* "The magnitude of these expenditures during the last three or four years will be more clearly appreciated when it is understood that more than three-quarters of the entire equipment of the system has been practically renewed during that period, while, at the same time, nearly all the main track has been renewed with steel rails, and much of it with steel weighing 80 lbs. to the yard. Since 1890, a great change has taken place in traffic conditions. Reduced rates of transportation have suggested economies in operation in heavier and more powerful engines, freight cars of larger capacity, and increased train loads. These changes in rolling stock have required corresponding improvements in road beds, bridges and tracks, to sustain the greater power and weight of the new machinery. This process of adjusting the means of transportation to the prevailing traffic conditions, is the accepted solution of the problem of moving low class freight long distances at a minimum cost. The experiment has been a signal success thus far, but it has called for an outlay of money which has severely taxed the resources of railway companies. * * The present physical condition of the property, including its new and large motive power, and increased carrying capacity are satisfactory proofs of the wisdom of the policy followed. The financial condition of the Company shows satisfactory im provement." 1899. Vice-President and General Manager Ramsey's Report.-"The increase in maintenance of way expense was only $23,376.03, although 23,777.6 tons of 80-pound steel rail, 109 tons of 70-pound steel rail, and 294 tons of 63-pound steel rail were laid in main tracks; 121.4 miles newly ballasted and heavy expenditures for the repairs of bridges, frogs and switches, spikes, splices and fastenings, and $18,823.93 for river protection. We purchased 26,250 tons of 80-pound rail at a cost of $450,675 at the mill. On account of delay in shipping by the mills, the bulk of this new rail was delivered after December, 1898, and old rails were worth more per ton when they were released from the track than the new steel cost. June 30, 1899, we had on hand 5,224 tons of 63-pound rail, which will be rerolled and laid on our branch lines, and 10,072 tons of scrap rails and relayers. The work of improving the roadway by the replacing of trestles and open water-ways with iron pipe culverts was vigorously pushed and during the year 5,669 lineal feet of trestles, 1.06 miles, were filled, and three iron bridges were built to replace wooden bridges, at a cost of $20,172.76. New shop buildings were erected at various points, at a cost of $22,966,30, and $19,269.91 was expended in additions to and remodeling of Springfield passenger station, and $23,200.81 was expended for the new freight terminals, house and tracks at Buffalo. For reducing grades and removing sags on Western Division, $11,733.96 was expended. * Interlocking plants at six crossings of other roads were put in at a cost to the Wabash of $13,761.59. Thirteen and three-tenths miles of new side tracks and spur tracks to various industries were built at a cost of $48,891.54. Real estate was bought for extension of yard facilities at St. Louis, Peru, Bement and Detroit, and at Logansport to remove some bad curves and heavy grade at a cost of $19,911.77." "The total amount expended for repairs of engines (including $123,234.20 paid for new engines) was $799,895.33." "Contracts were placed in February for 40 locomotives; 8 high class 8-wheel passenger engines, 28 heavy mogul freight and 4 heavy switching engines for May, June and July delivery, but owing to the delay of the builders getting material from the mills, the first deliveries were not made till late in August. It is expected that all will be delivered by the end of September. These engines will cost $396,125; 10 of these engines, costing $100,000, will be assigned to the Des Moines and St. Louis Division, and paid for out of the D., M. & St. Louis bond issue, and the remaining $296,125 will be paid, 10 per cent. cash, and by equipment notes extending over four or five years, in monthly payments." "The expenses of this (car) department for the year were, as last year, above the normal-first, on account of the unusual requirements of the Buffalo Division; second, putting on safety appliances, couplers and air brakes, and third, new freight cars." "During the three years, July 1, 1896, to June 30, 1899, liberal purchases were made of equipment and rail; 2,580 30-ton box cars; 250 30-ton furniture cars; 500 40-ton coal cars; 10 coaches and chair cars; 2 dining cars; 65 locomotives (including those now being delivered) and 62,327 tons of 80-pound rail, with large quantities of frogs, switches and fastenings." "The Wabash is in better condition physically, and to secure and handle traffic promptly, and at a lower cost per ton, than ever before." 1900. President Ashley's Report.-"* * * the Board of Directors has not hesitated to authorize liberal outlays from earnings in order to enable the lines of the Wabash to compete with other first-class systems. * * This brief explanation of the policy of the company seems necessary in order to account for the liberal additions to the rolling stock, which must be paid for from earnings. These payments extend through the ensuing six years, in monthly installments, and except so far as they have been increased by the addition of the leased lines between Detroit and Buffalo, are a legitimate charge to operating expenses in the department of maintenance and repair." 1900. Vice-President and General Manager Ramsey's Report.-"With the large increase in gross earnings, $2,047,016.14, there may be some feelings of disappointment in the comparatively small increase in net earnings, but a careful examination of the various statements and statistics, especially those showing the expenditures on account of the various improvements and additions to property, cars and locomotives, will show that a large part of the increase in expenses has been due to actual improvements and additions, and that the increase due to cost of securing, moving and handling the increased traffic and legitimate maintenance of the property has been not out of proportion to the increase in earnings." "For the years from 1895 to 1900 the 'revenue' train load has been as follows: "The 'average load per car' corrected for past years as above, was "The total amount expended for repairs of engines (including $197,261.85 paid for new engines) was $996,769.58, equal to $2,323 per engine for 429 engines, the average number on hand during the year. This is $398 per engine in excess of the average per engine last year. We received, during the first five months of the fiscal year, 8 eight-wheel passenger engines, 28 mogul freight and switching engines. Ten of these were allotted to the Des Moines Division and charged to the construction account of that division. * * * Nearly 50 per cent. of the