James Shirley Eaton.

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tures is given over to a department. The administration of this
department, the expense of which is called " Superintendence,"
involves the planning of current work; the organization of the
forces into working units ; the making of pay rolls ; the requisi-
tioning and accounting for material and for tools and supplies;
the checking of performance ; the enforcement of discipline. In
addition to this it includes the higher function of evolving stand-
ards of practice, designing particular structures and installa-
tions, solving local problems, and devising general policies. To
have such service the railroad must employ an organization of
officers, furnish them a staff of clerks and assistants, and provide
for all incidental office expense. These natural first designations
of the total expense, in reality constitute a fundamental group-
ing. The salaries of the officers is a less flexible item of expense
than the salaries of the staff, and the salaries of both officers and
staff, less flexible than the expenses of their offices.

Under " Pay of Officers " is included the pay of all those
employees in the department called officers. Such designation
embraces those who exercise authority over subordinates, rang-
ing from the vice-president (if he has direct charge of the
department) to the assistant master carpenter or supervisor. It
embraces the professional expert such as the architect or the
special engineer, but draftsmen, rodmen, transitmen and chain-
men are classified as "Clerks and Attendants," under the primary
account of " Superintendence." Section foremen, bridge gang
foremen, and M. of "W. and S. shop foremen are not included in
11 Superintendence " at all, their wages being charged to the
expense of the work done. This disposition of the wages of the
minor foremen is obviously upon the theory that these men are
in effect leading workmen, and except for a slight added function
of responsibility to plan locally and execute, are practically


workmen. The account " Superintendence " does include semi-
official staff men/ such as fire and sanitary inspectors, classifying
them as officers. Part of the function of those designated as
officers is to set up a nominal class distinction which serves as an
incentive by which the whole organization is stimulated and
made to cohere. In the case of the gang leaders this distinction
is negligible, and therefore these employees do not fall into the
class of officers.

With the officer goes his staff of clerks and attendants. A
staff is limited to that body of men, who, as it were, extend the
personal reach of the individual officer, performing the multi-
farious detail which he himself would do personally if he were
able, such as making records, handling correspondence, com-
piling local office pay rolls, accounts and statistics, assisting the
engineer as draftsman, rodman, transitman or chalnman. With
the recognized working force of personal assistants goes also the
regular staff of personal attendants, such as porters, waiters and
servants, whether in the office or on the private car.

The salaries of officers is very much of a fixed expense.
Should the officer irregularly be of service to other departments,
this would not disturb the disposition of his salary, and other
expenses to this account. But should he be regularly assigned
to supervision of one* or more departments the burden of carry-
ing him is shared equally among the departments served.

In case of employees, a different principle is involved: their
salaries are not so fixed an item of expense, and therefore when
engaged in work not chargeable to M. of W. and S., their pay
and expenses are charged to the specific work on which they are

The foregoing is limited strictly to labor; all other adminis-
trative expenses of every nature (except stationery and print-
ing, which has an account of its own) are embraced in " Super-
intendence " under the sub-classification of " Office and Other
Expenses." Primarily this sub-account is for supplies and


travelling expenses, rent of telephone and office, expense of heat,
light, water, ice and any special service as telegraphy, messenger,
office laundry, and for cleaning office when not performed by a
regular employee.

Expenses are cash disbursements for account of the admin-
istration of the department, and do not include proportionate
charges for the use of offices or equipment owned by the com-
pany, or any other part of the plant of the company, or the
maintenance of such plant. But if the use of the facilities
involves a cash expense, such rent charges are a part of this
item. With the supplies go also furniture, drafting and engi-
neering instruments, reference books, subscriptions to news-
papers and periodicals, also premiums on fidelity bonds of those
whose wages are charged to this general account.

