October, 1927, the last month on record, represents a further reduction of approximately $19,000,000 or a total of almost $74,000,000. Excluding ties and rails as well as fuel, the reduction from the peak in 1921 to last October was approximately $66,000,000. With the assistance of the budget, stores operations have been reduced to the basis of a 3.1 months' supply.

The second chart gives an example of the operation of the budget and also illustrates the significance of converting the monthly allotments into a daily trend. The curve marked "maintenance of equipment budget" passes through those points on the chart which represent each day's allotment on the accumulative plan, while the line marked "orders for maintenance of equipment material" passes through the points representing the accumulated values of the orders placed throughout the month. Theoretically, orders should not cross the budget line. In this case the orders for equipment material exceeded the budget and by the 10th of the month were twice the prorated allotment but as a result of the attention immediately given, demands were reduced and the authorized allotment for the over-run was reduced to 81⁄2 per cent. In the case of maintenance of way materials, the orders exceeded the budget in the first part of the month but by the end of the month the total value of orders was considerably less than the authorized amount.

Variations from Total Budget Small

The third chart gives the history of budgeting in the more important classes of material for each of the first 10 months of 1927. The three central charts refer to the budget for total maintenance of equipment material, total maintenance of way and structures material, less fuel, rail, ties and the total maintenance of equipment and maintenance of way and structures material, respectively. These are supplemented by 31 charts for as many groups of the materials which are included in the totals. The black column in each case gives the size of the authorized allotment in each month while the white column shows the volume of orders placed during the month under this allotment. The vertical distance between each square represents $25,000 in the case of the supplementary charts while the scale is $1,000,000 in the case of the central charts.

The miscellaneous charts show much variation, not only in the size of the allotments from month to month, but in the degree to which orders followed the budget. This is particularly the case with tie plates, spikes and other track material, which strikingly disclose the problem of the storekeepers in anticipating all the conditions. that affect the use of these materials, even with the aid of stock books and other records of past performance. In contrast with this, the charts of the totals show marked harmony between the budget authorized each month and the value of the orders placed. In only two cases during the 10 months did the total value of orders exceed the total budget for maintenance of way and maintenance of equipment materials; and the average variation from the budget was 7 per cent.

Stress is particularly laid upon the harmony between. total expenditures and total budget in discussing the efficiency of the budget plan, for, as explained, while the effort is made to keep the orders in line with allotments in all the various classes budgeted, it is only with the total budget that observance is insisted upon. It is permissible under the budget plan and it is regularly practiced to utilize the gain in one class of material during the month to meet the demand for additional money of another class as long as the total budget is not exceeded.

That much remains to be done in perfecting the con

struction and administration of the plan is recognized by the authorities, but at the present stage of operations the results are said to be increasingly satisfactory. Indeed, the difficulties encountered with the budget are considered evidence of the need for such a supplementary plan of controlling the vast expenditures of material which this road is required to make and control currently for its upkeep and operation.

R

Freight Car Loading

WASHINGTON, D. C.

EVENUE freight car loading in the week ended January 7, which included New Year's Day amounted to 74.062 cars, a decrease of 179,828 cars as compared with the corresponding week of last year, which did not include the holiday, and of 153,560 cars as compared with 1926. Loadings of all commodities were smaller than last year. Coal loading amounted to 174,979 cars, as compared with 213,335, and ore. loading was 7,128 cars, as compared with 9,677 cars. Loadings by districts were also less than in the corresponding week of 1927 or 1926. The summary as compiled by the Car Service Division of the American Railway Association, follows:

ferred stock, the company will effect a saving of about $2,000 per day in interest charges.

Along with the approval of the reorganization plan the Commission authorized the issuance of $106,395,096 of 50-year 5 per cent mortgage bonds, $182,873,693 of 5 per cent convertible adjustment mortgage bonds, $118,845,800 of preferred stock and 1,174,060 shares of common stock of no par value. The company may also issue additional amounts of stock up to 914,369 shares of common and $91,436,900 of preferred as it is found necessary to convert the 5 per cent convertible adjustment bonds into stock.

Mr. Byram expressed his confidence in the future of the reorganized property and the territory which it serves in a statement issued immediately prior to taking office as chairman. He said in part:

"The reorganization plan, I believe, ultimately will return the Milwaukee to its former high position in the railroad financial field. The road went into the The road went into the hands of receivers for two reasons-adverse economic conditions in the Northwest and a top-heavy financial. structure. The Northwest is returning to prosperity and the crushing weight of heavy fixed charges will be greatly lightened by the reorganization. The principal result of the new financing will be to effect a net reduction of annual fixed charges from about $21,800,000 to less than $13,600,000. The estimated earnings of the system are around $20,000,000 annually. The cash requirements of the road will be met by one of the lightest assessments ever made in the reorganization of a large transportation system. Of the $70,000,000 to be realized by assessments, $55,000,000 will be returned to the government to liquidate loans made during the period of federal control.

"One of the unique features of the receivership has been the steady improvement of the property of the road during the last two years. The manner in which service has been maintained, operating efficiency increased and a continuous program of improvement carried on by the management is unprecedented in railroad history. In the thirty months ended last June the Milwaukee road had piled up an especially notable list of improvements. It had constructed or contracted. for $15,000,000 worth of rolling stock and had expended for other equipment over $4,000,000; for shops and engine houses, including machinery, $1,750,000; for heavier rail and additional tracks, $4,500,000; for other improvements of road, $7,000,000."

