter- minal stations special forwarding agents. At many stations the express companies, moreover, take charge of the storing of the baggage carried by the passengers. 358 TENTH CHAPTER. Budget and Finance. I. Budget: Yearly Estimate. — Economic Control. — Separate Ac- counts for the Passenger and the Freight Traffic. — Purchase of Supplies and Control. 2. Finance : Financial Policy in Gen- eral. — Receipts and Expenditures. — Ratio. — Capital. — Interest and Dividends. — Surplus. It is in the nature of independent private industrial enterprises that, in general, a fixed budget cannot be made up for the ensuing year. The budget for the Ger- man governmental roads, for instance, contains detailed statements of the probable revenues and expenditures and of the financial policy for the ensuing year. By reason of the difference in the financial methods of both coun- tries, we are not justified to measure the economic man- agement of American railroads by the German standard. Besides, they lack mostly, even to-day, that stability which was aimed at by the earliest German private railroad enterprises. This stability has not been realized, even by the best American railroads. In the first place, the fluctua- tions in the receipts, resulting unexpectedly from alter- nate tides of activity and depression, are too variable, and, secondly, many sins of omission, dating from the time of the construction of the railroads and from the economic management of former years, have to be atoned for. 359 But even where the conditions have become more settled, we look in vain for what we understand by a regular budget, taking into account revenues and expen- ditures. The custom practiced in the United States, of publishing monthly reports of receipts and expenses, has nothing in common with such a system. These accounts are, if anything, the product of a retrospective survey, and as such they form the starting-point for speculative transactions, for which purpose they also seem to be prin- cipally intended. The oftener an insight into the revenues — and as they are published for short monthly periods the figures must, for various reasons, fluctuate consider- ably — is afforded to a limited circle, the more will specu- lation be stimulated by comparison with former periods or other enterprises, not to mention problems temporarily engaging the attention of the financial world. The prac- tice of making known the monthly expenses, along with the receipts, is not justified either, since outsiders are not enabled thereby to form a definite conclusion as to the future development of financial conditions within the fiscal year. This procedure is, on the contrary, rather apt to create the impression that monthly receipts and expenses are actually correlated. For that reason our private roads make known the revenues only. Although, as mentioned, the attempt is hardly made in America to estimate the revenues in advance, the prac- tice is followed, as we were told at a prominent railroad administration, of dividing the probable annual expenses of operation and management into twelve monthly parts, trying to keep them as much as possible on a par with those of the preceding year. To this end a certain appro- priation is made for each class of expenses. Apart from 360 taxes, interest, dividends and obligations of a similar kind, a division into four classes is quite generally observed, viz.: 1. Maintenance of vi^ay and structures. 2. Maintenance of equipment. 3. Conducting transportation, 4. General expenses. Whether this program, as the estimate is called, is carried out, depends solely on the revenues. Everything runs smoothly if they equal those of the corresponding month in the preceding year. Should the revenues exceed this norm, the companies have made precautions so that the resulting surplus does not appear too big. For this purpose extraordinary programs have been prepared, viz. : Steel rails, cross-ties, ballast, bridges, structures (sta- tion shops and other buildings), telegraph repairs and renewals, locomotives, passenger cars, freight cars. For all these items smaller or larger sums are appro- priated according to circumstances, but without regard to actual needs, in the monthly financial report. This is balanced, if necessary, in the following months by more economic appropriations. Inasmuch as in this way certain amounts are made available for extraordinary expenditures but few objec- tions can be raised, provided we relinquish, for the time being, our German notions and adopt in their stead the freer American ideas. The whole process, however, is at fault as soon as the receipts fall behind the ordinary expenses during and beyond the fiscal year. To counter- balance this the management at first cuts down expenses. But as this plan has its limitations, even if resorted to by 361 smaller companies with little trafific, the endeavor to im- press the public with the solidity of the financial condi- tion will lead to representations which are at variance with the actual state of affairs. A misrepresentation of this kind is sometimes intended without cogent reasons of this nature, and it is then merely the expression of a special financial policy. The latter is, as a rule, a ques- tion of dividends. As at one time shares could frequently be obtained practically for nothing, it is probable that originally the financial leaders of the companies did not show too much consideration for the shareholders in the matter of dis- tributing dividends. At present greater consideration is shown the stockholder. It is strange, however, that one important railway system has never yet paid a dividend, although its financial standing would apparently have justified such a course for years past. In so far as by such a policy financial sanitation is achieved through im- proving the superstructure, increasing the rolling stock, etc., no serious objections could be rightfully raised against it. Unfortunately, however, the management of American railroads does not warrant such presumption in all cases and without further investigation. The financial conditions, and these are here upper- most, are under all circumstances materially affected thereby. If there happens to be too much ready cash, extravagance may be the result ; in the opposite case, the considerations due to proper operation of the service may sometimes be lost sight of. A lack of stability makes it- self felt in the economic methods such as cannot fail to be detrimental to the sound and steady development of the undertaking. We were told that in years gone by even the best managed railroads lived but from hand to mouth. With sufficient cash on hand comparatively much was spent, say, on maintenance of way and structures ; in the oppo- site case practically nothing was done, with the result that the safety of the service was sorely neglected. It seems to us that most railroads have fortunately suc- ceeded in passing beyond that stage — at any rate, those lines which we inspected ourselves. The administra- tions have changed for the better for a number of years, yet few companies at best have arrived at the point where they regard the requirements of operative safety as the paramount aim under all circumstances. Very aggravating for an orderly, economic manage- ment is the fact that the policy pursued by the companies is not always limited to a particular system, but has to consider other interests; the great combinations, which replace in the railroad world the trusts, are also factors of importance. The single road, although seemingly inde- pendent from the economic point of view, is to the finan- cial heads of the entire group merely a component part of the whole, the latter furnishing the standard by which the units are to be measured, and this often without good reasons. This also constitutes the danger which attends the gigantic formations of the last years — a danger that will not be visible as long as matters progress smoothly, but that will become formidable as soon as the separate interests of the units composing the whole system begin to clash. To this category belongs, for instance, the charging to the component companies all the expenses of the supreme management and of the central adminis- trations which is done in a rather arbitrary manner. ECONOMIC CONTROL. Although the yearly budget of the American rail- ways is not as yet as developed and of lesser influence on the management of the business than with us, there is not lacking, on the other hand, a strict supervision or economic control — at least, on those lines which we were in position to inspect. On this thorough economic con- trol, which is effected once a month, and on the fact that only men worthy of confidence and experience are placed in responsible positions in the operation, traffic, mainte- nance and construction departments, the American rail- road administrations place in the main their reliance as far as the estimates for the future are concerned. The statistics of monthly expenses — as we should like to call the American economic control — are very thor- ough. They are divided — whether this practice prevails with all railroads we were unable to learn — not only into the previously mentioned four main classifications, but these are again subdivided into more than fifty subdivi- sions. The classification of expenditures for construc- tion and rolling stock maintenance resembles the old Ger- man normal accounting formula discarded long ago as worthless. The monthly records are compiled by the superintendents for their districts, to be completed and ad- justed later on by officials of the central management. Then extensive proportional calculations are made and compared with the figures of the corresponding month in the preceding year and the differences are thoroughly explained. That this causes cumbersome calculating and clerical labor goes without question; it is incomparably more extensive than with us, but as long as a proper 364 budget is lacking, this work, even by avoiding what is really superfluous, can hardly ever be reduced to the standard which we have adopted and found sufficient. Frequently the conclusions drawn from the monthly reports are discussed by a council composed of district and division superintendents with some higher official, usually the financial vice-president or the president him- self, acting as chairman. These discussions appear to take, with the railroads of the United States, the place of the budget proper. The system is certainly not devoid of its redeeming features and deserves our full considera- tion; it guarantees the adjustment or adaptation of the economic management to the existing conditions of com- merce and traffic, but it implies also the great danger of excessive concentration of power in the central offices, a power which will sometimes assert itself, according to cir- cumstances, by a brutal execution of the decisions resolved upon, such as a wholesale discharge of workingmen, reductions in wages, etc. If the managing staff were in a position to work conformably to a prearranged plan they could beforehand arrange their business policy accord- ingly. With the available resources evenly distributed much more could be achieved in the way of the mainte- nance of structures and equipments than by spasmodic activity or its temporary cessation. This latter result is of frequent occurrence, much to the disappointment of district officials. SEPARATE ACCOUNTING. Here we must not omit calling attention to a special kind of statistical work. This is the separation of expense accounting for the passenger and for the freight traffic. 365 We have most thoroughly examined the question as to what extent the American railroads employ and utilize such a division of expenses. The statistical department of the Interstate Commerce Commission in Washington as well as the railway administrations have most cheer- fully furnished us with the necessary information. In the first years of its existence the Interstate Commerce Com- mission requested the railroads to furnish the data which appeared necessary for such a separation of the expenses. It has, moreover, endeavored to introduce uniform prin- ciples for such a division by providing, principally in relation to the apportionment of the expenses of the general administration, ordinarily applicable percentage ratios which, of course, had to be arbitrary. Yet in spite of all these efforts the differences between the railroads, even among those whose trafific conditions were ostensibly quite similar, were so great as to suggest, as a cause for this discrepancy, a difference in the treatment of the otherwise inseparable expenses. To forestall wrong con- clusions the commission abandoned separation in 1893. It has discontinued ever since the practice of asking for separated statements, simply because it considers them as useless. On the other hand, we found that the Pennsylvania and the Southern Pacific continue separating the expenses for passenger and freight traffic in the statistical records made for their own information, and that the Pennsyl- vania also incorporates these statistics in its annual report. In the monthly reports of these administrations, com- piled by the superintendents from the accounts of their districts, the expenses for passenger and freight traffic are strictly separated. In all this there is much guesswork, 366 even in the smallest districts. Thus the salaries and wages for officials and workmen that are engaged in both the passenger and freight traffic are roughly divided accordingly to an assumed ratio; other small items (soap, light, etc.) are also arbitrarily charged to the two kinds of traffic, and frequently, as we ascertained in one instance, comparisons with the preceding year are resorted to. The guiding principle in all this is that the discrep- ancies with the preceding year must not be too great. This protects against censure and that is the principal thing. Whether the statistical data thus furnished comply with actual conditions or not is considered more or less im^naterial. The superintendent, having collected this unreliable material, proceeds, on his part also, largely by conjectures, to a division of the expenses which must be recorded for the entire district. He has tables prepared, showing the relative number of locomotives employed in either passenger or freight traffic and on this basis he dis- tributes fuel and wages. He allots the general expendi- tures of his district according to the number of trains used in passenger or freight traffic. Many superintendents are unanimous in declaring that this system of the separation of expenses is of little value, but that it is certain to cause them a great amount of calculating and clerical labor. To these reports are added, at the central office, the expenses connected with the maintenance of structures, telegraph and transportation. Here again the number of trains serves as a basis for the distribution of appro- priations to be made for the maintenance of structures and telegraphs. An estimate of the cost of maintenance for locomotives and cars is made at the workshops and 367 these costs are then distributed, with proportional addi- tions for general expenditures, between both kinds of traf- fic, according to the use of the means of transporta- tion. To this are added finally the expenses of the cen- tral administration, divided in proportion to the two sums already determined. The value of statistics involving such an enormous amount of work does not appear to consist in furnishing a key as to the relative profits to be derived from either of the two kinds of traffic; they are utilized rather to find out whether the single lines of the system, with proportionally the same passenger and freight traffic, also cause, on the whole, an equal amount of expenditure ; whether they are useful in this sense must be doubted; in any case, they do not make it superfluous to ascertain local conditions for the purpose of an economical administration. The opinion of German railroad men, and also always stoutly maintained by them, is thus fully confirmed. They insist that such statistics cause extraordinary labor and expense, but are in spite of all the pains and the time devoted to them absolutely useless for a proper supervision of the eco- nomic management, or for a correct computation of the cost of the passenger and the freight traffic, or for the establishment of a schedule for fares and freight rates. BUILDING ESTIMATES. For extensive buildings of all kinds the American railroads have, as we, special estimates prepared. Con- cerning the limits of the appropriations, within which the superintendents may exercise discretionary authority, we could not obtain any information. The lines seem to be drawn quite close, even if the officials are accorded such 368 privileges at all. The final passing of an appropriation is attended by more red tape than is customary in Ger- many. The decision on estimates of importance rests with the respective vice-president or the president him- self, a discussion in the board of directors or the com- mittee appointed for this purpose frequently preceding it. Models and norms to fit every imaginable kind of structure appear to be in use to a considerable extent. At all events, v\^e wert shown a large assortment of such plans. The general propensity of Americans toward the standard system is here also manifested, much to the bene- fit of the administration in economic respects. Whether there exist, on the other hand, well-estab- lished principles concerning the percentage of current earnings to be set aside and spent on appropriations for buildings and the replacing of worn-out equipment we were not in a position to find out. Independent reserve funds, such as must be created by our private railroad companies, in compliance with statutory enactments, for purposes of new equipment, repairs and replacements, are unknown to the railroads in the United States. Not infrequently, however, there are enumerated in the busi- ness reports sums derived from transportation earnings which are put aside for improvements and betterments. To be sure, we received the impression that the well- managed American railroads do not exclusively think of the present alone. The question of the number of men to be employed, one of the most important of an economic management, is determined on the basis of the financial summaries published monthly, while the supervision of supplies is specially regulated. 