The Atlantic Monthly, Volume 05, No. 32, June, 1860. Various
practice has now arisen. Cost is looked to as well as splendor; and there is no engineer now in England whose reputation, would sustain him in constructing such monuments of extravagance as the Great Western Railway or the Britannia Bridge. American civil engineers have not been fairly treated. The wretched construction of many of our railways, and the uneconomical condition of all, have been cast against them by their English brethren as a reproach. But the faults of construction, we have shown, are attributable to another cause. No engineer of standing would lend himself to many of the schemes that have been pushed through in the West. But in order to build a "cheap" road, it is only necessary to get a "cheap" engineer, and that is a commodity easily picked up. If their ignorance and blunders tarnish the fair fame of the profession, it cannot be helped. But if American engineers of standing had been allowed to finish the railways begun by them, and to take care of them and see that they were not abused after they were finished, our railway securities would be quoted at higher rates than they now are.
Although there are many civil engineers of standing and experience who have been thrown out of employment by the general stoppage of public works, and who are better qualified to take care of that costly and delicate machine, a Railway, than men whose knowledge is entirely empirical, yet few railways employ a resident engineer. Those that follow this practice are generally supposed to do so because he is a relative of some Director, and wants a place, and not because such an officer is really required.
"Construction accounts," says Mr. Colburn, "can never be closed, until our roads are built. To attempt it only involves a destruction account of fearful magnitude. Under our present system, we are perpetually rebuilding our roads, not realizing the life of our works, and thereby running capital to waste."
"With good earthwork, thoroughly drained, well-ballasted tracks, rails of good iron, correct form, not exceeding 60 pounds per yard, and properly supported at the joints, the ties properly preserved, and the whole maintained by a judicious system of repairs, the average working expenses might unquestionably be reduced by as much as 18 cents per mile run."
The mileage of the Massachusetts railways for 1859 was 5,949,761 miles run, and the expenses of operating $0.93, being a saving of 15 cents over those of 1856, amounting to $892,464. If, by a judicious expenditure of $5,000 per mile, a still further saving of 18 cents per mile run could be made, it would amount, on the present mileage, to $1,070,956 per annum, which, the receipts being equal, would return eight per cent. on the increased capital of sixty-eight and a half millions of dollars.
We have thus shown the combined effects of financial mismanagement and imperfect construction upon our railway property. But there is a third evil to be cured before it can become productive.
Under the present system of railway management, everybody is busy getting rich at the expense of the stockholders. Railway men are as honest as the average of mankind, but there is no reason why they should be more so; and if their temptations are greater, a certain percentage of them will inevitably yield to those temptations,—just as statistical tables show that the average number of arrests for drunkenness and disorderly conduct is greater on Sundays and holidays than on working-days.
A few years ago it was impossible to compare the results of the working of one railway with those of another. The returns were so ingeniously made out, that only one thing was certain,—the amount of dividend that it pleased the Board of Directors to declare. If this was three or four per cent. for the half-year, the stockholders were delighted, and passed a vote of thanks to those worthy gentlemen for devoting so much valuable time to their interests gratuitously. What if a dividend was not earned? it was easy enough to raise money in Wall Street on the Company's paper, until some excuse could be found for a new issue of bonds or stock. But those benefactors of the human race, Tuckerman and Schuyler, put a stop to all this. After their proceedings became public, and still more certainly after the crash of 1857, if railways did not earn a dividend, they had to say so. This led to investigations, and stockholders became "posted," as the phrase is. Chiefly by the exertions of one newspaper, the "Boston Railway Times," railway companies were shamed into giving their reports in such form as to distinguish the expenses per mile run, for fuel, oil, repairs of road, machines, etc., etc. This gave a common standard of comparison; and, as we have seen, it was made use of to discover in what particular departments English railways were worked more economically than our own. This has led, as we have also seen, to a great reduction in the cost of operating; and the revival of railways, as an investment, dates from that time, 1857-8.
But there is something more wanted yet. As we have said, railway men are not out of the reach of temptation. Let the various officers of a railway manage it so as not to exceed the average expense of other roads of their State, and their reputation stands high. Let them reduce their expenses below the average, and their power is despotic. If they are men of ability, they can do all this,—operate their road for less than many others, run their trains regularly and without accident, even treat the public with civility, and make themselves rich, in a few years, by percentages and commissions on the cost of supplies, and by other modes, which, perhaps, had better not be referred to here. If any one doubt this, let him take pains to inquire how large a proportion of railway-men get rich in a few years on salaries of from one to two thousand dollars per annum. Nor can this be prevented; for every new check is only a transfer of power from intelligent to ignorant hands; and ignorance, however honest, is a more expensive manager and easier victim than knavery. There is but one remedy. Make it for men's interest to reduce the expenses of operating to a minimum. Make it for their interest to do so, by allowing them to share in the profits, and then the question is solved, and you have a thousand vigilant guardians of your property day and night. Let all supplies be furnished by public competition under sealed tender, as is done in the army and navy, and on the large railways of Great Britain.
There are, no doubt, practical difficulties in the way of carrying out these changes, as there are in introducing all new systems. You have to meet the doubts and suspicions of those who are unacquainted with them, the opposition of interested parties, and the general feeling which influences all men to let well enough alone. But that there are no insuperable obstacles in the way is evident from the fact that this system has already been partially applied on a railway doing a very large business, the Philadelphia, Wilmington, and Baltimore, under the able superintendence of S. M. Felton, Esq., who, in his last Report, says, "It still works well, and is productive of much saving to the Company.2 It promotes regularity in running the trains, and in all branches of our business. It diminishes accidents, by bringing home the responsibility directly upon individuals instead of the corporation."
There is a great deal of significance in this last remark. Every one knows, that, when an accident happens on a railway, "no one is to blame,"—which means, that everybody should have so much blame as can be expressed by a fraction whose numerator is unity and whose denominator represents the whole number of employees. Such an infinitesimal dose of censure, contrary to the homeopathic doctrine, always produces infinitesimal results.
To what is the extraordinary success of the Hudson's Bay Company owing,—that wonderful organization which rules the wilds of British North America with a discipline which has no parallel in the history of mankind, except that of the order of Jesuits? Simply to the fact, that every man whose duties require intelligent action is a partner of the Company, shares in its gains, and loses with its losses. And so it should be with our railway-employees. Instead of excusing waste of time and property by the stereotyped phrase, "The Company is rich and can stand it," they would strive to exercise a rigid economy, knowing that at the end of the week their pockets would be so much the heavier.
To show how the thing should be done would involve matters of detail which would be out of place here. What we desire to show is the principle. Instead of paying all men alike, good, bad, and indifferent, let the amount of a man's wages depend on his skill and intelligence; the more he shows, the better let him be paid. In almost every department of manufacturing and commercial business this is done. Why not in railway management?
We subjoin a tabular statement of the railways of the world, made up to 1857, except those of the United States, which are for 1858-9.
–– |Name of country. |Cost per|Receipts |Percentage of|Percentage of | | | mile. | per mile| expenses to | net earnings
The cost of operating this railway for 1859, as per last Report, was only 37.4 per cent. of the receipts, while that of the railways of Massachusetts for the same year was 56.9 per cent. The result is a dividend of 8-1/2 per cent. on capital, after paying the interest on bonded debt.