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APPENDIX

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On June 15, 1915, the Commission entered an order prescribing Rules governing the Separation of Operating Expenses between Freight Service and Passenger Service on Large Steam Railways, effective on July 1, 1915. That order was modified on October 23, 1917, by the suspension of the requirements of paragraph 2 and paragraph 3 thereof. It appearing that the public interest requires that the operation of said paragraph 2 be revived, the order following was entered on December 1, 1919, prescribing the annexed revised rules, effective on January 1, 1920. It may be noted that the requirements of paragraph 1, except as to date, are the same as in the above-mentioned order entered on June 15, 1915, and that paragraph 2 makes effective revised rules governing the separation of operating expenses common to freight service and passenger and allied services.

ORDER

At a General Session of the Interstate Commerce Commission, held at its office in Washington, D.C., on the first day of December, A.D. 1919.

In the matter of Rules governing the Separation of Operating

Expenses between Freight Service and Passenger Service on Large Steam Railways

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1. Effective as of January 1, 1920, and thereafter until otherwise ordered, every carrier by steam railway whose operating revenues exceed $1,000,000 per annum shall classify each of its various items of disbursement relating to operating account according to the relation which such item bears to the freight service and to the passenger and allied services of the carrier. Each such item shall have its character appropriately indicated on the carrier's records according as it relates (a) solely to freight service, or (b) solely to passenger and allied services, or (c) in common to both freight service and passenger and allied services, or (d) to neither freight service nor passenger and allied services. Appropriate subaccounts to provide for the foregoing classification shall be set up under each of the primary operating accounts of the carrier and the results of such classification shall be shown in the annual reports made by each such carrier to the Interstate Commerce Commission. Similar analysis shall be made of every journal entry representing a charge or a credit to an operating expense account and the results of such analysis shall be appropriately indicated on the carrier's records.

2. The operating expenses common to both freight service and passenger and allied services shall be apportioned between the two classes of service in accordance with the annexed "Rules governing the Separation of Operating Expenses between Freight Service and Passenger Service on Large Steam Railways, Issue of 1920," which are hereby approved and made a part hereof; and the results of such apportionment shall be shown in detail for the various primary operating expense accounts in the annual report of each said carrier to the Interstate Commerce Commission. By the Commission.

[SEAL.]

GEORGE B. MCGINTY, Secretary.

RULES GOVERNING THE SEPARATION OF OPERATING EXPENSES BETWEEN FREIGHT SERVICE AND

PASSENGER SERVICE

It is expected that carriers will first assign to freight service or to passenger service, including allied services, the operating expenses that are directly or naturally assignable and that this direct assignment will be carried to the fullest extent that is

practicable, except as stated below, without undue increase in accounting expense. The methods indicated under the various accounts are for dividing the common expenses.

The separation should, as far as pracitcable, be made by operating or accounting divisions, and the aggregate of the divisional separations reported for the year.

I. MAINTENANCE OF WAY AND STRUCTURES

201. Superintendence.

Apportion common expenses according to proportions of accounts 202 to 273, inclusive, excluding common expenses in accounts 227-228 and 247-248.

202-226. Track Expenses, etc.

It is essential that maintenance of tracks in yards where a separate switching service is maintained be kept distinct from that of other tracks, the expenses of the exclusively freight or passenger yards being directly assigned. The annual report form will provide by means of subaccounts for showing such yard maintenance separately from other track maintenance.

The maintenance of tracks in yards in which a separate switching service is maintained and which are used in common by freight and passenger services should be divided according to the switching-locomotive miles in the common yards. Expenses of all other tracks should be apportioned according to the proportions of accounts 394 to 396, inclusive. The maintenance of road tracks used exclusively by one service should not be directly assigned to that service unless a corresponding deduction is first made from accounts 394-396 for the fuel or power used on such tracks. 227-228. Station and Office Buildings.

Apportion common expenses according to proportions of accounts 202 to 273, excluding common expenses in accounts 227-228 and 247-248.

229-230. Roadway Buildings.

Apportion common expenses according to proportions of accounts 202-226.

231-234. Water and Fuel Stations.

Apportion common expenses according to proportions of accounts 382 and 394 taken together.

235-236. Shops and Engine-Houses.

Apportion common expenses of shops according to proportions of accounts 308, 311, 314, 317, 320, 323, and 326;

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