369 PURCHASE AND CONTROL OF SUPPLIES. It has been pointed out before that the purchase of supplies lies, unless restricted to the president, in the hand of a purchasing agent, who is, as a rule, subordinate to the general manager and a member of the central admin- istration. We could not detect any well-established principle to be observed in the fixing of prices and the obtaining of the lowest bids. The same holds good as regards the sale of junk. A limited number of sellers and buyers partici- pate in transactions of this kind. In America a staple market price is charged for a much greater number of articles than is the case in Germany. This is explained by the American manufacturing methods, which consist, in the main, in production on a large scale. In this the advantages accruing from taking advantage of a favor- able market play a nutch greater role than the price reduc- tions resulting from competition. It can generally be assumed that such articles as coal, rails, ties, iron, hardware, copper, etc., have a staple market price. The president himself, as a rule, places orders for these articles, as well as for locomotives and cars. He is, however, subject to certain restrictions; that is to say, decision in these matters is sometimes left to the board of directors or to the respective committee appointed by them. Legal restrictions, such as are im- posed in Germany by the yearly budget and the laws gov- erning credit, do not exist, neither in regard to time nor quantity. The part which the purchasing agent plays in these transactions depends, as has been explained before, on his standing in the company, and on the president. It is 370 everywhere a strict rule that the purchasing agent must not buy or sell anything without previous orders issued either by the department or the general manager. These orders are mostly in writing, while written contracts with the supply firms are exceedingly rare, since everything necessary is specified in the correspondence. In closing contracts for articles which he is authorized to purchase on his own responsibility the purchasing agent is, as a rule, limited to a period of two, at the most three, months. In case he has, on account of the amount of the pur- chases, to secure the sanction of the general manager or some official higher up, the time restriction will be waived in most cases. The limit of the amount is $10,000 with the Pennsylvania Railroad (east of Pittsburg). At any rate, it is not customary to make contracts for a long period, unless considerable profits can be assured, because it is the policy to carry as few obligations and as little stock as possible. An exception to this rule was made by the Baltimore and Ohio Railroad. By taking advantage of a favorable market this company had closed contracts for the delivery of rails extending over several years. The supervision of the stock and the distribution of the supply is managed in various ways; just as variable is the strictness of the control. The Pennsylvania Rail- road (east of Pittsburg) appears to be the most exact- ing in this respect, because it has centralized this entire service branch, viz., the purchase, use, accounting and supervising of supplies, in the main offices in Philadelphia — i. e., in the bureau of the controller. It is apparent, however, that there the control is guided less by actual conditions than by statistics and precedent. Whether such methods are beneficial to the company is altogether debatable. At all events, the unproportionally large staff of officials employed by this bureau cannot fail to em- phasize the fact that such centralization is both extremely expensive and uncalled for. Besides the central store connected with the main offices there are at the stations of the district superin- tendents warehouses in charge of storekeepers, whose duty it is to distribute the supplies according to the requisitions made by the officials needing them. Strict accounts are kept in the bureau of the superintendent. All printed matter and stationery, however, seems to be distributed from the central store, which is managed by a stationery storekeeper. Nowhere did we find anything worth imitating; we were rather convinced of the supe- riority of our own methods, particularly so, since the Ger- man railway administrations have adopted the practice of ordering wholesale — from a central office, at least — coal, rails and rolling stock. Special officials are detailed in America for the deliv- ery of coal, rails and rolling stock; for the other supplies the storekeeper or the purchasing agent is responsible. Every superintendent is responsible for his district that the supplies are properly stored and that the manager keeps a strict account and does not charge more than has been actually used. In spite of repeated efforts made by several adminis- trations, we could not discover any service rules regulat- ing this matter. We were told that such rules do not exist. If that is so, it proves a lamentable difficiency. The purchasing agent gets the monthly accoimts, so that he is able to check the deliveries on the basis of the single orders. Then they are sent to the bureau of the 372 controller, to be used in the compilation of the monthly financial reports. That the manufacturing centres, located within the territory of the administration, are patronized only in so far as it is profitable may be taken for granted. Fre- quently, by the way, the administrations are interested in local industries, either directly or indirectly. They often obtain their coal supply from their own mines; in a few cases they build their own cars and locomotives — as, for instance, the Pennsylvania Railroad at Altoona. As a peculiarity we mention that the contract for furnishing lubricating oil is given to the Galena Signal Oil Company, on the basis of a certain maximum con- sumption for each one thousand axle kilometers. Not- withstanding the better quality of the oil and the higher price charged by this concern to the railroads, the cost is said to be lower than would be the case with the lubri- cant otherwise usually used. The oil company, however, agrees not to make any extra charges if, on account of inexperienced employees, more oil has been used than was contracted for. We were told that the company con- templates introducing their system in Germany. Nearly all American railroads have made contracts with the company, the terms of which are entirely satisfactory to all concerned. The prices are, for one gallon f . o. b. Chicago : Machine oil 28 cents Best valve lubricating oil 48 cents Lubricating oil for passenger and freight cars. . 18 cents Signal and lantern illuminating oil 34 cents Headlight illuminating oil 6% cents The following summary shows the average prices 373 paid, in 1897, 1900 and 1904, by one of the larger Ameri- can railroads for the principal supplies and equipments: Supplies and Equipments Prices in E 1897 1900 0.0130 0.0300 0.0130 0.0335 0.08 0.10 0.085 0.14 O.ll 0.1975 0.01 0.013 1.65 3.00 0.0165 0.0338 4.48 11.30 0.0195 0.0325 0.56 0.135 15.00 17.10 3.50 7.00 1.65 2.10 2.95 6.35 1.25 2.00 3.00 4.00 1.85 2.15 0.80 1.15 1.25 1.60 4.05 5.10 0.20 0.34 3.50 5.60 0.13 0.1775 6.00 8.35 1.85 3.50 0.11 0.31 1.00 1.95 1.65 3.45 3.25 5.50 3.40 4.90 7.50 13.50 1.15 3.40 4.65 10.35 8.50 10.75 4.75 11.00 6.00 9.50 35.00 31.00 38.00 33.00 41.00 68.00 0.10 o.m 0.65 0.81 J 1.88 I 1.13 18.00 35.00 3.35 3.40 0.0535 0.1525 1904 Unity Axles, steel Angle bars, track fastenings . . Antimony Brass Car Journal Engine Brake shoes Brooms (straw) Bolsters-I-beam-structural-steel Bolts Machine (1 X 10 example).. Track Carriage (i X 3 example) Brushes, paint Bunting Buckets, galvanized iron water Chain, wrought, brake Castings Gray Iron Malleable iron Cement, Portland Coal Steam Blacksmith Anthracite Cross-ties Coke Copper Couplers, automatic car Duster, feather Flues, boiler Iron, bar , . . . Iron and steel, sheet Lanterns hand Lead, pig Lumber Nails Oils Car, lubricating Mineral seal, illuminating. . . Engine, lubricating Headlight, illuminating Valve, lubricating Signal, illuminating Linseed, paint Gasoline Paint, building and freight car Plush Rails, steel Rivets, boiler ',[[[ Rope, manila '. 0.125—0.0210 0.0115 0.5975 0.1045 0.1085 0.0103 3.15 0.0140 6.08 0.019 0.61 1.35-18.00 3.00 1.75 3.80 1.08 3.20 0.65 0.97 1.25 4.85 0.45 1.90 0.136 6.60—11.75 3.75 0.18—0.16 1.225 1.40 5.50—6.50 4.28 19.35 1.60 30.00 7.75 30.00 9.15 50.00 36.00 35.00—36.00 0.12—0.17 0.75 building 0.40 freight car 1.40—1.625 38.00 1.70 0.1075 Pound do. do. do. do do. Dozen Pound Hundred Pound Hundred Dozen Roll Dozen Hundred do. do. Barrel Ton do. do. Each Ton Pound Each Dozen Foot 100 lbs. do. Dozen 100 lbs. 1,000 feet 100 lbs. 100 galls. do. do. do. do. do. do. Gallon do. Yards Ton 100 lbs. Pound 374 Supplies and Equipments 1897 Prices in Dollars I 1900 I 1904 Unity Steel Spring Tool Spikes, track Springs, car Solder Shovels Switches Frogs Switch stands Tires Locomotive driving wheel . . Coach wheel Tin Block Sheet Turpentine Wheels Cast iron Steel tired 0.03 0.05 1.34 3.65 9.50 5.35 30.30 13.85 9.90 4.50 36.50 14.00 6.50 0.38 5.00 84.00 0.045 0.075 3.44 3.00 19.00 8.88 31.35 34.80 14.05 5.50 33.00 30.50 10.50 0.49 5.35 55.00 0.0155 0.0575 1.45 1.60—3.45 15.00 5.00 39.00 33.80 7.35 3.50 8.50 37.45 6.00—13.00 0.5485 5.40 40.00 do. do. 100 lbs. do. do. Dozen Each do. do. 100 lbs. Each 100 lbs. Dozen Gallon Each do. Whether these standard prices are paid by other American railroads is not known. It seems certain, how- ever, that the differences will be but trifling, as far as the Eastern railroads are concerned. A comparison with the conditions in Germany shows a remarkable difference in the prices paid for coal. While the better quality (Blacksmith) costs only $1.25 (or 5.20 marks) per ton, the Prussian-Hessian railroads had to pay more than 1 1 marks per ton, so that with a consumption of 5,400,000 tons a year we have to pay about thirty-one and one- third million marks more. Concerning the prices for rails the difference is but small. As regards the quantity of the supplies used in the various departments of operation, and especially as regards the proportional figures, statistical data were not obtainable. FINANCIAL MANAGEMENT. To get a clear idea of the financial results obtained 375 at present by the railroads in the United States, it will be necessary to review briefly the development of Ameri- can railway systems in general and of their financial methods in particular. The gradual growth of the Ameri- can railroad net is made plain by the following tables, as based on the English periodical, The Statist, vol. 55, No. 141 1, March 11, 1905: kilo- Increase Increase V. 0°--" Year meters 1 Population ^isfl km. percent. per capita per. 1830 37 _ _ 12,866,000 0.003 1840 4,534 — 4,497 -1- 12,154 17,069,000 _ - 4,203,000 _ U33 0.26 1850 14,515 - 9,981 __ 220 23,192,000 - - 6,123,000 + 36 0.63 1860 49,277 — 34,762 __ 289 81,448,000 -1- 8,251,000 + 36 1.6 1870 85,151 — 35,874 -- 78 88,558,000 - - 7,115,000 - h23 2.2 1880 150,059 - 64,908 -_ 76 50,156,000 - u 11,598,000 _ 1- 30 3.0 1890 268,146 --118,087 -- 79 62,632,000 - u 12,466,000 - - 25 4.3 1900 312,688 -- 44,537 17 76,414,000 - - 13,792,000 - - 22 4.1 1903 334,324 -1- 21,641 -- 7 80,487,000 - - 4,073,000 - h 5 4.2 Average Per Year. Year Increase in Mileage Per. Increase in Popu. Per. 1831—1840 450 1215.4 22 23.9 7.8 7.6 7.9 1.7 2.3 420 300 3 3 1841—1850 998 612 300 3 6 1851—1860 3 476 825 100 3 6 1861—1870 3 587 711 500 2 3 1871-1880 1881—1890 6,491 11 809 1,159,800 1,245,600 1,379,200 1,367,700 3.0 2 5 1891—1900 4 454 9 2 1901—1903 7,214 1.7 Accordingly, the ratio is at present in the United States 4.2 kilometers to every thousand of the popula- tion, while the average railroad net for every 100 square kilometers is also 4.2 kilometers. In the German Empire there are 0.95 kilometers to every thousand of the popu- lation and 9.9 kilometers to each 100 square kilometers. Thus, in proportion to the population, the United States have a great many more railroads than Germany, a fact 376 that may readily be accounted for by the lesser density of the population, particularly in the North and West of the United States. Leaving out of consideration the first decades of rail- road operation, the development of American railroads shows, from i860 to 1870, in comparison to the popula- tion, a steady but not surprising growth. While the increase is remarkable in the following decade, it is still more enormous from 1880 to 1890. In this decade there were constructed annually, on an average, 11,809 kilo- meters of new lines, and it is even claimed that in some years within this period there were added upward of 15,000 kilometers. During the last decade of the last century the development was somewhat slower. While the first three years of the present century were char- acterized by a more lively extension of the lines, it falls a great deal below that which took place in the middle of the eighties. The unwarranted haste with which new lines were constructed in past periods proved to be highly detri- mental to the financial development of American railways. Frequently the building had nothing to do with the pro- moting of traffic. Thus many competitive lines sprang into existence with the avowed purpose of injuring already existing companies, mostly with the idea to com- pel them to buy out the intruder. Moreover, equipment and construction were often so inadequate as to pre- clude the possibility of a systematic and economic opera- tion. How could those who, under such circumstances, had invested their money in enterprises of this kind, ex- pect any success — at least, in an honest way ? To obtain the money needed for the payment of dividends the neces- 377 sary running expenses, as far as they had to be met from the regular receipts, were frequently understated. At the same time, new capital was used to meet the expenses incurred, mainly for the maintenance of the existing sys- tem ; in other words, the indebtedness was increased with- out producing new values that might become profitable in due course. Such a policy, if pursued for any length of time, must lead to ruin, and a large number of railroad enterprises in the United States have actually met with this fate. In 1894 there were in the hands of receivers 192 administrations, with lines comprising a mileage of 40,- 819 miles (or 65,678 kilometers) and a total capital aggregating about 10,400,000,000 marks. They were bankrupt. What enormous values must have been wasted before this result came about! For, be it remembered, that vast sum represents one and a half times as much as the total capital invested in all the Prussian-Hessian State railroads. That additional amounts were wasted through receiverships is obvious to all who are acquainted with the methods in America. The crisis of 1893, which was disastrous to many railway companies, not to speak of the investors, has had a chastening effect. This may be inferred unequivocally from the yearly reports of the Interstate Commerce Com- mission. A great change to the better has, indeed, taken place in the years subsequent to the crisis. In view of the healthy progress of the last ten years there are good grounds for believing that soon the last railroad will be taken out of the hands of the receiver, provided, of course, a new crisis does not arrive. The following table seems to encourage these hopes : 378 CI) CO (U ■*-* "a to •13 cd O A (U '53 u §2 is "3 m to c4 ^ O Q t "o Q la o Q o a, o Q to to" «0 OB O O lo « (M m e» 00 » ffj WD O tH CO ■* OO to 00 lO tH iO 1-^ to -^ 0> lO ^ tH t- US to tH ■i* lO lO CO o i-( o lO o KS ■ CO f- o (« f- 0!) «3 tH lO C5 1^ co CO nr> o CO t- <3 tH 1-H o o O OS OS tH CO c* CO CO tH s? c» 00 i-H oo iO « T-( Wl eo 04 tH CI (N T^ §•■2 !2 cti I— t "o Q o cu « 3X1 'S-'g O cil OS 1-1 t- JO asBajoni pa;moddv jaAiaos-g jaAiaoa-jj Xq paSjBqosiQ -a ^ § o zi a >< CO 00 ICl h- r* lO iO f'* on o» CD o CO CO T-( OS !N o ■cH O 00 OS fT> T-l - 000, or nearly eight billion marks; the expenditures, $1,- 257,539,000, or five and one-quarter billion marks ; hence, the income from operating amounted to $643,308,000 — i. e., two and two-thirds billion marks. These figures do not include, on the one hand, the revenues accruing to the railroads from other sources (mines, etc.), amount- ing to $49,896,729, or 208,000,000 marks, and on the other, taxes amounting to $57,849,569, nor the interest payments of every description and dividends, and, finally, certain reserve funds for adjustments and improvements. These stupendous figures show of what enormous importance the railways are in the life of the American nation. A most reassuring symptom is afforded in the receipts, which have been steadily increasing for a num- ber of years, as have consequently also, but to a lesser degree, the expenses. The earnings and expenses per mile of all the railroads of the United States have been as follows: Year Operative Operative Profit Year Operative Operative Profit Earnings Expenses Earnings Expenses 1892-3 |7,190 $4,876 |2,314 1898-9 $7,005 $4,570 $2,435 1893-1 6,109 4,163 1,940 1899-1900 7,722 4,993 2,729 1894-5 6,050 4,083 1,967 1900-1 8,123 5,269 2,854 1895-6 6,320 4,248 2,072 1901-2 8,625 5,577 3,048 1896-7 6,122 4,106 2,016 1902-3 9,258 6,125 3,133 1897-8 6,755 4,430 2,325 A careful examination of all these tables cannot fail to reveal a certain steadiness in the financial man- 380 agement — that is, if the railroads are taken collectively; it would be very fortunate if this steadiness could be extended to all the single systems, so that in time there would not exist dividendless investments in the United States — that is, as far as the railroads are concerned. The following statistical data will be useful in form- ing an estimate of the revenues and expenditures. Group 2 refers here to the railroads in the States of New York, New Jersey, Pennsylvania, Delaware, Maryland and part of West Virginia. This group comprises not only the most frequented but also the oldest railroads in the United States — lines that may well be compared with the Ger- man railways, both in regard to earnings and expenses. The average per road kilometer was: 1902-3 Revenues . . Expenditures Surplus Railroads of the United States As a whole 1902-3 23,936 Marks 15,836 " 8,100 Marks Group II. 1902-3 50,771 Marks 33,544 " 17,227 Marks Prussian-Hessian Railroads 1902-3 44,026 Marks 27,006 " 17,020 Marks 1903-4 46,066 Marks 27,524 " 18,542 Marks From this it follows that the American railroads which are included in Group 2 show much higher reve- nues than the German, but that these are largely offset again by the larger expenses. Moreover, the surplus of the Prussian-Hessian railroads in 1903-04 exceeds that of the American lines. Similar results will be reached by comparing reve- nues, expenditures and income on the basis of mileage. 