light, ice and similar items of office expense. Travelling and
incidental personal expenses, cost of special trains used, official
association dues, fidelity bond premiums are of the same gen-
Drafting, engineering and scientific instruments are a spe-
cialized form of supplies. Because of their special character and
use, they are not included in the account " Stationery and
Printing." Some of them are very expensive and may last
indefinitely, nevertheless they are " charged out " when received.
25. Steam Locomotives Repairs. A steam locomotive is
understood to be a detached and complete moving power unit
in commercial service together with its tender to carry the
necessary supply of fuel and water. In case of a gasolene car
for passenger business, the " locomotive feature " is classed
with steam locomotives, and the "car feature" as passenger
train car. The regular steam locomotive consists essentially of
frame, running gear, firebox, boiler, machinery, (including
cylinders) and accessories as cab, headlights, signals, etc.
These several parts develop a lot of attachments which as a
whole constitute the equipment and fixtures of the locomotive.
Some of the parts and all of the appliances are renewed
separately as they fail. By way of illustration we may mention
brasses, keys, oil cups, air signal equipment, brake fixtures,
gongs, seat boxes, tool boxes and tools, head lamps, etc. All
these taken together with the other parts constitute the " loco-
motive available for service" which M. of E. must maintain.
Many of the parts must be renewed so frequently that they are
MAINTENANCE OF EQUIPMENT 93
practically of the character of supplies, though not so con-
sidered. Other parts like the boiler (as a whole) may not be
renewed oftener than once in five years, and the firebox once
in ten years. It frequently happens that this process of renewal
may go on, consecutively replacing piece by piece as it gives out,
until in time we have practically a new locomotive. The identity
has been preserved only in the general design, or perhaps in
the frame, which has remained intact. In this way it happens
that some locomotives which are over forty years old are still in
To the maintenance of the locomotive are charged all the
labor, material and supplies (less salvage) used in repair work,
all the incidental inspection to locate the defects to be repaired
and to accept the work when done, and also all the direct super-
vision (not superintendence). As a part of the price of material
or appliances, is necessarily included the payment of royalties,
the cost of patent rights on things used. This is done on the
theory that such payments more nearly approximate a mainte-
nance expense than a rental charge. In the same manner, any
other labor, preparing the engine for repairs, or restoring it
after repairs, is incidental to the repair work. The expense
of cutting up condemned locomotives and tenders is an extra-
ordinary illustration of this principle that any particular thing
maintained, any job or class of work, comprises all the inci-
dents of such particular thing, job or class of work. Each
particular item of maintenance work must " clean up," that is,
must restore the status quo which it may have disturbed. This
expense of cutting up a locomotive is not carried over into the
value of the scrap produced, because the determining factor
in the value of scrap is not the cost of producing the scrap, but
the price that the market offers. With the direct supervision,
because it is of the same general character, is charged a propor-
tion of the clearing account Shop Expenses, which is set up to
take care of the miscellaneous current shop items of heat, light,
94 RAILROAD EXPENSES
supervision and labor (not superintendence). "Repairs'" are
confined to repairs of the equipment unit and to renewal of
parts of the equipment unit, for reasons set forth in the fore-
going discussion of u Repairs, Renewals and Depreciation."
Maintenance is not only against wear and deterioration but
also against accident. The theory is that accidents, however
much to be deplored, are, in their aggregate, an inseparable
incident of use and the M. of E. Department must provide
against them as against any other contingency.
Insurance recovered is credited to this account because
it defrays the cost of the repairs so far as these repairs are due
to accidents for which the insurance is carried.
Accidents to equipment when travelling under revenue way
bills being offset by revenue, classify with all other accidents
which are incident to the production of revenue and the result-
ing repair expense is charged to "' Loss and Damage/ 7 the reg-
ular account for accidents expense incidental to hauling revenue
freight. Repairs expense for damage to the equipment of
another road (as by collision) classifies with any other '" dam-
age to Property" incidental to operation, such as fire losses
caused by locomotive sparks.