Comment: It is inconsistent to disallow a charge for the use
of any part of the railroad's plant, when similar service, if paid
for on a rental basis, is charged to this account. The use of an
office building or a private car is practically the same whether
these facilities are owned by the railroad and furnished to the
department, or hired by the department from outside parties.
So far as there may be differences as between different roads in
the matter of company facilities for the M. of W. and S. offices,
plainly any comparison of the " Office and Other Expenses "
item of this account of " Superintendence " is so far misleading.

2. " Ballast." Ballast is the dressing of the roadbed. It pro-
vides a base for the tie, and surface for the roadbed at the same
time. In some form ballast is present on every roadbed, barring
only the crudest conditions of railroad operations. It may be
but a light dressing of cinder or sand, or it may be gumbo, chats,
gravel, slag or broken rock. It varies in depth from a few
inches to a foot and a half. Because it is a universal feature of
a railroad, and because it is distinct from the roadbed on which
it is placed, and from the tie and track structure resting upon it,
ballast is a proper head of classification. It differs from these


in cost, in the methods of applying it, and in the determining
r conditions of renewal.

On many roads ballast formerly was not a part of the con-
struction specifications. After the road was put into operation,
the maintenance department gradually worked over its roadbed
as it settled and put in the ballast. Because the work was at no
time ddne completely, the expense being defrayed by earnings,
it was always going on. Generally sand or cinder served as a
first makeshift, and then perhaps followed more permanent
material, but not to standard depth. In connection with these
progressive stages of work there was a constant deterioration
due to submergence in the roadbed, to 'washouts, to the process
of pulverization. In case of slag especially the waste by pul-
verization is enormous. Under these conditions ' ' ballast ' ' work
was heavy during years of large earnings and was light in the
periods of lean earnings. With the later classification of the
I. C. C., the Additions and Betterments accounts absorb all such
changes in the standard of the property, due to increases in
yardage of ballast in place. But reballastmg with stone, track
originally ballasted with cinder, is not considered Additions and
Betterments (Case 434). The only arbitrary variations in the
account now remaining are those arising from the rate of
renewal, in common with most of the M. of W. and S. items, and
betterment by replacing cheap ballast with expensive ballast.

Ballast expense is the expense of the material delivered,
including the first unloading. The expense of distributing and
applying ballast is charged to " Roadway and Track." In
computing the cost of ballast, there are added to the purchase
price of the material all freight charges of foreign roads, the
labor and supplies expense of a ballast train, delivering the
material, and the expense of unloading. In case the ballast is
taken from a gravel pit or ballast quarry which the road acquires
for this purpose, the cost and development of such pit or quarry
go into the cost of the ballast taken out.


If a ballast pit or quarry is to serve for a long time, in order
to carry over its entire expense to all the units of ballast ex-
tracted, a clearing account must be opened and continued open
as long as the pit or quarry is in use. To such account will be
charged all development expense, cost of special plant devoted
to this development, such as (a) in case of land, first cost less
estimated value after ballast has been removed; (6) in case of
rail and fastenings, the excess above scrap value, and on all
other material besides rail, full value, on the theory that once
used it has no scrap value; (c) in case of large tools, such as
stationary engines, steam shovels and stone crushers, their
repairs and depreciation (but not their first cost which is
charged to Property account). All expense of labor, material,
supplies and hand tools, whether for prospecting, developing,
installation, or actual quarrying, crushing and transporting is
necessarily included. Any disarrangement of existing con-
ditions to open a quarry or pit, such as clearing, stripping,
draining or ditching the land, or the installation and operation
of an interlocker plant or switch at the point of the main line
where the ballast track digresses, is a part of the ballast under-

The whole intent of the account is to include all values
devoted to the production and delivery (but not the distribu-
tion) * of the ballast, hence some of these which cannot be
exactly known during all stages of the work should be estimated.

As ballast may be a by-product of some parts of the railroad
operation it is specified that the ballast value at one point as a
by-product shall not bear the expense of removing it as a waste
at another point. Thus the expense of loading cinders at the
engine house to be used as ballast is charged to " Engine House
Expense" and not to "Ballast" (Case 163).