381 The average per track kilometer was in 1902-03: Revenues . . Expenditures Surplus . Railroads of the United States As a whole Group II. 17,316 Marks 11,455 " 5,861 Marks 26,808 Marks 17,712 " 8,096 Marks Prussian-Hessian Railroads 22,400 Marks 13,740 8,660 Marks Thus, also, in reference to mileage, the railroads included in Group 2, which are best fitted for comparison, show, by reason of their greater expenses, a much smaller surplus than the German. Basing our comparison on train kilometers, the results are somewhat more favorable to the United States. (The custom in Germany to base calculations of receipts and expenditures on the units of the car axle per- formance is not practicable in the United States, as the sum total of the axle miles is not known there.) The average per one thousand passenger and freight train kilometers was in 1902-03: Railroads of the United States As a whole Group II. Prussian-Hessian Railroads Revenues . . Expenditures Surplus 5,165 Marks 3,417 " 5,477 Marks 3,619 " 4,250 Marks 2,607 1,748 Marks 1,858 Marks 1,643 Marks The latter summary shows that American railroads yield higher revenues for the same train action than the German. As a matter of fact, the revenues derived in America from the passenger traffic, in 1902-03, were 4.65 times — those from the freight traffic, 6.44 times — 382 larger than those of the Prussian-Hessian railroads, and this although the number of passenger train kilometers was but 3.58 times — that of freight train kilometers but 5.80 times — larger than in Germany. To be sure, the expenses for a train kilometer were, on the railroads of the United States, higher than with us; yet, in spite of this, they yielded, on account of the much higher reve- nues, a larger income on each one thousand train kilo- meters. Since, according to the statements made in the eighth chapter, the Prussian-Hessian railroads receive, all in all, less for the passenger and freight ton-kilo- meter than the railroads in the United States, the last of the three quoted summaries seems to prove that the Prus- sian-Hessian State lines pay for the proper operation of their railroad service in proportion at least as much as the American private roads, in spite of their higher reve- nues. The best way of comparing is by means of the so- called betriebskoeffizient (known in America as "ratio") ; that is to say, the comparative proportion of operation expenses to operation earnings. But this system has also its faults, indeed, as is well known, principally because the methods employed in compiling the statistical reports of revenues and expenditures are not uniform through- out. As this is the case with the comparisons, based on much more reliable figures, of the results of the railroads belonging to the union of German railroads, it must be still more at fault in America. However, these defects are not so pronounced as to entirely vititate the value of the ratio by comparison. At any rate, a comparison may be undertaken the more readily, since surely the differences will not be prejudicial 383 to the American railroads. On the contrary, it may be assumed that among the expenses of the Prussian-Hes- sian State railroads there are enumerated items that are omitted in the American expenses, such as sums to be spent for the increase of the means of operation and for a number of additions to the plant. It cannot be assumed that all American railroads observe the principle that expenditures for the proper maintenance of structures and equipments which do not involve improvements enhancing the permanent value should, under all circumstances, be paid out of the current revenues. That the American roads do not, in this respect, depend on the current reve- nues as much as the German seems to be borne out by the steady increase of the invested capital. The following data will give information on the ratio of the past three years. The percentage operating expenses of the operating earnings have been : For the Year Railroads of the United States As a whole Group II. Prussian-Hessian Railroads 1900-1 1901-2 1902-3 64.86 % 64.66 % 66.16 % 61.91 % 64.98 % 66.07 % 59.48 % 61.75 % 61.34 % According to these data, the railroads in the United States — collectively as well as those of the more densely populated districts — have been obliged to draw on the current revenues for the purpose of meeting expenses to a much higher degree than the Prussian-Hessian State roads. Some lines of the North and Northwest may have managed to get along with a ratio below the quoted average. This may perhaps be owing to the fact that 384 they did not charge appropriations for betterments as cur- rent expenses, but included them in the surplus, with a view of using them later on for the same purpose. Such a setting aside of appropriations for permanent improve- ments appears to be the rule with the railroads in the United States; it will often be found in the annual bal- ance sheets of the individual administrations, as well as in the main report of the Interstate Commerce Com- mission. Unfortunately, no details are given with ref- erence to special uses. It may, however, be presumed that the amounts reserved for permanent improvements are to be included largely among the operating expenses, and that, therefore, the ratio of these companies has been understated. The more important improvements of the plant appear, as has been remarked before, to be but seldom effected from the current revenues. The older railroads of the Eastern States are best suited for a comparison with ours. The ratio of the Penn- sylvania Railroad (east of Pittsburg) has, since 1892-93, in which year it amounted to 70.39 per cent., never fallen below 64 per cent. In 1900-01 it was 64.40 per cent. ; since then it has steadily increased and amounted in 1902-03 to 69.24 per cent. A still greater increase is shown west of Pittsburg, where it amounted to 60.20 per cent, in 1896-97, and 70.96 per cent, in 1902-03. In 1903-04 it dropped to 68.17 per cent. The fluctuations in the ratio are still more considerable with the Baltimore and Ohio Railroad, for here it was 69.15 per cent, in 1893-94, 76.70 per cent, in 1898-99 and 65.63 per cent, in 1899- 1900. In this year the company was financially reorganized. Its ratio has since then remained pretty steady with a mod- erately increasing tendency and amounted to 67.05 per 383 cent, in 1903-04. It must be remembered that these data do not include taxes, so that the ratio was actually still higher. All these figures exceed greatly the relative expenditure in proportion to the German railroads; they indicate, in particular, a certain lack of stability in the economic management. The question might be raised whether American rail- roads are, after all, not managed more economically than the German. In support of such a view it might also be claimed that the financial advantages are not so con- spicuous, solely because American companies pay much higher wages to their employees. In fact, it might be asserted that with equal wages the ratio of American rail- roads would be considerably lower than ours. From what has come to our knowledge we can say that such asser- tions are, indeed, frequently made. However, we do not share in this opinion. In the fifth chapter it has been proven by way of statistics that the average remuneration of American rail- road employees is higher than that of the German per- sonnel, although by no means to such an extent as is commonly believed. It is correct that, if the American companies paid the same average wages as our railroads, they could have saved in 1902-03 an amount footing up to $320,000,000. With such a saving the ratio would, of course, have been influenced most favorably. Making all due allowance for this in favor of the United States, one must not forget, on the other hand, to take into account the burdens of the German roads which are not imposed, or at least not to the same extent, on the American railroads. In the first place, we must consider the guarding of the tracks. If the American 386 railroads were to introduce the safety precautions which have to be observed on all German lines they would have to engage an army of about 636,000 switchmen and guards, instead of 49,961 men, as are now employed; that is, an additional force of 586,000 employees. Even if we base their remuneration only on the average wage scale as paid by the Prussian-Hessian railways, it would cause an extra expenditure of almost $200,000,000 a year. A second factor is the lesser train activity of the Ameri- can railroads, especially in the passenger traffic. If the American railroads were to run in proportion to the realized operation revenue an equal number of trains as we must operate so as to satisfy the demand they would have had to cover, in 1902-03, more than 300,000,000 train kilometers in addition to what they actually covered. The extra expense resulting from this increased service may be roughly estimated at $120,000,000, or 500,000,- 000 marks. Apart from these two chief factors it must be remem- bered that the American railroads have expended a great deal less for the renewal of rails and ties than the Ger- man. In 1902-03 the difference in the relative expenses amounted to not less than $30,000,000. Against the higher average salaries paid by the Amer- ican railroads there are, accordingly, lesser expenses in other departments, the money saved thereby making up fully for the former. If the statistical showing of the ratio may, on the whole, be considered correct, one is justified in concluding that the American railroads are, to say the least, not managed more economically than the German, although 387 the latter comply, to a somewhat greater extent, with the public demand for more frequent traveling opportunities. INTEREST, DIVIDENDS, SURPLUS. The income derived from the operation of railroads in the United States is devoted, in the first place, to pay- ing the interest on the capital invested. The capital invested in American railroads consists of common and preferred stock, as well as of bonds and funded debt. The capital stock aggregated at the end of June, 1903, $6,155,559,032, or 48.85 per cent.; the funded debt amounted to $6,444,431,226, or 51.15 per cent, of the total capital of $12,600,000,000, or 52,400,000,000 marks in round figures. The growth of the invested capital since 1892-93, and the payments of dividends and interest thereon, are shown in the following summary : Interest and Dividends Capital invested Year Dollars Percentage of the Dollars X^UliUlS capital invested 1892-3 $9,894,625,239 1359,096,280 3.63 1893^ 10,190,658,678 358,533,939 3.52 1894-5 10,346,754,229 345,660,724 3.34 1895-6 10,566,865,771 345,696,611 3.27 1896-7 10,635,008.074 334,990,829 3.15 1897-8 10,818,554,031 342,279,580 3.16 1898-9 11,033,954,898 362,167,909 3.28 1899-1900 11,491,034,960 392,547,588 3.42 1900-1 11,688,147,091 418,830,622 3.59 1901-2 12,134,182,964 459,813,510 3.79 1902-3 12,599,990,258 480,681,300 3.81 Confining the summary to the more consolidated rail- roads in the States of New York, New Jersey, Penn- sylvania, Delaware, Maryland and a part of West Vir- 388 ginia, designated in the official American statistics as Group 2, we get the following showing : Interest and Dividends Capital invested Year Dollars Percentage of the Dollars capital invested 1892-3 ;f2,106,157,662 j!95,641,853 4.54 1893-4 2,167,526,300 91,160,022 4.21 1894-5 2,189,170,848 89,303,936 4.08 1895-6 2,219,529,759 87,090,520 3 92 1896-7 2,100,428,192 85,402,686 4.07 1897-8 2,244,344,867 84,640,707 3.77 1898-9 2,297,620,381 87,043,483 3.79 1899-1900 2,337,874,067 90,609,354 3.88 1900-1 2,381,079,405 95,358,654 4.00 1901-2 2,484,776,547 105,293,614 4.24 1902-3 2,644.555,697 108,503,717 410 The total capital per mile was : 1892-3 . . . $59,729 1896-7 . . . j559,620 1900-1 . . . 161,531 1893-4 . . 59,419 1897-8 . . 60,343 1901-2 . . 62,301 1894-S . . 59,650 1898-9 . . 60,556 1902-3 . . 63,186 1895-6 . . 59,610 1899-1900 . 61.490 (How these figures, which are taken from the statis- tics of the Interstate Commerce Commission, have been arrived at is not quite clear. Taking as a basis the total mileage we get for the year 1902-03, for instance, an invested capital of but $60,814 per mile; that is to say, 157,232 marks per kilometer.) Accordingly, the capital invested in proportion to the mileage has not increased during the first years of the last decade, but ever since 1895-96 it has been growing constantly. The increase has since grown to $3,576 per mile. Including all kinds of track, such as second, third, etc., and switch and side-tracks, the capital invested per track mile represented at the end of June, 1903, a some- what smaller amount than in 1893; however, the differ- 389 ence was but $201.95 P^r track mile. It seems, therefore, that the tracks have been extended partly at the expense of the operating fund; for the other part the expenses have been added to the invested capital. An entirely dif- ferent state of affairs exists with the Prussian-Hessian railroads, for here the average of the capital invested per track kilometer has decreased 3,785 marks within the last ten years. It is evident, therefore, that in Germany many new tracks have been paid for from the operating fund. American railway administrations evidently do not limit the kind of construction work that may be paid for out of the current revenues from operation as strictly as we do. This has already been referred to. They are more inclined to increase the invested capital for such pur- poses, a procedure which in the long run is bound to affect unfavorably the payment of dividends. The statistics quoted in the last printed tables show that the rate of interest paid by the American railroads is on an average quite moderate. This is the more sur- prising, since, as is well known, the invested capital of American railroads is relatively small, in view of gov- ernment subsidies and, above all, land grants. Their in- vestment per kilometer aggregates but 163,365 marks, while the average invested capital of the Prussian-Hessian railroads amounts to 261,510 marks, or 60.8 per cent., more. But for stock jobbing and all kinds of financial manipulations, practiced in former years, the invested capital of American railroads would, in all probability, be much smaller still. The figures in the tables given above represent, as a matter of fact, only averages. If we examine the results achieved hitherto by individual railroads we find many a 390 gap as yet which it takes energy and integrity to fill. Thus, in 1902-03, $2,704,821,000, or 43.94 per cent., of the capital invested in American railroads neither paid dividends nor interest. Truly, compared with ours, these are strange conditions, yet there is much room for hope, if one considers that in former years the proportion of the invested capital which did not bring any returns had been much larger still. Dividends on the following per- centages of invested capital were not paid in the following years : Year. Per cent. 1894-95 70.06 1895-96 70.17 1896-97 70.10 1897-98 66.26 1898-99 59-39 1899-1900 54.34 1900-01 48.73 1901-02 44.60 1902-03 43.94 The railroad administrations which do not pay any dividends are by no means those of the far West only; they are rather distributed over the whole country, in- cluding even the densely populated States of the East. The rate of the dividends paid differed, as a matter of course, greatly with the various administrations. The percentage of dividends paid in 1902-03 was i to 2 on 1.46 per cent, of the invested capital, 2 to 3 on i.o per cent., 3 to 4 on 4.13 per cent, 4 to 5 on 13.51 per cent., 5 to 6 on 10.34 per cent, 6 to 7 on 11.39 per cent, 7 to 8 on 9.10 per cent., 8 to 9 on 3.10 per cent, and 9 and more on 2.03 per cent, of the capital. The Pennsylvania declared, in 391 1 900 and 1901, dividends of 5 per cent, each, and since then regularly dividends of 6 per cent. The non-payment of dividends or the payment of an inadequate dividend must not be ascribed rashly to a faulty system of management practiced during the dividend period or the time immediately preceding it. Perhaps one or the other company was induced to take that course for the sake of making amends for the mistakes of former years, and to spend now the actual surplus on needed improvements of the plants, which could no longer be de- layed. That this is often the case can be shown from the annual reports of some railroads. On the other hand, it goes without saying that such procedure does not by any means meet with the approval of the present stock- holders. It is likely that the railroads belonging to Group 2 have no longer to contend, to any appreciable extent, with sins of omission and commission committed in the past; at least, such should not be the case. Comparing the financial results of this group with those of the Prussian- Hessian railroads, we find the rate of interest paid on the invested capital to be as follows (1892- 1903). Eastern American Railroads, Prussian-Hessian Group 2— P. C. Railroads— P. C. 1892-93 4-54 5-15 1893-94 4,21 5.68 1894-95 4.08 5.66 1895-96 3.92 6.75 1896-97 4-07 7.15 1897-98 3.77 7.14 1898-99 3.79 7.07 1899-1900 3.88 7.28 392 IQOO-OI 4.00 7.14 1901-02 4.24 6.41 1902-03 4.10 6.54 Reserve or renewal funds are, as has been said before, put aside neither by the American private nor by the Prussian-Hessian State railways; however, most Ameri- can railroad administrations follow the custom of setting aside a certain percentage of the surplus, to be used for general purposes, perhaps also to equalize dividends. The surplus fund thus formed aggregated at the end of June : 1892-93 $8,116,745 1893-94 45,851,294 1894-95 29,845,241 1895-96 1,514,169 1896-97 1897-98 44,078,557 1898-99 53,064,877 1899-1900 87,657,933 1900-01 84,764,782 1901-02 94,855,088 1902-03 99,227,469 In 1896-97 the total railroad administrations showed a deficit of $6,120,483. The surplus from 1901-02 to 1902-03 amounted to $4,372,381. Adding this surplus to the dividends and interest enumerated in the compara- tive table, the percentage is increased a little in favor of American railroads ; yet even then it is considerably below that of the Prussian-Hessian railroads. It might be claimed that comparisons between the railroads in the United States and those of the Prussian-Hessian admin- istration are of little value, because there are good ones and poor ones among the American railroads. In reply 393 we might say that the Prussian-Hessian railroads also consist of profitable and unprofitable lines. As demon- strated by kilometric comparison, the financial returns of even the railroads in the Eastern parts of the United States (Group 2), which are certainly as much patronized in proportion as the Prussian-Hessian railways, fall greatly below those of the latter lines. 