engines on hand July 1, 1899, went through the shops for general repairs, and 72 per cent. for heavy repairs. These per cents. are way above the average for such repairs, and show the 'building up' of our motive power that is going on." "The expenses of this (car) department for the year were, as last year, way above the normal-first, on account of charging out amount carried in suspense for new dining cars and coaches; second, putting on of safety appliances, couplers and air brakes, steam heat, etc.; third, new freight cars, and fourth, postal and combination cars. The total amount on account of these items was $741,557.15. In March, 1900, contracts were entered into for 3,000 thirty-ton box cars, 36 feet long in clear, and for 500 forty-ton coal cars, all to be delivered by September 1, 1900. They are now being received rapidly, and all will be on hand by about the first of September, as per contract. They were all built to modern standards, steel bolsters, air brakes, automatic couplers, draft rigging and large dimensions. The contracts provide for payments in 72 equal monthly notes, interest at 5 per cent., with option of anticipating payments." "In addition to these items of expenditure to improve the property, there have been great improvements made in the condition of the property, and considerable sums expended in the way of heavy rails, frogs, switches and track betterments. As shown by the foregoing statistics, there was no let-up in the policy of improvement which has been in force since the reorganization in 1889." 1901. Chairman of the Board Ashley's Report.-"During the year two issues of bonds have been authorized by the stockholders and debenture mortgage bondholders at special meetings held for the purpose. One of these, called the Gold Equipment Sinking Fund Bonds of 1901 for $3,000,000, is dated March 1, 1901, and runs for twenty years at 5 per cent. interest, and provides for a sinking fund of $100,000 per annum for five years; $150,000 per annum for the next ten years and $200,000 per annum for the last five years. These bonds are secured by new rolling stock, part of which has been hitherto paid for in monthly installments, and the remainder of which is in course of delivery. This arrangement will relieve the operating expenses of the monthly charge of about $20,000 after providing for the sinking fund and interest." 1901. President Ramsey's Report.-"On account of the heavy expenditures for equipment, reduction of grades, double track, etc., the heaviest in any year since the reorganization, the surplus is not as large as for the previous year. There was, in round figures, $1,000 per mile expended on maintenance of way and track improvements. Although the previous years have seen many improvements in and additions to the property of the Company, the work done in this direction during the past year has been far ahead of any previous year. In addition to the amount expended for 'additions to property' (see table F), and charged against net earnings, there were large sums expended for other additions to property, equipment, new sidings, station buildings, grade improvements, etc., and for more than the ordinary expenditures for maintenance, all of which was charged direct to the operating expenses." The total amount expended for actual additions to real Total * * $830,066 58 37,091 60 .$1,487,428 69 "The extraordinary increase in the Maintenance of Way expense was due to the pushing of the work on tracks, ballasting, cross ties, surfacing, etc., as early as possible in the spring in order to have the track in the best condition possible for the anticipated heavy travel to the Pan-American Exposition. The pushing of this work ahead of the usual time added some $250,000 to the normal expenses. The total revenue of the Company, 1901. from all sources, was. Expenses of operation, including taxes, 1900. .$17,816,646 09 $16,710,604 14 .... Auditor's Report.-Additions to Property. (Table F)— 1901. 1902. President Ramsey's Report.-"It is with pleasure that I again lay before the Board an annual statement showing a continuation of large increases in the earnings of the Company and gratifying improvements in the condition of its property. The expectations of the continuation of prosperity during 1901-1902, set forth in the annual report of June 30, 1901, were more than realized, each month showing an unbroken record of increases. The estimate of earnings was exceeded by over $1,000,000." "It may seem monotonous to repeat what has been said in our annual reports for the past several years about 'additions to and improvements to the property,' and yet, with the large increases in the gross earnings and small increases in the net earnings, it is only proper to show the owners of the property what has been done with the revenues." * "These general figures show an expenditure far above the normal repair requirements and examination of the detail maintenance statements will prove it. There has been a general increase in the rates of pay and wages of almost all branches of the service, particularly in shopmen, trackmen, agents, etc., until the average rate of wages is higher now than ever." "While there have been large sums expended during the past few years for equip ment, motive power, improvement to track, ballasting, reduction of grades, etc., the expenditures for these purposes during the past year being as follows: For additions to tracks, shops, stations, real estate, etc.. For air brakes, steam heat, gas and electric lighting. Total .... $666,808 69 550,837 32 34,134 45 .$1,251,780 46 "Contracts were let and the work is now well under way for reducing the grades from 60 feet to 21 feet per mile at five points on the Middle Division, between Bement and Chicago, at a cost of about $250,000. 500 forty-ton 40-foot flat cars, steel under-frame, 50 locomotives-12 passenger, 32 freight and 6 switching and about have been contracted for at an aggregate cost of about $1,500,000." "The large increase in both freight and passenger earnings during the past few years-much larger, comparatively, than that of other roads in Wabash territoryproves the wisdom of the policy of the Directors and management to so improve the road and equip it that it could secure and transport economically and safely that portion of the traffic to which it was justly entitled. This policy should be continued until the property is in such condition and so equipped that it can be sure of its share of this traffic under any conditions of competition. All these expenditures must be paid for out of earnings." 1902. Auditor's Report.-Additions to Property (Table F)— .$205,538 31 178,203 46 Real estate Changing grades on Chicago Division. New freight and passenger stations. Total 160,277 64 7,021 41 32,458 78 $583,499 60 The tables of Wabash "Mileage Statistics" which are published herewith are full of interesting percentages that will probably apply to most lines of railway. |