Comment: The classification is vague in defining delivery
expense. Cost of preparing, loading and " first unloading " are
* See Comment,


specified as part of " Ballast," and the first unloading of ballast
is generally the only unloading; in fact it is frequently the
actual distribution. If such first unloading is included, it is
natural to suppose that the work train expense up to that point
is included also, but this is not clear.

The stability of ballast depends so much on the kind of
material used and the depth and foundation on which it is laid,
that we believe " Ballast " should be classified according to the
material used and subdivided into at least two items, or better
three, according as it may be under 8 inches, or 9 to 14 inches,
or over 14 inches in depth.

If repairs and depreciation of specialized plant are charge-
able to this account, we see no reason why the work train equip-
ment engaged in the distribution of the ballast is excepted. The
argument that the latter equipment is available for other uses
at other times does not take note of the fact that the wear and
deterioration while in this ballast service do not serve those
other uses.

In the case of ballast charged to Additions and Betterments
" Ballast " is made to bear an equipment hire expense. If
such a charge is justifiable in the case of Additions and Better-
ments, we believe it to be equally justifiable when the ballast is
an item of expenses.

In making a distinction between ballast which is Replace-
ment, and ballast which is Additions and Betterments, it has been
ruled that the cost of ballast up to the point of restoration of
the original yardage is Maintenance, and all in excess of the
original yardage is Additions and Betterments, regardless of any
betterment that there may be in the kind of ballast used. We
believe that the definition of " Betterment " (Cases 148, 297,
434} should be based upon quality as well as quantity in order
to conform to the I. C. C. definition of replacing in kind.

3. " Ties." Ties are a universal feature of standard track
construction. Whatever their material, they must serve the double


function of foundation and structure, the former in providing
a bearing for the rail, taking up a concentrated load at the
base of the rail and distributing it over the roadbed, the latter
in keeping the rails parallel, at gauge, and upright. When the
track passes on to a track scale, or a wharf, or over a bridge
the tie may perform some additional functions, in which case
we call it variously, scale tie, switch tie or bridge tie; but its
primary functions are not thereby impaired; hence switch and
bridge ties come under the general class of u Ties/'

To the tie by the above definition are added head blocks and
railway crossing timbers, because they are generally from the
same supply and perform analogous functions.

This account is to provide for the bare cost (including
inspection) of the tie delivered, after it has been accepted at the
point of delivery. All subsequent costs of unloading, distrib-
uting and placing in the track are embraced in the general
account of " Roadway and Track," under the subheads,
" Applying Ties " and " Work Train Expense," so far as such
expense may be incurred.

The track, whose tie and timber maintenance, as described
above, is charged to this account, includes all permanent main
tracks, sidings, yard or spur tracks whether on the line, in tun-
nels, on bridges, or at terminals of every character, such as pas-
senger and freight stations: it includes classifying, storage,
repair and other shop-yard tracks, and tracks on piers,
wharves, or track scales, or those leading to inclines and coaling
and water stations (but not on the incline or in the fuel station).
The evident purpose is to include in this account the ties of all
track used in commercial service or in work immediately inci-
dental to the performance of commercial service, such as that to
fuel and water stations, or that of " repair tracks " for the
quick repair of " cripples." But the fuel station itself and. the
shop, the enginehouse and storehouse are drawn off into types
apparently separated from that part of the plant directly used


in commercial service, and are described as " Buildings, Fix-
tures and Grounds." To make the distinction, all track material
including ties used in fuel stations and shops, enginehouses
and storehouses is specifically excepted from the account
" Ties," and charged to " Buildings, Fixtures and Grounds."
The point where the track classifies as " Buildings, Fixtures and
Grounds," in case of the fuel station, is the point where the
incline begins, and in the case of the shops it would apparently
be where the shop yard track passes into the shop, enginehouse
or storehouse, or on to transfer tables or turntables. The under-
lying principle of the distinction is that track that is housed or
on a structure belongs to the structure which houses or sup-
ports it, except in the case of bridges, docks and wharves (trans-
fer bridges when a part of docks or wharves), stations, grain
elevators and track scales, because all these are a part of the
continuous way, or yard, devoted directly to commercial