394 ELEVENTH CHAPTER. State Supervision of Railroads. State Control and Supervision. — The Interstate Commerce Commis- sion in Washington. STATE CONTROL AND SUPERVISION. While the civilized States of Europe, soon after the construction of the first steam railroad, set about to regu- late by legislation in general the rights and obligations of the companies to the State and the public, the develop- ment, apart from some Western States, took a different turn in America. Over there the railroad companies were endowed with a charter, the rights of which were entirely depend- ent upon the good will of the State rulers. To the one more rights and less obligations were granted, to the other a charter of opposite conditions, and as, on the other hand, each individual State granted charters, it can be imagined how variegated were the circumstances under which the several companies entered into exist- ence. That which all had in common related mostly only to the general organization of corporations and to their subordination under definite organs of the State. Besides these, there were perhaps certain definitions relating to the stock company as an industrial association; but pre- cisely in those essentials in which the publicly legalized position of the railroads as common carriers found ex- 395 pression, there was not the remotest idea of uniformity or even similarity. Some charters contained definite rules concerning tariffs, their ratio and publicity, as well as the interdiction of preferences in favor of individuals; others had less definite and others again no rules at all in this respect. Equally diverse were the obligations im- posed upon the single companies in the interest of the States, and finally the favors bestowed on them, for in- stance, through the financial assistance of the company by the State and the fixing of taxation. The possibility, resulting from the lack of uniform treatment, to obtain special privileges for a single com- pany was an incentive for promoters to create new com- panies. The public at large was induced to subscribe funds for these numerous enterprises by the opinion, which even to this day is almost universal in the United States, that free competition in the field' of railroading influences the regulation of prices as favorably as it does in all other manifestations of the economic life of the people. In other words, everything tended to stimu- late the construction of railroads. The general American views to have as little interference as possible on the part of the government did the rest by creating a condition of things which made it evident that the State was not the master of this whole movement. Considering American conditions and the rapid de- velopment of the country, it is not to be wondered at that the railroads, through the almost unrestrained use of their rights and the manifold evasions or neglect of their obliga- tions, had to come into grave conflict with the government and the public. It was first attempted to stop somewhat, by restrain- 396 ing additions to the charter, the abuses which were spreading more and more, especially in the field of tariff construction. The success, however, has not been remark- able; especially the institution of State commissioners, created to supervise the railroads, has proved almost worthless, for they did not have the necessary authority to act energetically and the railroads had acquired in many cases a power to be reckoned with by the State. Personal relations, also, like everywhere in America, exerted an influence not always compatible with the interests of the common weal. The success of the few separate States that had not issued charters from the outset, but had framed general laws, was not much better. The reason for this, how- ever, is to be looked for in the fact that these laws, far from striking the main evil — the fierce competition of the roads between themselves — increased it by prohibiting every co-operation of competing lines in general. In later legislation by the separate States, it is true, this standpoint has in many cases been abandoned, by allow- ing either pools or consolidation (the purchase or lease of competing lines) or both; but the difference in the leg- islation by the several States had the consequence that for one and the same administration, according to its extent over several single States, frequently laws of op- posite intent were in force, so that the matter was only aggravated and a state of affairs has been brought about which reveals anything else but good, orderly govern- ment. Only in the Western States — which have as regards making the railroads subservient to the law, entered upon a course which we in Germany have followed also — ^has 397 State supervision of the railroads had beneficial results from the outset. These States created from the begin- ning special organs (commissions) which, from the na- ture of their composition, have offered a certain guarantee for the enforcement of the laws. Soon also the aim be- came manifest to extend the supervision more and more to practical matters, especially to the maintenance of the road. In relation to the construction of new roads also the attempt was made to act restrictingly by demanding proof that a certain sum was subscribed per mile and that at least part of it was actually paid in. The endeavor has even been made to arouse the public sense of justice by prohibiting — for instance, in California — the granting of free transportation or reduced passenger rates to mem- bers of the legislature and public officials, which example has been followed successively by other States. (Com- pare Clark, "State Railroad Commissions" (Baltimore, 1891); also Meyer, "Railway Legislation in the United States" (New York, 1902), and the discussion of these works by Dr. A. v. d. Leyen in the "Archive for Rail- roading," years 1894, p. 1199, and following, and 1903, p. 1369, and following.) While a part of the States, among them the most populated and those economically most developed, con- ferred only consultative authority on the State commis- sions; others held a rigidly supervising commission, in- vested with authority to punish, to be the proper thing. Some left the railroads full liberty to fix the tariffs as before, others authorized the commissions to dictate max- imum tariffs. Especially in regard to the latter point the railroads tried to preserve the utmost independence. Their aim was, above all, to keep their local tariffs at the high- 398 est possible rate, in order to indemnify themselves for the constant decrease in the through tariff caused by unheal- thy comi5etition. It had to come to a conflict when, in the year 1886, the courts decided that the legislatures of sin- gle States had not the power to impose restraint upon the interstate relations of commerce and traffic. Then the single State legislation had reached the limit of its power and the Federal government had to interfere. How and with what success is shown by the history of the Inter- state Commerce Commission, which, without a fault of its own, has deplorably few gratifying results to show. The legislation of the single States pursued its way undisturbed, and it should be appreciated that for some time past the efifort to make State supervision more severe is on the increase. Almost all States have prohibited, through their constitutions or by general laws, that rail- roads be further created by charters or be provided with them. A number of other States have followed the ex- ample of California, which provides for the incorporation of a railroad, among other conditions, the subscription and deposit of a fixed capital, and limits, at the same time, the investment to a certain sum per mile. In some cases the duration of the "incorporation," which is some- thing intermediate between admission to the State and our application for entry into the Commercial Register, is also limited to a fixed period of time. Some States stipulate distinct rules for the operation management and the traffic service; quite a number en- acted a penalty for the private traffic in railroad tickets ; others, again, permit the combination of connected non- competing railroads, while others forbid this, and, above all, a combination of competing railroads. Most of the 399 States prohibit unequalities of the tariff as well as every preference of single individuals, and compel the publicity of the tariff, whose revision is reserved, moreover, not only for the local, but also for the transit traffic, always, of course, within the boundaries of the State. These are the so-called "strong commissions," while those which have no supervision over the tariff are called "weak com- missions." It appears very doubtful whether they deserve the name "strong commissions" and whether actually there is any considerable difference between them and the "weak" ones. This much may be taken for granted, however — that the supervision of the railroads in Amer- ica by legislation of the single State can never be a thor- oughgoing one. This is not only caused by the imperfect authority of the single States over the railroads travers- ing several States, and the consequent variety of legis- lation, but also by the views still generally prevailing in America as to the purposes and the character of the rail- roads on the one side and those of the State on the other, as pointed out in the third chapter on the question of State ownership of railroads. THE INTERSTATE COMMERCE COMMISSION IN WASHINGTON. The Federal law of February 4, 1887, relating to the regulation of the traffic, contains, among others, the ordi- nance for the creation of a kind of supervisory office, the Interstate Commerce Commission. According to this law, which relates only to the traffic between the several States, but not to the traffic within the separate States, the Inter- state Commerce Commission is empowered to inspect the 400 management of all railroads subject to this law and to inform itself about all details of the way and manner of their administration in so far as is necessary for the exercise of its right of supervision. On the other hand, this commission has also the right to receive, examine and remedy complaints of the public against the railroads, as well as to redress on its own initiative existing evils. To this end the railroads have to send in annual reports to the commission of their entire financial and traffic con- ditions, and to submit all their tariffs and the agreements made with other roads. The commission makes its deci- sions on the basis of these documents. Should a railroad refuse to comply with the decision, then the matter will be further prosecuted in the regular courts. These are empowered to investigate the matter anew ; they are not bound in this either by the actually established facts nor by the legal deductions of the Interstate Commerce Com- mission. By a supplementary law of March 2, 1889, some stipulations of the law of the year 1887 were altered, especially those relating to the publication and the forma- tion of the tariffs, etc. This right of appeal is in itself not of a nature to increase the power and the prestige of the Interstate Commerce Commission, as experience teaches that the railroads are only too much inclined to appeal to the decis- ion of the regular courts against inconvenient decisions of this office. The importance of the Interstate Commerce Commission is still further diminished by two decisions of the Supreme Court of the United States — namely : first, by the decision that the commission is entrely justified to declare as unjustly high the freight rate disputed by the 401 complainant, but is not authorized to fix the correct freight rate, and, second, by the interpretation favorable to the railroads of the so-called long and short haul clause, an inhibition to charge a higher freight rate for a shorter stretch on the same line in the same direction than for a longer stretch if essentially similar circumstances and conditions exist in both cases for the fixing of the same freight rate. The Interstate Commerce Commission held the opinion that among these circumstances the competi- tion of other roads could not, as a general rule, be in- cluded if it existed on the longer stretch and not also on the shorter one. The Supreme Court of the United States decided, nevertheless, that, according to the inter- pretation of the inhibition, any existing competition gives the railroad the right to charge for the shorter haul, even if free from competition on that stretch, a higher rate than the competitive rate prevailing for the longer haul. In consequence of decisions of this kind of the United States Supreme Court, the laws aiming at the re- striction of the arbitrary rule of the railroads were bound to fail. There are also other reasons, however, to which the lack of success of the doubtless very meritorious and valuable activity of the Interstate Commerce Commission, and consequently more or less of the various laws, may be ascribed. It is said that, like unfortunately everywhere in the United States, personal questions are of great weight also in this matter. To this must be added that the jurisdiction of the courts of the several States by delay in the decisions, frequently for years, prevents the injured shipper from getting his rights. It is due to the initiative of President Roosevelt 402 that, by the law of February 19, 1903 (known as the El- kins act), the general power of the Interstate Commerce Commission has been increased at least in its supervisory capacity even if not in its field of jurisdiction. The com- mission can now proceed against a railroad granting an unlawful favor as well as against the shipper accepting it, and can for this purpose compel the latter to produce; his books, etc. ; it can also refer the case to the courts for penal prosecution. Still not even by this law has this in- stitution been invested with extensive power. It would mean a further step forward if a new move on the part of President Roosevelt had the same success as the one just mentioned. According to this, the Inter- state Commerce Commission, which, as before explained, according to the interpretation of the law, has only the right to declare upon complaint a single freight rate as "unjust" and "unreasonable," should be invested with the further authority to fix in its decision at the same time what freight rate is "just" and "reasonable." This freight rate should be adopted immediately and remain in force as long as not repealed by a judicial decision of the ap- peal against the ruling of the commission. A bill to this effect was introduced and passed by the House of Repre- sentatives last year and met with the President's appro- bation. The bill is now before the Senate, which before acting on it, considered a thoroughgoing investigation of the railroad tariff question by a commission appointed expressly for this purpose as necessary. This commis- sion had finished its work in May, 1905; the result of its labors has been published in five stately volumes. In his message of December 5, 1905, President Roosevelt returned emphatically to the subject ; it is to be 403 expected that the bill will engage the attention of Con- gress once more. Out of private circles the Roosevelt idea has been supplemented by another proposition which intends to remedy the evil in another way. Judge Grosscup, the originator of the plan for which sentiment is being created in a somewhat sensational manner, proposes the estab- lishment of a "Transportation Department of the Gov- ernment" with a president at its head, who, like a knight of old, proceeds courageously to unearth and prosecute for the benefit of the shippers — especially the smaller ones — the pernicious machinations of the companies. He should have a number of assistants, selected if possible from the ranks of railroad professionals, who would have to follow up, even without formal request, rather acting, if necessary, from their own impulses, all complaints of unjust treatment, favoritism and "unfair practices" of the railroad administrations, for the purpose of restoring har- mony by an informal discussion between the parties con- cerned. Only when no satisfactory result