Comment : The miscellaneous character of the appurtenances
and parts of the locomotive render a categorical definition of
Additions and Betterments as distinguished from repairs, an
intricate matter. At present, railroads are largely left to their
own devices. One great system has made the ruling for its own
guidance that the following items shall be classed as Additions
arid Betterments and not as " repairs."
"Additions" (first cost) :
Fire extinguishers on switch engines where pump is used.
" Betterments " (the excess cost of the following improved
devices over the article replaced) :
MAINTENANCE OF EQUIPMENT 95
Tender frame (cast steel), replacing wood.
Wooden composite bolsters of tender trucks replaced
with cast steel and all metal.
Front end sill, cast steel replacing wood.
Application of Franklin fire doors.
Application of air pumps of greater capacity.
Changing New York driving brake equipment to L. T.
Changing trailers from inside to outside bearing.
Changing cab from wood to steel.
Application of steam heat and air signal to freight and
Changing of wheels, cast iron to steel.
26. Steam Locomotives Renewals. When a locomotive
goes out of service, its entire value (less scrap) is wiped out,
it ceases to be. If the road has carried a regular depreciation
charge, it has anticipated this final disappearance of the loco-
motive's value by piling up in the Eeplacement account the
values which were slowly disappearing in the locomotive. On
the actual demolition of the locomotive we carry over to Ee-
placement account the values still remaining in the locomotive.
The actual retirement of equipment must be more or less
arbitrary. It is a matter of judgment just when the locomotive
has made its last economical mile and can yield no more. No
depreciation formula can so exactly discount actual conditions
as to absorb the values in the locomotive just as they expire.
It even sometimes happens that locomotives withdrawn from
service, as useless, but .not at once disposed of, under stress, of
special conditions, are temporarily restored to restricted ser-
vice. But whether there is a real demolition of the locomotive,
and thus a complete elimination of its value, or whether the
locomotive is transferred to a class of cripples, there has been
dropped at such a time, a large value. This constitutes part of
96 RAILROAD EXPENSES
the locomotive maintenance expense, and the amount of such
" dropped value " less an}^ reserves previously accumulated in
Replacement account, is charged to " Steam Locomotives
Inasmuch as the intent is simply to wipe off the books any
remaining value against that locomotive, it is plain we deal with
the value as there recorded, whether it may happen to be
original price or " record value."
Comment: There is looseness of terms in describing the
value to which a. locomotive shall be adjusted at the time of
demolition. The actual expressions in the text are, " orig-
inal cost (estimated if not known), original value, record value,
purchase price." If all these four designations refer to the
same thing three of them are superfluous; if record value is
one thing, and the other three are designations of another
thing, the terminology is unfortunate, for cost and value may
be different things. The difference between " original cost "
and " purchase price " is not obvious.
27. Steam Locomotives Depreciation. Depreciation is a
charge by formula made at regular periods to cover the decline
in value due to the proportion of the estimated life which is
consumed during these periods. Because there is no generally
accepted formula, the Commission has left the amount of this
charge to the discretion of each road. The idea is that in time
there will be evolved from experience such a formula which
can be generally accepted. However, conditions are so greatly
different as to the type of the locomotive and the elements of
use to which it is exposed, that it is hardly practicable to have
a single formula for one road. The best practice would seem to
be to establish different formulae for different types of locomo-
28. Electric Locomotives Repairs. Electric locomotives
are moving units for the application of power from a central
plant. They are, essentially, the machinery, the running gear,
MAINTENANCE OF EQUIPMENT 97
the housing, and fixtures. Like the steam locomotive, their
maintenance is provided for under three items of Repairs,
Renewals, and Depreciation. Their maintenance is of a differ-
ent kind, but the same principles apply in grouping the expenses
of this maintenance as apply in the case of the steam locomo-
tive, to which the reader is referred.
Passenger Train Cars Maintenance. Passenger train
are the cars of what is known as the passenger train type, which
run in passenger trains, or under passenger train conditions of
operation. Such cars earn passenger, excess baggage, milk, ex-
press or mail revenue. Sometimes special features are added to
passenger train cars or specially designed entire cars are used,
performing an extra service and collecting an extra charge there-
for. Such are the cars of the parlor, chair and sleeping or
tourist car services, the cafe buffet and dining car services.