If the ties are a part of the installation of a new track the
cost is not an operating expense (except in case of ballast tracks,
the expense of which is cleared through the " Ballast " expense
account), but a charge to Additions and Betterments, "Addi-
tional Main Tracks " or " Sidings and Spur Tracks." If such
tracks are temporary they will be subsequently wiped out of
Property account by restoring to stock their material at the
amount of its scrap or second-hand value, and charging the
remainder of the cost, together with the incidental expense of
removing the track to " Profit and Loss." * But if the removal
of tracks is to relocate them elsewhere, as for instance at stock
piles or " ore bodies," the relocated track does not change in
function or value. This value was placed in Property account
at the time the track was first laid, therefore Property account
is not disturbed, and the cost of relocation is a charge to Oper-
ating Expenses.

* See Additions and Betterments, par. 5, p. 339 of this book.


Ties used to restore damage by washouts are an extraordi-
nary expense, and not a regular tie renewal charge, but a charge
to " Roadway and Track."

The expense of ties used in the laying of temporary tracks
around wrecks is charged to " Clearing Wrecks/' because they
serve no permanent use and* are absolutely an incident to the
emergency handling of traffic due to a wreck.

The renewal of ties is a kind of work that is largely regu-
lated by seasons. For this reason the amount of work done in
any one month has no direct reference to expenses that properly
offset the earnings of that month. This account, therefore, is
one of those whose expense may be divided arbitrarily over the
several months of the year; but all of the expense of the year
must be closed out during the year, as none can be carried over
to the next year.

Comment: If the expense of unloading ballast is charged to
" Ballast," in applying the rule of following material with all
charges to the point of delivery where it is used, we see no reason
why ties should be excepted.

Tie expense is greatly modified by the use of tie plates which
are charged to " Other Track Material." If the function of a
tie includes the furnishing of a bearing surface for a rail and
this is plainly the case the tie plate which is inserted to per-
form this specific function of the tie, and no other, certainly is
a part of " Tie " expense, and should be so charged.

It has been ruled that the increase in the life of a tie, due to
creosote treatment, shall not be considered a betterment (Case
562). This, apparently, is to conform with the theory that bet-
terment shall take note of increasing quantity, but not quality,
which is made to apply also in case of " Ballast," " Rails " and
" Other Track Material." We believe the principle to be a wrong
one, although to recognize differences in quality as betterment
confessedly offers chance for some abuse. In the case of the
replacement of ordinary wooden ties with steel ties, the failure


to recognize in the accounts resulting betterment amounts to a
serious distortion of the real facts.

There should be a distinction between main line and yard
track tie renewals, because the normal expense of the two differs

4. " Rails." Eails are the track on which the wheels travel,
whether on tangent or curve, roadbed or bridge. Insets in the
track of frogs and switch points are not considered " rails " ;
track fastenings, such as angle plates, tie plates, bolts, nuts and
spikes are also excluded from " rails," and these, as well as frogs
and switches, are disposed of as " Other Track Material." Rail
used as guard rail is also " Other Track Material " unless it is on
bridges or trestles, when it is considered to be a part of the
bridge or trestle, and so charged.