can be brought about, then an appeal shall be made to a "Special Court of Transportation," taking the place of the Interstate Commerce Commission as a supervisory board of the railroads. The principal seat of this court should be in Washington. Its members should, as a body, devote their activity exclusively to their duties; they also should cir- cuit the whole country as "judicial commissioners," so as to be able to decide complaints with all possible speed, the "Department of Transportation" acting, as it were, as public prosecutor. From its decisions appeal shall only be had to the Supreme Court of the United States. One cannot fail to appreciate that this proposition 404 has many advantages over the bill now under delibera- tion concerning an extension of the authority of the Inter- state Commerce Commission. It obviates in an oppor- tune manner the immediate appeal to judicial interference and places the preponderance of power on the administra- tive branch, holding rightly that the fixing of the railroad tariffs, etc., is not a judicial but rather an administrative or legislative function which for this very reason should be entrusted to the proposed highest administrative office — the "Transportation Department." We cannot form an opinion whether the Grosscup proposition has a chance to become a law, even with modi- fications in detail; but it appears to us that all these at- tempts will not correct the evils complained of. They are to be attributed to the same reasons which caused in the critical moment the failure of the supervision of the sin- gle States and will continue to do so. The Interstate Commerce Commission cannot act really reformatory and would not be enabled to do so, even if its authority were extended by the pending bill, for the very reason that a supervisory body, which it will al- ways remain according to its whole constitution, is never in a position to keep pace with the generalship of such great business formations as the American railroad ad- ministrations, the less so as these combinations, like all railroads, have a more or less monopolistic character. We need not go very far to prove this. The administration of our former private roads was not free from faults, and the State Commissioners, notwithstanding the fact that they had been given far greater authority, were unable to provide remedies. These evils have completely disap- 405 peared only since the government undertook the adminis- tration of the roads on its own account. What will be the development in the United States ? It is admitted on all sides, and is not seriously denied by anybody, that something must be done soon, even with- out regard to the possibilities of the future, and that President Roosevelt is the man to bring about the discus- sion of a question of this kind. But a solution of the question, even only preparatory for future steps, is not to be thought of at this time; ages may pass before some- thing is done, as a person close to the White House as- sured us. (Compare "State Ownership," in the third chapter.) For the present it would be of great advantage for American conditions in general and a real beginning of continuous sound conditions for the railroads if the power of the government could be made efficient in one way or the other. In conclusion a few words may be said concerning the composition of the Interstate Commerce Commission and its business activity in other fields. This body consists of five members (commissioners) who are appointed by the President of the United States, with the advice and consent of the Senate, for a term of six years. One of the members presides as chairman, for the time being the Hon. Martin A. Knapp, of New York. The functions of these members are exclusively judicial. The management of the business outside of the sessions, especially the direction of the further adminis- trative activity assigned to the commission, is in the hands of the secretary, since the installation of the insti- tution, Mr. Edward A. Moseley. He has earned great 406 credit, especially by introducing measures for securing greater safety in the railroad service. A whole line of diplomas and testimonials which adorn the walls of his office testify to the recognition he has earned, principally from the railroad employees. To him is attributed the merit of having given the incentive for the introduction of the automatic coupling of railroad cars. He is charged with the supervision of the railroad administrations in relation to the introduction and maintenance of the nec- essary safety devices according to the law of March 2, 1893 (Act to Promote Safety). For this branch of the office (safety appliances) fifteen inspectors are employed by the Interstate Commerce Commission, who have to ascertain by circuit trips whether the law is obeyed in all parts. It struck us as strange to find that these offi- cials do not seem to enjoy a good reputation with the other officials. We were told that they are not over- scrupulous in the choice of their means to discover the true state of affairs. At any rate, it must be acknowl- edged that they frequently help the officials and workmen injured in the service to get their rights from the admin- istrations. Besides the five commissioners and the secretary, who together draw a salary of about 170,000 marks, there are employed twelve higher officials, with salaries of from 7,000 to 15,000 marks, eighty-nine clerks, with salaries of from 4,000 to 7,000 marks, and eighteen labor- ers. The salary of the inspectors of safety appliances varies between 5,000 and 7,000 marks. Besides this, they receive, on the average, a little over 4,200 marks for traveling expenses. The excellence of the reports which the statistical 407 section (thirty-two men) of the Interstate Commerce Commission pubHshes is well known. The work done in this respect cannot be valued too highly, especially when considering the difficulties this office has to contend with, because the railroad administrations try to hide the truth for the most varied reasons. To facilitate the work for both parties the commission has established a standard blank (which is issued anew every year and is sent to each road in the required number) for the purpose of filling in the statistics. It represents, at the same time, the skeleton for the annual report, which each administra- tion has to render to the commission. (This annual re- port is not to be confounded with the report to be pre- sented by the railroads to the stockholders.) Very extensive also is the work which the railroad tariff department has to perform in consequence of the duty of the roads to inform the commission, without delay, of all tariff changes. A distinct form for the publication by the administrations is not prescribed ; it is only stipu- lated that tariff advances should be published ten days, tariff reductions three days, before taking effect. In many cases this is limited to posting up notices in the stations, announcing tariff changes. It is evident from this that it is difficult for the Inter- state Commerce Commission to exercise its supervision. Frequently only a later change of the tariff, which is an- nounced to the commission, makes known that another has preceded it. As a general rule leniency is shown to those railroad administrations which are not suspected of bad intentions, especially in relation to the obliga- tion to give notice before the change of a tariff. The 408 very limited powers of the office may, perhaps, have some- thing to do with that. In our presence it was established that at the time being about six million cases referring to tariff matters were registered and passed upon. Since its installation (1887) the commission has rendered 1,194 formal decis- ions, after previous investigations and verbal negotia- tions. Nine stately volums testify to the superior expert- ness and the exquisite style of the commissioners. An excellent index facilitates the finding of all decisions wanted. During the year 1903 the commission finished eighty-one oral investigations; in the same period a total of 450 formal complaints were settled. The commission renders annually a detailed account of its activity to the Senate and the House of Representa- tives, with especial regard to the questions relating to railroading which agitate the public mind at the time. It expresses on this occasion, mostly with frankness, but in a thoroughly matter-of-fact form and without any per- sonal feeling, its opinion why the railroad laws so far enacted have not produced better effects. 409 TWELFTH CHAPTER. Summary and General Observations. Summary': Duties and Accomplishments of the American Rail- roads. — Construction and Administration. — Financial Develop- ment and Situation. — ^Relation to the Public Weal. — General Remarks. DUTIES AND ACCOMPLISHMENTS OF THE AMERICAN RAILROADS. One frequently encounters among laymen the opin- ion that the American railroads excel by some quite ex- traordinary things, like gigantic structures, overwhelming traffic, gorgeously equipped cars, incredible speed — in short, by unattainable accomplishments of all kinds in the various branches of railroading, which ought to shame us professionals of the Old World. And as the Ameri- can railroad colleague shows to us, with the greatest good will, the plant and the whole system of his rail- roads, he seems to be of the same opinion ; he casts con- descending glances at us, and expects at least to see us downcast with overwhelming astonishment. The arguments in the preceding chapters of this book will bear testimony that we endeavored to become acquainted with the conditions of the railroads of the United States in a serious manner and without prejudice. While fully appreciating the plants and accomplishments of the American railroads and their great merits in 411 developing the country, we must confess that we did not find anything surprisingly majestic or overwhelming; we found there, as every attentive and expert traveler will find everywhere in the civilized world, some things better and some things less good than with us. Opinions like those just mentioned are based not the least on the fact that the demands which are made upon the railroads on this or on the other side of the ocean are not always kept clear in mind. A few figures from the preceding chapters may, therefore, be recalled here, be- cause they are apt to allow a comparison of the extent of railroad traffic in America and our country. The railroads of the United States of America, with a road length of 330,000 kilometers in round figures — fully ten times the length of the united Prussian and Hessian State railways — have to accommodate undoubt- edly a very large traffic. They had to carry in the pas- senger traffic, during the year referred to in the discus- sions of the preceding chapter, 694,891,535 persons, who traveled nearly thirty-three and two-thirds billions of passenger kilometers. With the Prussian-Hessian rail- ways, with a road length of only 31,764 kilometers, the number of passengers carried was 608,864,990 and the number of passenger kilometers was fifteen billions. This traffic, therefore, was also considerable. The American traffic was consequently bigger by one-tenth as regards the number of passengers and 2.25 times more extended as regards the number of passenger kilometers, and the receipts were 4.65 times more than the receipts of the Prussian-Hessian railways in the passenger traffic. Still wider were the differences in the performances of the freight traffic. In this traffic the railroads of the 412 United States had to dispose of 579,392,197 tons with two hundred and fifty-two and three-quarters billions ton- kilometers in round figures, while with us, 210,958,990 tons with twenty-four and two-fifths billions of tons kilo- meters in round figures were to be transported. In Amer- ica, therefore, the number of tons was two and three- quarters times in round figures — the number of ton-kilo- meters was ten and one-third times in round figures — greater than with us. The receipts of the American rail- roads were 6.44 times larger than the receipts from the freight traffic on the Prussian-Hessian railways. The American railroads had, according to this — taking it all in all — to carry in the freight traffic for the average road kilometer, about as many freight ton-kilo- meters as our railways; on the other hand, the incom- parably more costly passenger traffic was over there con- siderably less than with us. In both traffics America has the additional great advantage that both passengers and freight have to be transported incomparably greater dis- tances than with us. These are circumstances which are apt to contribute essentially to the facilitating and cheap- ening of the operative management. Above all things, the transportation of freight in large quantities and often in bulk, when extending over long stretches, is incom- parably easier to effect than the transportation of freight on short lines branching off in all directions of the com- pass. The carrying expenses, including the costs of dis- patch at the starting and the end station amount, reduced to a kilometer unit, to so much less as the distance is greater. In considering these figures the conclusion will be arrived at that the American railroads — in the grand 413 total — have comparatively by no means greater problems to solve than our railroads. The question is only whether they are able to meet their requirements with better adap- tation to the demands of the traffic and with greater re- liability, and whether they spend less for their operative management than do our railroads. As regards the first point, which is of paramount interest to the public, it cannot be maintained that the operative management of the railroads in the United States is more prompt and more safe than with us. In the freight traffic, apart from the unequal treatment of interests having equal rights, which has not been rooted out up to this time, the shortage of cars frequently con- stitutes a serious drawback, at any rate far more serious than with us in times of sudden, unexpectedly large ac- cumulations of freight. As long as the American rail- roads hold the view that they are "more than fully en- gaged," as the saying is, when their car park is insufficient for the temporary requirements and "that con- sequently they cannot fill further orders," an essential improvement is not to be expected. Generally known are also on the other side the delays in the entire train traffic, the express passenger trains not excepted. And as regards safety, the railroads of the United States are undoubtedly far behind our railroads, as the statistical figures concerning railroad accidents given in the second chapter prove completely. These are facts which are beginning to disturb public opinion in a high degree, although the consciousness that safety in the railroad service can in the main only be assured by the most scrupulous regularity, has not as yet penetrated as far into the minds of the American people 414 as is the case in Germany. It is well known that Presi- dent Roosevelt recommended repeatedly in his messages measures to remedy this evil. As reasons for the in- crease of accidents and irregularities are principally al- leged : the enormous increase of the trafSc with which the extension of railway plants, particularly the laying down of second tracks, cannot keep pace; the excessive wear and tear on the superstructure of the railroad by the steadily increasing weight of the rolling stock, and, finally, the overworking of the railroad personnel. We could not ascertain in how far the complaints that the railroad personnel is overworked are justified, as definite rules for the work day and time of rest for the employees do not seem to be generally established. At all events, the railroad employees make, upon the whole, a very good impression. Above all things their sobriety was frequently praised, a quality which is indispensable to the safe conduct of the traffic, especially with insuffi- cient operative facilities. A special merit as regards the moderation in the use of alcoholic beverages is ascribed to the Young Men's Christian Association, extending over the whole country, whose organization we have recom- mended in the first chapter for imitation by us, modified and adapted to our conditions. Still less are we entitled to render a final judgment concerning the other alleged reasons for the insecurity and the increasing lack of punctuality in the service. Without the least doubt they are closely connected with the rapid development of American railroad affairs. On the vast continent, which never knew good road communications worth mentioning, the railroads have es- tablished by degrees the connection of the East with the 415 farthest West and with the other points of the compass, and have thus shown not only the way how to estabhsh communication and intercourse, but have created its foun- dations in many cases. In this they had, it is true, the advantage on the one side that the land, in so far as it was not granted free of charge by the government, re- quired not too large an expenditure of money; on the other side, scruples as regards the supervision and relia- bility of the enterprise obstructed rarely the realization of the plans; the unity of the language connecting the United States in their whole extent also facilitated the work of intercommunication, which was moreover never hampered by custom barriers. Of course the monetary unity was also of advantage in furthering the traffic intercourse. Under these circumstances the Americans have suc- ceeded, in wise recognition of the fundamental impor- tance of railroads for the development of their country and its vast resources, in the promotion of the construc- tion of railroads to such an extent that from the begin- ning they did not only not remain behind the Old World, but that they out-distanced it. They may claim that the evolution they brought about through their own effort has not only benefited themselves, but that also much good has come from