These services constitute an Outside Operation when the
expense of the extra service for which a charge is made, is sep-
arable from the general body of expenses for operating trains.
The extra service involves the use of an extra car or the special
adaptation, at an expense, of a regular car. While such addi-
tional service is designed to attract business by rendering travel
more comfortable, it is the general intention that the additional
service shall be approximately self-sustaining.
The " car " maintained, embraces with the bare car, in its
entirety, its furniture and fixtures, such as brake gear, uphol-
stering, carpet, rugs, chairs, tables, ice boxes, ranges, lamps,
(except signal or train), cases, speed recorders, mail catchers,
electric wiring, gas tanks and gauges, piping, air brake, and
other permanent appliances; but not such articles as lamp
chimneys, bell cord (renewal), drinking cups and supplies.
The maintenance of this car consists of :
1. Ordinary running repairs described as " repairs or
renewals of parts of passenger train cars, commonly
known as fixtures or attachments."
98 RAILROAD EXPENSES
2. General or shop repairs:
(a) " Renewals of important or vital parts made
necessary by reason of age or wear and tear."
(b) " Repairs to or renewals of the more import-
ant or vital parts of passenger train cars the
necessity for which is caused by breakage or
failure while in service."
' , (c) " Repairs to passenger train cars damaged
through accident or otherwise." (Account
31, Note B).
3. Renewal of the car itself.
4. Depreciation of the car itself.
The extra service is directly responsible for some or all of
these items in different" kinds of Outside Operations. As the
expenses are located in this way they are withdrawn from the
general body of expenses and set up in an Outside Operation
account, opposite the extra revenue they availed to produce.
The I. C. C. classification has laid down the formulae by which
this separation should be made:
The general body of shop repairs expense of all Outside
Operations cars is eliminated from the Rail Operations account,
" Passenger Train Cars, Repairs" (see text Classification of
Operating Expenses, page 46, lines 6 to 9) and carried over to
the appropriate Outside Operations account, (see text Outside
Operations, page 71, Note, and page 86 Note B). The resi-
due of the Repairs expense, viz., Running Repairs, is not specif-
ically withdrawn from the Rail Operations nor taken to Outside
Operations, and the assumption is it is left in the original Rail
Operations account, " Passenger Train Cars, Repairs." This
assumption is borne out by the ruling for sleeping cars (which
are an Outside Operation), " All general or shop repairs should
be treated through Outside Operations: ordinary running re-
pairs being charged to ' Passenger Train Cars Repairs.' ' :
MAINTENANCE OF EQUIPMENT 99
Rail Operations are charged with the running repairs of an
Outside Operations car, presumably on the assumption that the
Outside Operations car is merely a substitute for a regular
car, which would have had the same running repair expense.
Therefore this running repair expense is not an extra expense
to be charged to the extra revenue of the Outside Operation.
In the apportionment of the renewals and depreciation ex-
pense the Outside Operations cars are divided into two classes
(see text Passenger Train Cars Renewals and Depreciation) :
1. Dining, cafe and buffet cars.
2. All other Outside Operations cars, such as parlor, tourist
and sleeping cars.
The latter group carry their renewal and depreciation
directly to Outside Operations (see text Classification of -Oper-
ating Expenses, pages 46 and 47).*
But as to the former class, the expense classification (pages
46 and 47), specifically excepts them from the cars whose
renewal goes to Outside Operations, while the text of the Outside
Operations specifically includes their repairs and renewals.
(Page 86, Note A.)t We cannot reconcile this conflict.
31. Passenger Train Cars Repairs." This account covers
the repairs only (not the renewal) of the car. But in the mat-
ter of the equipment and fixtures of the car it includes both
renewals as well as repairs because the renewal of the small
detachable parts called equipment and fixtures, occurs fre-
quently, while the car itself is renewed only at long intervals.