Rail is so large an item of maintenance material that it is
advisable to keep it separate so that deductions can be made
about it alone. Its cross section or templet has been a matter
of close study to get those proportions of base and web and
head that shall give the maximum strength for a given weight.
The chemical constituents also are worked out with the greatest
care to discover that point where hardness or wearing quality
unites with toughness to produce the maximum efficiency. The
rail is roughly classified at the weight in pounds per yard.
Thirty years ago 56 to 60-pound rail was good standard, but
requirements have steadily advanced. To-day the standard will
run from 75 to 100 pounds, running even higher in tunnels,
terminal stations, and on city streets where exposed to much wear,
and where renewal is attended with heavy expense. Rail is paid
for by the ton, and an easy formula is to multiply the weight
in pounds per yard by 11/7 to produce the figure of tons per
single track mile (two rails).

Of all accounts, this of rails is the most conspicuously char-
acteristic of the railroad. It embraces primarily the rails in the
main line and passing tracks over which the commercial trans-


portation is made; it next includes the rails in tracks at ter-
minals of every character (save exceptions noted next below),
whether station, pier or dock, track scales or team tracks. It
includes the tracks of the classifying yard, and then the tracks
whose function is incidental to the direct business of commercial
transportation, such as receiving yard and storage tracks, tracks
leading to water and coaling stations, ash pits and turntables,
or in the shop yard to receive cripples. But tracks on structures
(except track scales, bridges, docks, wharves and transfer
bridges), such as turntables and transfer tables, coal inclines, or
floats, or tracks inside of buildings (except stations and grain
elevators) are considered part of such structures or buildings.
Gravel pit tracks, because they serve a temporary and highly
specialized use, are cleared directly through the ballast clearing
account. It has been ruled that temporary tracks that are
moved " each year " to serve mines or lumber operations shall
be charged up to Property account as Additions and Better-
ments, and that when taken up, the salvage shall be credited to
the same account and the balance wiped out through " Profit
and Loss/' But in case of temporary tracks to stock piles and
ore bodies which are described as " being continually relo-
cated/ 7 the cost of relocating shall be charged to Operating
Expenses. Rail used to replace rail lost in washouts is not a
charge to regular rail maintenance, but to u Roadway and
Track," which account is of a more inclusive character, pro-
viding for the labor of applying the material of roadway main-
tenance, patrolling, protecting the roadway, and the expense of
restoring it in the emergencies of washouts.

The " Rails " expense embraces all charges, including inspec-
tion, up to point of delivery, f.o.b., but the cost of unloading and
distributing and laying track is charged to " Roadway and
Track," as the intent is to preserve " Rails " account for material
expense, strictly construed. " Delivery " is generally under-


stood to be to the division where the material is to be used, while
" distribution " is to the points over the line of the division.

Since the actual work done in any one month is not directly
related to the actual wear of that month, but depends on the
program of the year's renewals, the expense of the year is con-
sidered as a whole, and it is permissible to charge to each month's
expense, equal arbitrary proportions of the year's work schedule.

Comment: The distinction between "fast" or main line
track and yard track is an important one in affecting normal
cost, and therefore should be preserved in the classification.

Increased weight of rail is considered (Case 374) betterment,
but a higher quality of rail (except the replacement of an origi-
nally second-hand rail with new rail), involving an increase of
price, is not considered betterment. This corresponds to the
ruling in respect to "Ties," "Ballast," and "Other Track
Material," but we believe that it is inconsistent with the tenor
of the classification as a whole.

5. "Other Track Material." Having provided for the two
large single items of track, viz., ties and rails, the other material
used in track is so miscellaneous that it is thrown into this " all
other " account. " Other Track Material " embraces the track
fastenings of angle plates, bolts, nuts, spikes; the supports for
the rail, such as tie plates, chairs, rail braces, guard rails (when
not on bridges) the rail accessories of track insulators, tell-
tales, bumping posts, crossing angles ; switches with their points,
frogs, stands, targets, tie rods, chains, levers, etc. Interlockers
and signals are not a part of the track, and they are provided
for elsewhere. The material in this account differs from supplies
which are of current consumption; the use and not the size is
the basis of the distinction : Thus, nuts, nut locks, switch lamps,

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