them to the Old World. The Americans had no examples or models they could copy from in the field of railroads such as the Old World possessed in other branches of civilized life, particularly also of the eco- nomic life; the first American railroad, a part of the Baltimore and Ohio road, was opened for traffic in 1830, while on the first English railroad the introduction of locomotives took place September 17 of the same year, 416 and the first German railroad started its run five years later. The developing process, especially the haste with which work was carried on on the American railroad net, in many instances amid the most violent contests of hos- tile competing companies, explains why the constructive and operative systems of the railroads do not show every- where the care which is required in a well-regulated man- agement. Perhaps there was too much generalization in this haste, by applying conditions of the highly developed East unhesitatingly to the less developed West. OPERATIVE INSTITUTIONS AND PLANTS. So much good has, however, been accomplished by this, that notwithstanding, perhaps just on account of the contests originating from competition, the external char- acter of the railroads is, on the whole, more uniform than with us. It would be hard to discover in America any considerable difiference in the construction of locomotives, passenger and freight cars. Not only are the types gen- erally the same; the uniformity is also shown in the ex- terior and in details. This has its great advantages; apart from the cheapness of purchase, to be referred to later, it is precisely the conformity of the rolling stock, according to our observations, which causes the admira- tion of laymen, not only of the American, but also of the European traveling in America. Indeed, it is a magnifi- cent institution that enables one to accomplish the long trip from ocean to ocean in cars which resemble each other like eggs at the one shore as well as at the other. It is here where we can learn; for how great are to this day the differences in the traffic between countries 417 in Europe, and how hard is it to run similar cars even on the great through Hnes ! Moreover, how numerous are the differences even on the German State railways ! From the entire plan of construction of the car to the arrange- ment of its smallest details, even to the door-lock of the freight car, each single German railroad administration has its particular notions. While the American discards obsolete, even not quite modern devices, as a matter of course, every German State sticks to its peculiarities, often in a spirit of pettiness. Thus the carrying on of traffic and the operative management are made more difficult in railroad affairs, and especially the cost for the purchase and maintenance of the rolling stock is considerably in- creased. If the Americn uniform type would give us an impulse to take a step forward on this line and to abandon anti- quated methods, we would owe a great debt of gratitude to our American railroad colleagues. Certainly not every- thing could be adopted, in our opinion, just as it is; for instance, the American four-axle uniform freight car — standard car — could hardly be considered suitable in gen- eral for our conditions. The differences in the traffic are too great for that, and there is no room for doubt that the heavy car has many disadvantages, even for America. But we have learned this from it : that it has demonstrated to us the too small efficiency of our antiquated freight cars of a capacity of five tons and a little over, and that it has caused us to change our two-axle car to four times its original capacity, and at the same time to contemplate the introduction of the four-axle car for certain perma- nent traffic conditions. Europe must also acknowledge that America is the 418 originator of our four-axle passenger coach, as well as of the dining and sleeping cars, although it is true that they have taken a somewhat different form in the adapta- tion to our conditions. We are also now experimenting with a system similar to the American for the centre coupling of railroad cars, obligatory by law in America, and we are further making preparations for the introduc- tion of the air-brake in use on freight cars in America so as to dispense with the hand-brake. Undoubtedly the American railroads had to pay dear for their experience and are paying for it to this day. This is true especially as regards the organization of the train and switching operations, and, as mentioned, for the condition of the structural plants. America has not at- tained the perfection of the Old World in this respect — above all, of the railroads of the German Empire, espe- cially those of the Prussian-Hessian combination. In all these respects America may learn from us as we have learned from others and learned from it, and mean to keep on learning. Whether it is willing to do so we are not quite assured. Apparently its self-consciousness still pre- vents this, and America is in many ways still too much inclined to regard our instutitions as inferior without further investigation. It was, therefore, a meritorious undertaking of the Prussian-Hessian State railroad administration, from a national standpoint alone, to exhibit at the World's Fair at St. Louis a model railroad with all track, switch and signal machinery and a depot with all the latest safety appliances, which represented the operative plants in an excellent manner. Not a small part of the public at large may have passed this plant without understanding it ; but 419 the American railroad professional found an opportunity for serious reflection in studying the great achievements of our technique and industry, as we had occasion to hear more than once. Precisely this observation has contributed to induce us not to let go by the opportunity of calling attention to the idea, suggested to us by various parties, to arrange a special exhibition of means of transportation in the capi- tal city of the German Empire. After the success which our special railroad exhibit in St. Louis has achieved (which, of course, was only possible on a small scale), it may be expected with certainty that an exhibition — limited to the field of transportation, comprehending these, how- ever, in all their scientific and practical details — will be of great advantage and will exceed by far the success of a mere show. A special exhibition of this kind would not only demonstrate that our traffic institutions are up to date, but would also prove to what extent the German State railroads — apart from the Navy and War depart- ments — have been of stimulating influence upon the home industry in regard to excellent and standard work. FINANCIAL DEVELOPMENT AND SITUATION. Of course the practical introduction of equally solid constructions, as they form the rule on the German rail- roads, will offer still many difficulties to the American railroads after they have been technically approved. The introduction costs money — much money! But, notwith- standing this, American railroads ought not to be afraid to incur large expenditures in order to adapt the railroad plants to the extent of the traffic. This refers to numer- ous station buildings and station platforms ; it also refers 420 principally to the substitution of stone or steel bridges for the wooden bridges existing almost without number; to the elevation or removal of the tracks on city streets to obviate a most dangerous condition which, even in cities with 100,000 inhabitants or more, is almost the rule; it refers further to the abolishment of crossings, which are almost everywhere on the same grade level, and perhaps principally to the laying of second tracks and of siding, switching and other depot tracks. With a road length of 333,363 kilometers the track length of all railroads of the United States was, at the end of June, 1903, only 456,668 kilometers, or 1.37 times as much, while the Prussian-Hessian railroad combina- tion had 62,524 kilometers of track with 31,967 kilo- meters of road length ; the track length surpassed, there- fore, with us the road length 1.96 times, a proportion which exceeded even that of the railroad group of the East of North America with their great traffic and their incomparatively higher receipts per kilometer ; with them the track length was 1.92 times that of the road length. Last but not least is to be considered that the rolling stock of many American railroads is entirely inadequate, so that the comparatively large acquisitions of later years will have to be continued for a considerable length of time in order to make up for the most urgent needs. If it must be recognized as an admirable achievement, under all circumstances, that the Americans have created in a space of time of scarcely sixty years an enormous net of railroads, partially under great difficulties, the ex- tensive free grants of land for railroad purposes and other subsidies must not be overlooked in relation to the pre- viously mentioned second question — namely, the cost and 421 the rentability. These grants and subsidies have enabled the railroad companies to build the roads not only with the lowest conceivable expenses, but also to convert into valuable assets the land remaining on both sides of the road — assets which have been of essential importance for the financial development of the enterprise. Notwith- standing all faults and failings, especially in the financial field, which may have been committed in the construction of the road and afterwards, the interest bearing capital stock of the American railroads is to this day consider- ably lower than the capital stock of the German railroads. Nevertheless, the examination of the economic manage- ment on both sides shows a final result not unfavorable to our railroads. This is all the more remarkable, as the American pro- fessionals are of the opinion that a number of their meth- ods — above all, the employment of cars of largest possible capacity in the passenger and freight traffic, the frequent substitution of locomotives by new ones of improved con- struction, and similar principles more or less divergent from ours — tend in a prominent measure to reduce the expenses and influence therefor the economic result of the management in a particularly favorable way. It is difficult to say whether and how far we would be actually able to attain a further reduction of our expenses by adopting, at least partly, the American policies. For instance, it is possible that the continued increase in the capacity of the American freight cars may be of very great advantage to the American railroad and economic conditions in places where up to this day great quantities of freight, like grain, ores, coal and wood, in essentially larger quantities than with us, are shipped geschlossen 422 (that is, in bulk), and are transported in whole trains, with- out branching oi¥ and without separation, to a few large centres of traffic. The aim of the American railroads in this direction finds support in the readiness of the great manufacturers and business men interested to aid the railroads by the introduction of facilities for the handling of large cars on their private tracks. This may par- tially be the reason why the private tracks are built — at least, where considerations of competition prevail — usually by the railroads at their own expense, and that the railroads are frequently financially interested in the connected factories, etc. The advantage of heavy freight cars is not so certain for those railroads which do not carry heavy cargoes and freight in bulk. A promi- nent American railroad professional wrote to us concern- ing the steady increase in the carrying capacity of the cars in his administration: "There is, however, a limit of economy to be effected by this increase. I have ob- served a very large increase in the expenses for main- tenance and eqviipment, which is undoubtedly due to the greater capacity and weight of the equipment now in use." At any rate, one fact cannot be denied : the American railroads pay comparatively very low prices for their new rolling stock, while, as we are told, the uniformity of the construction enables the manufacturers to work economically and to sell at a low price. Railroad cars also can be manufactured on a large scale. If, according to this, more economical considera- tions may prevail in certain lines of the railroad system in America, the fact is demonstrated, especially by the detailed statements in the tenth chapter, that the total 423 expenditure for the management of the American rail- roads is not less than with us ; particularly expensive are, according to our observations, the internal traffic and the administration service, in the economical, organization of which we are superior to the Americans, notwithstanding all the supposed beaurocratic methods of a government administration. As regards our State railway system, we met, as we would like to insert here, with very remarkable views among American railroad professionals, which are not necessarily based on an aversion on principle, but which, however, give evidence, at any rate, of a total misconcep- tion of the real state of affairs. A prominent railroad professional gave it as his opinion, in a conversation with us, that the railroads of the United States had to con- sider competition as well as the stockholders ; with us, per- haps, only the political side of the matter came under con- sideration ; in politics the financial considerations were of no account. Under these circumstances it would there- fore be very easy to run a train, even when it did not pay for its cost. We pointed out against this particularly that our experts of agriculture, commerce and industry, which are represented in our railroad tariff commissions and councils, as well as our representatives in the legislatures, are enabled and entitled to pass opinions and give advice as to the actual requirements of the traffic of the country, at least as much as the stockholders of railroad companies. According to our judgment, which we have substantiated as much as possible by figures, in the chapter relating to traffic, our railroads serve indeed the traffic in a way which is by no means inferior to the traffic service in America. 424 To prove our assertion that the American railroads do not operate at less working expense than ours, the passenger fares and the freight rates must not be consid- ered alone. It would lead to false conclusions to do this. It is rather necessary, as is done in the preceding chapters, to consider the revenues derived by the railroads from both traffics as well as from all other sources of revenue. This is all the more necessary with American railroads because in that country, as has been remarked, an elimi- nation of large revenues has been manipulated so artificial- ly that it disturbs the correct proportion which is the nat- ural result of the relations of our institutions — a proportion which concerns the paying public as well as the railroads. While it is usual, in accordance with American con- ditions, for large related concerns to unite, apart from other reasons, for the purpose of a uniform administra- tion, the development of the railroads shows the opposite tendency in some fields of traffic; we mean especially the separation of those branches of business which are left by nearly all American railroads to the Pullman Company and to the express companies. If relations of this kind are not without objection from the purely administrative point of view alone, because the railroads cease, to a cer- tain degree, to be masters in their own house, it cannot be doubted that, on account of the necessary separate and complex organizations, the cost of administration of the entire traffic service is essentially increased. We at first vainly tried to ascertain why this has been done. With a people as practical as the Americans, the historical development alone could not have prevented the railroad companies to abandon this separation if it had proven to be less advantageous. There must, therefore, be other 425 reasons ; one will hardly go astray by assuming that the American railroads do not want to abandon this division of business in two or more parts, as intimated in the para- graphs treating of the relation of the railroads to the Pull- man and express companies. They leave it to those com- panies to exact their very high prices from the public and also secure for themselves substantial benefits by agreements. They unload, by this arrangement, on the Pullman and express companies burdens which, like special accom- modations for passengers and the package freight traffic, require disproportionately high expenditures in compari- son to the receipts, but they secure to themselves from these two traffic branches, directly and indirectly, special sources of revenue which are not open to us, as a matter of course, under our conditions. Who, however, pays the excessively high rates ? The traveling and trading public, to whom it makes very little difference at all whether the railroads or the other companies collect the bill. The railroads, it is true, seem to be of the opinion that great moral credit is due to them for not appearing openly in these transactions. Little different are the conditions concerning the reve- nues which the railroads derive in an incomparably higher measure than with us from the transportation of the mails ; the public is obliged to pay for this directly in postage charges, and, as far as these are insufficient, indirectly in taxes. RELATION TO THE PUBLIC WEAL. If merely the actual conditions were considered, then 426 these discussions could be extended also to the question as to what extent the revenues accruing to the railroads on both sides of the ocean return in the course of circula- tion to the parties from whom they originate — namely, the people as a whole. We have, however, to refrain from doing this, as such discussions would lead in the end to the question, with all its logical conclusions, whether gov- ernment or private ownership is