All incidental and preparatory work, such as scrubbing the car
preparatory to painting, also inspection and testing of the car
or its equipment are a part of the repair expense. In the
same way supervision (but not superintendence) is charged
with the direct repairs expense; likewise the expense of cutting
* Pages 275-277 this book.
t* 'Dining and special cars" are "buffet, cafe, dining and special cars. "
100 RAILROAD EXPENSES
up a car when scrapped is designated as a part of the general
expense of the maintenance of the car. The scrap released is
credited to the account at the price which it is worth as scrap,
and bears no part of the demolition expense. Insurance col-
lected is the indemnification of that part of the repair expense
in restoring equipment damaged in accidents which the insur-
ance covers, and hence is a credit to this account. Cost of small
hand tools used exclusively in work chargeable to this account
goes with such work to the same expense. With the direct labor,
and on the basis of its distribution is charged a proportion of
the shop expense which includes heating, lighting, water, watch-
ing, and other expenses incidental to the operation of the shop.
These expenses are cleared through a shop expense account each
month as incurred.
Royalties on appliances used on the cars are considered a
repair expense of those appliances, and not a rent charge.
Repairs of passenger train cars account is to take care of all
of this class of expense which is regularly incident to the run-
ning of passenger trains; therefore it includes the payments to
foreign lines for their cars destroyed on the line when in the
service of the company responsible.
The passenger train car is that unit of equipment which pro-
duces the regular passenger train revenues. Should the car
have special features for auxiliary service to produce added rev-
enue for such special service, those special features are a part
of Outside Operations and their heavy repairs are charged
accordingly; their running repairs, however, remain in this
account. (See foregoing discussion: "Passenger Train Cars
The intent of the repairs account is to include every kind of
expense applied to the car (short of complete renewal) except
the cleaning, heating and lighting, and like current transporta-
tion expense. Damage by accident is an incident of the use of the
car in regular service. The repairs of the car in such service
MAINTENANCE OF TQriPAlEXT 101
being provided for in this account, the repairs due to accident
would be included as well.
Work done on a railroad must be classified according to the
schedule on which the railroad operates. Thus the repairs of
a passenger car which was damaged when travelling on a rev-
enue way bill is not car maintenance but a transportation ex-
pense, itemized under "Loss and Damage Freight." It is in
the same category with any other freight that is lost or dam-
aged in the performance of a service for which revenue was to
have been collected. The destruction of a passenger car belong-
ing to another company and not travelling on a way bill, is
charged to " Damage to Property," like damage to any other
Comment : The exact definition of the repair work which is
Additions and Betterments of passenger train equipment is,
for the time, very much in the hands of the individual road.
One large system has defined for its guidance that water pres-
sure systems should be classed as " Additions " and the excess
cost over replacement in kind of the following items should be
" Betterments " :
Wood body bolsters and platform replaced by cast steel body
bolsters and platform combined.
Wood body bolsters replaced by steel.
Wooden truck bolsters replaced by metal.
Wooden draft rigging platforms, needle beams, tie beams,
replaced by steel.
Wooden underframe replaced by metal.
Wide vestibule with steel platforms.
Cast iron wheels replaced by steel.
Oil lighting replaced by gas.
Gas lighting replaced by electricity.
Common gas burners replaced by mantles.
Stove or Baker Heater replaced by steam.
Dry hoppers replaced by flush hoppers.
102 :KAiLROAD EXPENSES
32. Passenger Train Cars Renewals. When a passenger
train car is destroyed or taken out of a class in which it is
carried, to be placed, later in another class, the road either
replaces the car by an entirely new car, which is called car
renewal, or merely sets up a replacement fund to the amount
of the value of the car destroyed, which fund is available to pay
for the new car which is bought later to replace the one
destroyed. Neither extraordinary repairs nor renewals of parts
of the car is considered car renewals. The renewal charge is
made at the time the car is withdrawn from service, and there-
fore is incidental to an actual transaction. Any accumulations
in the replacement fund for account of the car destroyed are in
reality amounts set up in anticipation of this event, so that when
the car is finally destroyed the only expense actually carried to
Car Renewals is the value remaining in the car which has not
been previously set up in the Replacement account. All sal-
vage, of course, derived from a car destroyed is a proper credit
to this account. The value at which the car is charged to this
account is the original cost, record value or purchase price (less,
of course, any depreciation in the Replacement account.