preferable — a question which is, as we have pointed out, not as yet practical in the United States. (Compare the third chapter.) But apart from the question whether the railroads are the property of the State or of individual companies, they are, as public service institutions, in duty bound to operate in as safe a manner as possible and to do justice to the traffic requirements of the country without favorit- ism to single parties. These duties they have to perform at a price for their activities which does not injure but promotes the common weal, and which at the same time yields the legitimate profit due to the capital invested in the railroads. The railroad administrations have not succeeded as yet in all instances to meet these requirements. This may be the principal reason for the fact that the American rail- roads have not to this day become a homogeneous part of the American public and economic life, and that they are rather considered by a large part of the people as a thorn in the flesh. Our statements will show that the American railroads in general do not lack the intention to perform the task that is cut out for them. If the efforts in this direction have so far not been crowned with complete success, a large part of the blame must, perhaps, be placed upon 427 men forming a special element in American business life, and who have succeeded in exploiting the railroads to the detriment of the common good, especially by the unscrupu- lous use of existing conditions of competition for their own benefit to an enormous extent. To this must be added the fact that the expenses of the railroads in the United States are increasing rapidly. When it is further taken into consideration that large ex- penditures will have to be made for years to come, espe- cially for construction purposes, in order to serve the traffic with safety and promptitude, it is not to be expected that the railroads will be able to stand reductions in the receipts. In fact, the American railroad companies will be compelled to pursue a policy contrary to that of our government roads, which for decades have endeavored to reduce the freight tariff rates, by devising new means for the increase of their traffic receipts. As has been pointed out in the discussion on the freight traffic service, this is evident from the tendency to increase the freight tariff. An increase of the passenger fares will hardly be possible, because they are already very high, especially for the less favorably situated majority of the people, which influences materially the receipts through the greater number. It is well known that this class of the public travels at a considerably higher fare than with us ; and in connection with this it must be considered that the travel- ing expenses are in themselves higher than with us be- cause of the greater average traveling distances. Considered from a purely economic standpoint, it is true that a gradual increase of the freight tariff would not be detrimental to American conditions as it would be with us. America can rely for a long time to come upon the sale 428 of its products in its home market, even when the com- modities are made dearer through an addition to the freight rates. This is not so in Germany, where the labor- ing class forms a very large percentage of the population, and its large increase causes only a comparatively small increase in the power of consumption of the products of the country. Germany is therefore compelled to export on a large scale, because this is the only way to procure work and food for that part of her population which would otherwise become superfluous, and to prevent it from emigration, Freight rate increases, however, would mean for Germany a decrease of her exports, the preser- vation of which is a necessity for her existence. As a fact, the freight rates of the Prussian State railways ad- ministration have for the last twenty-five years shown a decidedly decreasing tendency, and if all signs do not de- ceive us, further reductions of freight rates are in pros- pect for some time to come, and under no circumstances higher rates. The American producer cannot count on this. He will be compelled, as conditions have developed with the American railroads, to submit to the unavoidable gradual increase of freight tariffs, for the primary reason that the otherwise inevitable disturbance would cause a new economic reaction on the railroads, which would naturally have also a direct effect upon industry and trade. The burden imposed upon the American people by a further increase in the freight rates could be alleviated if a possibility were to be found meanwhile to make the tariff' policy of American railroads more stable and uni- form. The lack of stability, clearness and justice in this field is still exerting a large influence in America. The 429 comprehensive amalgamations into great railroad systems have certainly had the beneficial result that the changes by leaps and bounds formerly so common in the tariff pol- icy have been somewhat diminished and become less radi- cal ; instead of this, evils in other fields have become all the more evident, and the "physician" has not yet been dis- covered who can effect a cure by means of the only way making it possible : by a submission of the railroads under the law in accordance with American conditions. (Com- pare the third and eleventh chapters.) It would, however, be unjust to the American rail- roads, from the viewpoint of an unbiased examination, if the admission were denied them that, taking it all in all, they have made essential progress in their financial and economic policy. It is not the purpose of this report to serve in an advisory capacity to the public looking for investment in American railroad securities. If heretofore the lack of confidence in the American railroads, because of their de- fective management and financial policy in general, was not without justification, the conditions have changed in every respect, in so far as it would no longer be fair to judge all American railroads alike; there are, as pointed out before, good administrations and others not so good, well paying and poorly paying railroads. The same con- ditions prevailed with us at the period of private railroads, although the tendency toward the inferior side was not so strong in Germany as in the United States, especially in former years; nor could it be for various reasons — it was prevented, in part, by the State regulations. Crises like those which the American railroads experienced in the years 1873, 1883 and 1893 would not have been possible 430 to that extent in Germany, not even at the time of the private railroads. That the conditions have also improved in the United States is evident from the fact that the end of the decade after the last crisis has passed without any material disturbances, and that, if all signs do not deceive, new troubles will not occur within a conceivable time. Undoubtedly the combinations into great railroad systems have also acted favorably, in so far as tariff wars to the extent formerly known cannot break out so easily in the future. As is well known the American railroads, in contra- distinction to our private railroads, have been built prin- cipally from the proceeds of bonds issued at the start and not from the capital stock. The shares of many roads were in the beginning, as mentioned before, given to the con- structors of the road or to other interested parties, as well as to the purchasers of the bonds, as almost without value — fr,equently gratuitously, in the form of a so-called bonus. The reason for the financial failure from which many railroads in the United States had to suffer from the be- ginning (and some suffer still) is partly to be ascribed to this action. This is the so-called watering of stock, which was practiced not only in relation to the common shares. but also frequently extended even to the bonds, whicli were, as a rule, not issued gratuitously, but far below their face value. At best these transactions were promissory notes on the future, and in most cases had to wait very long before they were redeemed ; in fact, all of them have not been redeemed up to the present time. It must be acknowledged, however, that the various financial reorganizations have acted favorably in this 431 direction; they have mostly purified the bond issues, but seldom the common stock, either by merging the different issues, and thus reducing the capital, or by adding new capital to the enterprise by actual assessments from the stockholders, or finally by reducing the high rate of interest. All this does not preclude, however, that at least the shares, even of the well-administered railroads, are still subject to temporary fluctuations which may involve very material losses to their owners. The fluctuations in the market value of common shares do not justify, offhand, a conclusion for or against the character of an administration ; they belong mostly to that class of values which are used for one reason or another by stock manipulators for speculation purposes. Analo- gies for this are found in our industrial securities; they also are subject sometimes to considerable fluctuations, although the enterprises are conducted in an exemplary manner. Those who buy such values must be aware of the risks which they run ; they have no right to hold the com- pany responsible for losses. Essentially different are the conditions of the bond market. The bonds of the great administrations, as well as of those railroads which belong to them and to the great railroad systems and groups, or which at least stand in permanent financial relations to them, have developed gradually into investment values which in general are recognized as safe securities. It is known that they con- stituted formerly for those European elements which were looking for a higher rate of interest than the one cus- tomary in their own country, a much sought for invest- ment for capital. This has changed since. The securities 432 have in the main migrated back to the United States, the best proof that the Americans have more confidence, espe- cially in the financial development of their railroads, than formerly. The good American railroad securities have receded in their rate of interest in the same proportion as the American national wealth has increased, so that in this regard the diflference between them and European securities — in particular, German securities — is to-day not very large. GENERAL CONSIDERATIONS IN CONCLUSION. What follows from all this for us, our own conditions, and our relations to the United States on the whole? Single institutions upon the* field of railroading have been compared with each other in these deliberations in order to show the divergency in the conceptions of both countries in regard to conditions of life, views of life, etc. ; special questions were discussed to demonstrate the varia- tion in their solution on this and the other side of the At- lantic; but to pronounce judgment involving all manifesta- tions of this life, based on a comparison of all conditions, is not possible, for the very reason that the railroads of both countries have grown up on a basis of a completely different nature, and were, therefore, bound to enter upon a different course in their development. If Germany, like the rest of the civilized nations of the Old World, has grown stronger and gained new life through the construction of railroads, the United States — at least, what we include to-day in this designation in re- gard to economics, politics and culture — ^have been actually created, properly speaking, by the building of railroads. 433 In conformity with the development of the whole country the railroads have grown up on a national foundation, and reflect, as hardly any other institution in the country, a true picture of the growth of the nation. If the railroads have, nevertheless, not become nationalized, as formerly pointed out, if they have not become an organic part of the nation, this is again only a consequence of the evolution of the national and economic conditions of the country itself, which did not up to the present time permit such an amalgamation, even if the railroads had contributed more to such a movement. The development of the country has followed a somewhat impetuous course ; the youthful body has grown up too rapidly without, at the same time, matur- ing harmoniously in all parts. Such growth must leave weakness which must be overcome before full vigor can be attained. At the same time the danger must not be underestimated, which consists in the fact that youth, in the full realization of almost unlimited strength, makes too exhaustive demaiids on the body. The period of develop- ment must in a way be regarded as a time for husbanding and replenishing strength, and the sooner this is recog- nized the better the body will thrive in the end. No one who has had occasion, as we had, to cross this great country from ocean to ocean can be left in doubt that here is a youth of already almost heroic proportions and destined to grow to a giant and to accomplish great things in this world. This country is not alone rich in mineral and agricul- tural wealth of all descriptions like scarcely any other on earth; it is also favored in an extraordinary way by its climatic conditions as a whole. Furthermore, it was opened to exploitation— and that, in most parts, for the 434 first time — at a period in which technical knowledge, espe- cially that directed toward the unearthing of treasures of all kinds and their utilization, had reached a perfection never before known or anticipated. A youthful and ener- getic people which is eminently qualified, owing to its composition, for productive activity is called upon to ex- ploit this wealth. It is the result of a mixture of races whose every single constituent part has contributed at least one good trait, and which, as a whole, has improved in excellence by and through their amalgamation. It appears almost useless to especially point out here that the portion the Germans have contributed and still contribute is not the least important constituent part which the American nation has assimilated and still as- similates. We call attention with satisfaction to the fact that this is recognized in America, and we will not com- plain, therefore, if our German individuality is absorbed by Americanization perhaps somewhat more fully than can be desired from the German national standpoint. Without being outwardly recognizable, this German in- dividuality continues to live, according to its strength, in a latent form in the American nation. It is in accord with human nature that weak points are not missing. Not the least of them is that the youthful giant is exposed to the temptation to underestimate all things normal, for the very reason that they do not equal his own wealth in external resources. This explains many an extraordinary phenomenon especially apparent in our relations to America in a way which is all the more strik- ing, as we Germans suffer in many regards still from weaknesses of the opposite kind brought down from the time when the country was split up into many parts and no 435 national feeling existed, and the economic confusion caused by it. The earlier and to the greater degree that we free ourselves from these characteristics, which are not exactly worthy of a great nation, the more natural and the more practical will our relations to America become, the more clear will be our judgment of this country, and the more quickly will the Americans be cured of their inclination to exaggerate their own relative worth. It is the merit of a number of able, experienced men, equipped with general and mercantile information, to have pointed to the powerful development of the United States and to have made accessible their comprehensive observa- tions to large circles. The problem before us now is to test more and more the conditions of the several industries and to study them with the professional eye, in order to ascertain, by comparison with our own conditions, in what respects we are behind, where we can learn, and where, on the other hand, the weak points are which we have to attack, so as to be able to compete. The discussions in the appendix to the eighth chapter demonstrate — ^principally in so far as the cost of purchase on both sides is in question — that the German iron and cotton industry can well hold its own against America. If conditions are such in these branches of production in which nature has favored America as compared to us, an advantage in other fields in which this is not the case is all the less to be expected, apart from the fact that great wealth in accordance with human nature involves dangers in itself. The magnitude of the task confronting the country and its inhabitants, the vast resources that were and still are at their command, have produced large-minded men 436 who like to turn their backs on all that is mean and small ; in this, above everything else, are to be found in part the reasons for the great success which the country has unques- tionably accomplished in almost every branch of economic activity. So long as new fields are opened, new treasures are discovered, these qualities of the American, combined with his intelligence and strength, must secure for him complete success in the future. But what will happen when — as is to be expected sooner or later, considering the intense exploitation of the wealth of the country — the cream, so to speak, has been skimmed off ; when the minor work begins ; when the necessity arises to manage the bal- ance economically because the abundance will soon be ex- hausted? This is a question which obtrudes itself upon every intelligent observer who witnesses the manner of American economical management. This is evident in the treatment of the wealth of the soil and of the soil itself, of the forests, and of many other things ; this goes so f ar that at the present time iron mines are not considered worth working where the percentage of the ore would be consid- ered with us as still productive of a fair margin of profit, not to speak of the exploitation of other wealth of the soil frequently approaching destructive waste, and the ruinous neglect of the forests amounting to devastation. Such operations cannot fail to lead to a period of time, perhaps not so far distant, when the American will have to reckon with conditions similar to ours. The tech- nical auxiliaries at present at command, and the new ones continually evolved, will only hasten the process of depre- ciation, so that one has to figure now with much shorter intervals of time where formerly centuries were the proper 437 basis for calculation. Will the American people then be equal to altered conditions? The impulse toward the unlimited, which at present constitutes the strength of the American nation, is hardly likely to prepare them in a proper manner for such condi- tions or to develop the qualifications demanded by them. It is obvious that the American people lacks them still to-day. Here is the weak point, which appears quite natural, in view of the qualifications constituting the strength of the American. To give an example. In the field of decora- tive art, in the art industry, and in all work that requires handicraft, America is now, as before, dependent on for- eign countries. In these lines it cannot compete because, considering the almost prohibitive price of human labor, it has to count, in the main, upon machine work, with all its advantages and defects. All improvements in this direction within conceivable time seem to be excluded, just as the labor conditions in the United States, although the Social Democratic party has not gained a preponderant influence, form in general one of the darkest spots in the economic life of the New World. The labor unions fetter the industries with an iron chain and do not permit rapid progress. The mil- lions of days of labor which they lose year by year do not allow even the captain of industry, with a firm purpose in view, to make calculations, even approximately safe, for a prolonged period. A similar disadvantage results from the vtncertaintv caused by the short term of office of the President of the United States. This uncertainty, as experience teaches, 438 begins to exert a general pressure on the entire business world about one year before every national election, and disappears gradually only after the election has taken place. Finally, the difficulties must not be overlooked which continually arise for the economic life from the negro question, which is by no means solved definitely. Taking it all in all, for the economic life of the United States in general hardly anything else can be accepted as true than what we have demonstrated more particularly in regard to their railroad system : it has, like everything else in this world, its bright and its dark side. 439 PUBLICATIONS AND BOOKS CONSULTED Baker, Ray Stajinard: The Railroad Rate. In "McClure's Magazine," No- vember, 1905. Blum : Railroad and Other Traffic Institutions in North America. Lecture at the Society for Railroad Science, 1904. Bonham, John, M. : Railway Secrecy and Trusts. New York and London, 1902. Calwer, Richard : The Economic Year 1904. Yearly report regarding the la- bor and economic markets. June, 1905. Carnegie, Andrew: The Empire of Business. London and New York, 1903. Clark: State Railroad Commissions. Baltimore, 1891. Cowles, James Lewis: A General Freight and Passenger Post. New York and London, 1902. Dorner: North American Railroads. Lecture at the Society of Manufac- turers, at Cologne, 1904. Etienne, Dr. August: The Cotton Question from the Standpoint of German Interest. Berlin, 1904. Fink, Henry: Regulation of Railway Rates. New York, 1905. Franke, G. : Remarks about the Freight Tariffs of the United States of America, 1904. Goldberger, Ludwig Max; The Land of Unlimited Possibilities. Berlin, 1903. Goldberger, Ludwig Max : The American Peril. Prussian Year-Books, April 1905. Gotiiein, Georg : The German Foreign Trade. Berlin, 1901. Gutbrod, Fr.: The World's Exhibition in St. Louis, 1904. The Railroad Traffic Systems. Journal of the Association of German Engineers, 1905. Hadley, Arthur Twining : Railroad Transportation, its History and its Laws. New York and London, 1903. Haines, Henry S. : Restrictive Railway Legislation. New York, 1905. V. Halle, Dr. Ernst : The Re-regulation of the Commercial- Political Relations to the United States of America. Prussian Year-Books, October, 1905, pages 33—68. V. Halle, Dr. Ernst: America. Hamburg, 1905. Hendrick, Frank: Railway Control by Commissions. New York and Lon- don, 1900. Jeans: American Industrial Conditions and Competition. London, 1902. Johnson, Emory R. : American Railway Transportation. New York, 1903. Kirkman, Marshall M.: Basis of Railway Rates, etc. New York and Chi- cago, 1905. Knapp, Martin A. : Government Ownership of Railroads. Reprint from An- nals of the American Academy of Political and Social Science, 1902. 441 V. Knebel-Doeberitz, Hugo: Is There an American Danger for Germany? Berlin, 1904. V. d. Leyen, Dr. Alfred: The North American Railroads in Their Economic and Political Relations. Leipzig, 1885. V. d. Leyen, Dr. Alfred: The Financial and Traffic Policy of the North American Railroads. Second edition. Berlin, 1895. Macco : Raw Materials and the Freight Conditions of the United States. In "Steel and Iron," 1903, No. 10. Macco : Report of a Study Trip to the United States of America. In "Steel and Iron," 1904, Nos. 2 and 3. Meyer, Prof. Balthasar Henry: Railway Legislation in the United States. New York, 1903. Meyer, Prof. Hugo Richard: Government Regulation of Railway Rates. New York, 1905. Noyes, Walter Chadwick: American Railroad Rates. Boston, 1905. Oppel, Prof. Dr. A. : Cotton, its History, Cultivation, Use, etc. Bremen, 1902. Paine, Charles: The Elements of Railroading. New York, 1895. V. Polenz, Wilhelm : The Land of the Future. Berlin, 1903. Poor's Manual of Railroads. New York, 1904. Pratt, Edwin A.: American Railways. London, 1903. Priestley, Neville : Report on the Organization and Working of Railways in America. London, 1904. Riebenack, M. : Railway Provident Institutions in English-Speaking Coun- tries. Philadelphia, 1905. Roosevelt, Theodore: Americanism. Fifth edition. Leipzig, 1903. Russell, Charles Edward: The Greatest Trust in the World. New York, 1905. v. Schkopp, Eberhard: The Economic Importance of Cotton in the World's Markets. Vol. v. Berlin, 1904. Snider, William L. : The Interstate Commerce Act and Federal Anti-Trust Laws. New York, 1904. Sombart: Studies on the Development of the North American Proletariat Archives for Social Science and Social Politics. Tubingen, 1905, page 556. Spearman, Frank H. : The Strategy of Great Railroads. New York, 1905. V. Unruh: America Not Yet on Top. Frankfort-on-the-Main, 1904. Vanderlip, Frank A.: America's Invasion of Europe's Industrial Spheres, Berlin, 1903. Wlard, Edward G., Jr. : Milk Transportation. Washington, 1903. West, Jul. H. : America versus Europe. Berlin, 1904. Wiedenfeld : The Grain Trade and the Railroads of the United States. Archives for Railroadism, 1901, page 80. Wiedenfeld: The Concentration Movement of the Railroads of the United States of America. Archives for Railroadism, 1903, page 1199. Wilson, William Bender: History of the Pennsylvania Railroad Company. 2 volumes. Philadelphia, 1899. Woodlock, Thomas F. : The Anatomy of a Railroad Report and Ton-Mile Cost. S. A. Nelson, New York. 442 INDEX Accidents, 94; statistics of, lOG, 107, 108. Accomplishments of American Rail- roads, 411. Accounting and Bookkeeping of Tick- ets, 259; of freight, 299; separate, 365. Accounting Department, 149. American Academy of Railway Sur- geons, 137, 222. American Railway Association, 138. American Railway Engineering and Maintenance of Way Association, 136. Architecture, uniformity of, 63; of stations, 104. Armour & Co., Chicago, 28. Arrival in New York, 17. Association of Train Dispatchers, 136. Atlantic Coast Line, 112. "Atlantic Express," 41. B Baggage Traffic, 262. Baldwin Locomotive Works, Phila- delphia, 55. Baltimore, Md., 53. Baltimore & Ohio Railroad, central office, 53; relief funds, 219; pension fund, 220. Big Four Route, 110. Bills of Lading, 297. Block System, 98, 99. Board of Directors, 140. Boston and Albany Railroad, 110. Boston, Mass., 23. Buildings, 167. Buffalo, N. Y., 24. Brotherhoods, 202. Budget, 359. Capitalization, 286. Car loads, 304; service, 310; time for use of foreign, 313; carrying ca- pacity of, 317. Carnegie, Andrew, 25. Carnegie Works, 25. Central administration, 143. Central Railway Clearing House, 301. Central Traffic Association, 129. Chicago and Alton Railroad, 113. Chicago and Northwestern Railroad, 110. Chicago, Burlington and Quincy Railroad workshops at Lincoln, Neb., 45, 112. Chicago, 111., 26. Cleveland, Ohio, 51. Colorado and Southern Railroad, 114. Combinations of different depart- ments, 128. Companies, railroad, 109. Comparisons of American Coaches and German Cars, 69; of even and alternate joints, 78, 81; of speed, 83, 84, 86, 87; of time-tables, 88; of station management, 92; of ac- cidents and irregularities, 94, 95, 96; of dining car service, 100; of station architecture, 104; of acci- dent statistics, 106, 107, 108 ; of sal- aries and wages, 192, 193, 194; of total number of employees, 206, 207, 208, 209, 210, 211 ; of railroad sur- gical service, 232; passenger fares, 244; of accounting, 260; of bag- gage traffic, 266; of freight rates, 269, 270, 271, 272, 273, 274, 275, 276, 277, 278, 279, 280, 281; statis- tical freight rates, 282, 283, 284, 285, 286, 287, 288, 289, 290, 291; 443 post office charges, 285, 286; of capitalization, 286, 287; of account- ing of freight, 299, 300, 301, 302, 803, 304; of shipping (carloads, etc.), 304, 305; time for use of cars, 314, 315, 316; of car carrying capacity, 317, 318, 319, 320, 321 ; of transportation charges for ores, 322, 323, 324, 325, 326; of trans- portation charges for cotton, 327, 328, 329, 330; of transportation charges for milk, 330, 331, 332, 333, 334, 335, 336, 337, 338, 339, 340; re- lations of railroads to post office, 341, 342, 343; of budget, estimate, reports, 339, 360, 361, 362, 363; of economic control, 364; of separate accounting, 365, 866, 367, 368; of supplies, 375; ratio of receipts and expenditures, 380, 381, 382, 383, 384, 385, 386, 387; of dividends, etc., 892, 393, 394; duties and ac- complishments, 412; operative in- stitutions and plants, 417; financial development and situation, 420; as a public institution, 426; general comparison, 438. Compartment cars, 70. Concentration of administrations, 109. Control of tickets, 258. Controllers' Association, 136. Crossings not properly guarded, 97. Cotton Belt Route, 113. Cotton transportation ; charges of, 327. D Delaware and Lackawanna Railroad, 113. Denver and Rio Grande Railroad, 113. Denver, Col., 42, 44. Disciplinary measures, 197. Dispatch of trains, 88, 93, 94. Dining cars, 101 ; service, 101, 102. Dividends, 388. Duties of American railroads, 411. E Economic control, 864. Elevated railroads of New York, 21. Employees, 179. Engineering department, 161. Erie Railroad, 11, 21. Estimates, yearly, 359; building, 368. Express companies, traffic, 383; re- lations of railroads to, 351. Ferry service of New York, 22. Field, Marshall, Chicago, 111., 37. Financial management, 375; develop- ment and situation, 420. Fink, Albert, 131. Flyers, 84. Forest fires, 36. Freight, ferries, 22; traffic associa- tion, 129; rates, 269; statistical rates, 282; favors, 291; train speed, 309. Freight, statistical rates, 282. Galena Signal Oil Co., 373. General office, 146. General Time Convention, 133. German railroad, exhibit of a, 49. Gould group, 113. Government ownership, 119. Great Northern Railroad, 20, 31, 112; profit sharing of employees, 225. Grosscup, Judge, Chicago, 404, 405. Guide-book, 253. H Harriman, E. H., 20, 115, 116, 121; group, 112. Hawley group, 113. Headway, 91. Hill, James J., 20, 81, 181 ; Louis, 31, 202; group, 112. Hocking Valley Railroad, 111. Hospital treatment, 222. Hospitals, 224. 444 Illinois Central Railroad, 70, 113; profit sharing of employees, 225. Illumination, 76. Imperial Guide-book, 254. Information bureau, 93. International and Great Northern Railroad, 113. Inspection bureau, 131. International Association of Car Ac- countants and Car Service Officers, 136. International Association of Railway Surgeons, 137, 222. Internal organization, 139. Interstate Commerce Commission, 52, 130, 311, 400. Insurance department, 167. Iowa Central Railroad, 114. Itinerary, 58. J Joint committee, 128. Joints, 81. K Kanawha and Michigan Railroad, 111. Kansas City, Kan., 46. Katy Route, 113. Knapp, Martin A., 406. Labor Day, 25. Labor unions, 200. Lackawanna Steel Works on Lake Erie, 24. Lake Shore and Michigan Central, 110. Legal department, 165. Lehigh Valley Railroad, 111. Libraries, 225. Lighting of cars, 76. Lincoln, Neb., 44. Loading and unloading time, 310. Loan funds, 222. Long Island Railroad, 113. Loree, L. F., 118. Louisville and Nashville Railroad, 112. M Master Car Builders' Association, 136. Mechanical devices, 67. Merchandise, freight, 306. Mergers, railroad, 115. Meyer, Professor Dr., Chicago, 279, 331, 332. Michigan Central Railroad, 110. Milk, cost of transportation, 330. Milk transportation, 332. Mileage, total, 109. Minneapolis, 31. Minneapolis and St. Louis Railroad, 114. Missouri Pacific Railroad, 113. Monon Route, 112. Morgan, J. Pierpont, 111; group, 110, 111. Moseley, Edward A., 406. Motion of cars, 79. N Nashville, Chattanooga and St, Louis Railroad, 112. National Association of Railroad Commissioners, 119, 120. National ownership, 119, 122. National Ticket Agents' Association, 253. New Jersey Central Railroad, 111. New York Central and Hudson River Railroad, 56. New York Central Group, 110. New York, Ontario and Western Railroad, 114. Niagara Falls, 24. Nickel Plate Railroad, 110. ■" Norfolk and Western Railroad, 111. "North Coast Limited," 82, 35. Northern Pacific Railroad, 35, 112. Office appurtenances, 177. Office routine, 170. Offices, 167. Official Classification Committee, 128. 445 Operation, 83. Operative institutions and plants, 417. Oregon Railroad and Navigation Company, 113. Oregon Short Lin% 113. Ores, cost of transportation, 322. "Overland Limited," 41. Overland tour, 25. Ownership, national or government, 119. Parsons, Kan., 46. Passenger fares, 243. Pension fund, 220. Pennsylvania Railroad, central oflSce, Philadelphia, 54, 110; absence of personal element, 117; relief funds, 217. Pennsylvania Railroad (east of Pitts- burg) relief funds, 216. Pennsylvania Railroad (west of Pittsburg) relief funds, 218. Personal service, 100. Personality of ofificials, 117, 118. Philadelphia and Reading Railroad, 111. Philadelphia, Pa., 54. Physical ability, 184; tests, 184. Pittsburg, Pa., 25, 50. Portland, Ore., 37. Post office, payments, 285; relations of railroads to, 341. Private cars, 295. Profit sharing of railroad employees, 225. Public institution, railroads as a, 426. Pullman cars, 70, 71, 72, 74, 75, 76, 77. Pullman system, relations to rail- roads, 344. Pullman Works, Chicago, 30. Punctuality, 85. Purchasing department, 162. Raft traffic, Minneapolis, 31. Railroad physicians, 822. "Railroad Physicians and Railroad Hygiene in North America," lec- ture, 232. Rails, 80. Railway Equipment Register, 136; provident institution in English- speaking countries, 215; ticket pro- tective bureau, 250. Ratio of railroads to population, 376. Real estate department, 166. Receipts and expenses, 380; ratio of, 383. Receiverships, 378, 379. Regulations for officers and em- ployees, 182. Relief funds, 216. Reports, monthly, 360. Restaurants, 105. Rest periods, 194. Riebenack, Max, 215. Rio Grande and Western Railroad, 113. Rockefeller-Gould Group, 113. Rock Island System, 114. Roosevelt, Theodore, 119, 402, 403, 404, 406. Safety devices, 98. Salaries, 189. Sale of railroad tickets, 257. San Francisco, Cal., 39. Savings funds, 222. Scalpers, 245. Schedule, 88; accidents due *o irregu- lar schedule, 95. Service of railroads, 68. Shasta Route, 38. Skyscrapers, 62. Southern Classification Committee, 128. Southern Pacific Railroad, 38, 112; railroad surgeon organization, 232. Strikes, 200, 201. Southern Railroad, 41, 112. "Special, The," 84. Speed, 83. Spokane, Wash., 36. State control and supervision, 395. 446 Station management, 91 ; architecture, 104. Steel Trust, profit sharing of em- ployees, 228. Stockyards, Chicago, 28. St. Louis, Mobile and Ohio Rail- road, 112. St. Paul, Minn., 31. Street railroads, electric, 65. Street traffic of New York, 20. Subterranean electric freight rail- roads, Chicago, 27. Summary, 433. Supplies, purchase and. control, 370. Swift & Co., Chicago, 27. Switchboards, 100. Tacoma, Wash., 36. Technical Association, 133. Telegraph companies, 351. Terminal companies, 123. Terminal Company of Boston, 23. Texas Pacific Railroad, 113. Tickets, form of, 250. Ties, 80. Time-tables, 88, 89, 90, 91, 252. Toledo and Ohio Central Railroad, 111. Toledo, St. Louis and Western Rail- road, 114. Tourists, quality of American, 33. Traffic department, 154. Train dispatcher, 89. Transfer tickets, 64. Transportation department, 157. Treasury department, 147. Trunk Line Association, 129. "Twentieth Century Limited," 84. U Uniform bill of lading, 298. Uniformity of buildings, etc., 61. Union Depots, 128. Unions of officers and employees, 199. Union Pacific Railroad, 41, 112; or- ganization of railroad surgical service, 232. Vanderlip, Frank A., 20. W Wabash Railroad, 113. Wages, 189. Ward, Edward G., Jr., 332. Washington, D. C, 52. Waterways, decline of, 50. Way bills, 297. Way cards, 298. Welfare institutions for the general benefit of railroad employees, 213. Western Classification Committee, 128. Western Maryland Railroad, 113. Wheeling and Lake Erie Railroad, 113. Work, regulation of, 196. Working hours, 194. World's Fair, St. Louis, Mo., 48. Vazoo and Mississippi Railroad, 113. Yellowstone Park, 32. Young Men's Christian Association (railroad branches), 56, 229. 447 £^Sg^S^^^£^S«^g^ rosraF^jvSJt-sy-* i$4';^ii '•t? 5" ''' ^J^» tm