Renewal* of passenger train cars engaged in Outside Opera-
tions (except dining, cafe and buffet cars, which are auxiliary
service for all passengers, and not extra fare passengers only),
are renewed under the proper account of " Outside Operations."
(See foregoing discussion, "Passenger Train Cars General
Maintenance,"' page 97.)
Comment: " Outside Operations " classification, p. 86, t speci-
fically defines renewals and depreciation of dining and special
cars to be " Outside Operations Maintenance," in direct con-
flict with the classification of Operating Expenses, p. 47. J
33. Passenger Train Cars Depreciation. This account
* See Comment.
t " Dining and special cars " are " buffet, cafe*, dining and special cars."
J Page 277 this book.
MAINTENANCE OF EQUIPMENT 103
is in every way like the foregoing, namely, " Renewals," except
that the charges are made monthly in anticipation of the ulti-
mate necessity of the renewal of the car. They therefore are
based on a formula derived from the original value of the car
divided by number of years of probable life. This formula may
be made and applied either for the individual unit of equipment
or on a series of individual units of like equipment which
together are taken as a unit.
Comment: The text of the classification of Outside Opera-
tions, p. 86, is in direct conflict with the text of the Classification
of Expenses, p. 47, in disposing of depreciation of cafe, buffet
and dining car renewals. ( See foregoing discussion, " Passenger
Train Cars General Maintenance.")
34. Freight Train Cars Repairs. A freight train car is a
car used in revenue freight train service. It may belong to any
one of the many classes of freight cars designed for special
service. With the commercial car goes the auxiliary car called
the caboose, and for switching purposes the poling car.
This account is designed to take care of that element of the
production of revenue which is the maintenance of the car in
which the freight is carried. Therefore it is immaterial whether
the car repaired belongs to the road repairing it or to some other
road, providing only, if it be a foreign car, that the repairs be
for user's defects, since owner's defects are an expense
already covered in the per diem charge. With the car are
included all furniture and fixtures, such as brake gear, coal hods,
deck lamps, ice boxes, links and pins, grain doors, racks and
ventilating systems for refrigerator cars and double decking for
stock cars. But mere damage is a transportation expense
("Train Supplies") and not maintenance.
The expense of demolishing a car is an incident to the main-
tenance of freight cars in general, and therefore chargeable to"*"
their repairs account. Inspecting and testing a car and its
appliances, to insure their serviceability is not considered a """"
104 RAILROAD EXPENSES
transportation but a maintenance expense. With the direct
labor and the material applied (less salvage) are included cost of
supervision, travelling expenses of employees, small tools used
exclusively in this work, and a proportion of shop expenses
through the clearing, account of this name. Through this shop
clearing account, incidental expenses of heating, lighting, water,
watchman, etc., are apportioned to the accounts benefited in
proportion to the amount of labor distributed to these accounts.
Royalty payments are considered a part of the repair expense
of the appliances on which the royalties are paid; likewise the
testing of appliances in place, as, for instance, in case of air
The repairs, as in the case of " Passenger Train Cars
Repairs," are defined to be, repairs and renewals of all parts and
appliances of the car and in theory all repairs of the car short
of its actual replacement by a new car. But in practice it is
ruled that when a car is practically rebuilt it must be taken out
of Equipment, and the new car substituted must be taken up
through Additions and Betterments at its appraised value.
In the same way as defined for passenger train cars, pay-
ments for repairs of foreign freight cars, travelling on revenue
way bills are charged to " Loss and Damage Freight," and if
such foreign cars are damaged while moving under trackage
rights, the expense incurred to indemnify for loss is charged to
the same account as if it were any other property namely,
" Damage to Property."
Comment: Additions and Betterments of Equipment is, for