The causes which led to the placing of the Milwaukee in receivership on March 18, 1925, had their inception. prior to the election of Mr. Byram as president in October, 1917, and were largely of a nature over which he had no control. Officers and stockholders of the railroad testifying before the Interstate Commerce Commission in the investigation of the receivership in 1926 were practically agreed that the difficulties of the company were due to an inadequate rate structure, general business depression in the Northwest, and the burden of operating the Puget Sound extension. Discussing the latter influence Mr. Potter, one of the receivers, pointed out that for several years after its completion in 1909 it was operated at a profit, but that with the opening of the Panama Canal in 1914 it began to show less profits and has since failed to pay its. way. With the construction of the Puget Sound extension, double-tracking of the main line in Iowa and. between Minneapolis and Aberdeen, S. D., and the electrification of 660 miles of the Coast extension, prior in the minds of many observers to the really urgent necessity for these improvements, the Milwaukee built for the needs of the future.

In spite of the corporate difficulties of the railroad notable improvement has been made under Mr. Byram's management in operating results since federal control. In comparison with 1920 the average gross train load was 23 per cent greater in 1927, the number of freight cars per train was increased 24 per cent, the average miles per hour of freight trains was 19 per cent greater, the pounds of coal used per 1,000 gross ton-miles was 21 per cent less and the car miles per day increased 15.6 per cent. In the same period the cost of locomotive repairs per mile was reduced about 33 per cent and the number of miles run by locomotives between failures was increased from 12,400 to over 75,000 (counting as a failure any trouble which caused a delay of five minutes or more, even though the delay was afterwards made up). The operating ratio was reduced from 87.18 in 1921 to 80 in 1926.

One of the factors which brought about the receivership was the general business depression in the Northwest. The last normal traffic year which the Milwaukee may be said to have had was that of 1916 when it handled a total of 10,747,233,415 revenue ton-miles. In 1921, immediately after the return of the railroads to private control, the revenue ton-miles dropped to 8,283,212,410 although in 1926 traffic recovered to such an extent that it aggregated 11,978,810,935 ton-miles. The Milwaukee has suffered along with other railroads from the inroads of automobile competition and as a consequence its revenue passenger miles have decreased from 921,993,832 in 1916, to 817,189,840 in 1921, and 661,403,735 in 1926.

In addition to reorganizing the operating practices on the road a number of important steps have been taken during Mr. Byram's administration to strengthen its position in competition with its neighbors. One of the first of these steps was the acquisition of the Chicago, Terre Haute & Southeastern in 1921 and the Chicago, Milwaukee & Gary in 1922. Until that time practically no bituminous coal was mined along the lines of the railroad and it was at a disadvantage in obtaining an adequate supply of fuel for its own use except at heavy cost through payment of freight charges to other lines. The C., T. H. & S. E. penetrates the bituminous coal fields of western and southern Indiana and eastern Illinois, and its acquisition has enabled the Milwaukee to obtain not only the coal required for its own use, but to develop a commercial traffic from that region to points in the West and Northwest. By means of the Chicago, Milwaukee & Gary the company has been able to move this coal on to its main line without traversing the congested Chicago terminal district.

Another improvement effected during Mr. Byram's administration was the electrification of the line over the Cascade Mountains between Othello, Wash., and Seattle and Tacoma, which was placed in operation in 1920, adding 207 miles to the 440 miles previously electrified in Montana. On the existing properties special attention has been paid to the modernization of the water treating facilities and water stations; large expenditures have also been made for the renewal of bridges.

The Milwaukee has been particularly aggressive of late in passenger service. As a means of increasing its traffic to the western national parks it completed the construction in 1927 of a hotel at the Gallatin Gateway entrance in Yellowstone National Park. The Milwaukee was the first railroad in the United States to equip through passenger trains with roller bearings, the 12 complete trains needed to operate "The Olympian" between Chicago and the Pacific Coast and "The Pioneer Limited" between Chicago and St. Paul and Minneapolis being fitted with roller bearings in 1927,

involving the installation of this device on more than 125 passenger cars.

Mr.

With the reorganization plan in effect the financial burdens which handicapped the property have been scaled down so that Mr. Scandrett enters the presidency with an excellent opportunity to take advantage of the prosperity which Mr. Byram predicts for the Northwest territory which the Milwaukee serves. Scandrett comes to the Milwaukee after 26 years spent in directing a variety of phases of the Union Pacific business requiring legal talent. Lately he has devoted considerable time to wage proceedings before arbitration boards and mediation officials as counsel for the Conference Committee of Managers of the western railways. Mr. Scandrett has become known as an expert in rate matters and other matters requiring presentation before the Interstate Commerce Commission. Since January 1, 1911, he has been successively assistant interstate commerce attorney of the Union Pacific, interstate commerce attorney of the Union Pacific and the Southern Pacific, assistant director of traffic and commerce counsel of the Union Pacific, traffic assistant to the Central Western regional director of the United States Railroad Administration, valuation counsel and commerce counsel of the Union Pacific, and from April, 1925, until his election as president to the Milwaukee, vice-president of the U. P.

Mr. Scandrett was born on April 8, 1876, at Faribault, Minn., and attended the Shattuck Military Academy in that city from 1889 to 1894. He graduated from the University of Minnesota in 1898 and completed his legal education at that university in 1900. The following year he entered railway service as a claim adjuster on the Union Pacific, being transferred to the law department in 1901 as assistant attorney for Kansas and Missouri at Topeka, Kan., where he remained until he entered the commerce field on the U. P. in 1911.

As Mr. Byram relinquishes the position of co-receiver of the Milwaukee, he finishes a term of more than 10 years as that railroad's chief executive, having been elected president on October 1, 1917, while vicepresident of the Chicago, Burlington & Quincy. He was born on November 28, 1865, at Galesburg, Ill., where he entered railway service as a call boy on the Burlington at the age of 16 years. Shortly after he became a stenographer in the office of the general superintendent at Chicago and was later promoted to chief clerk to the superintendent of terminals at the same point. In 1889 Mr. Byram left railway service, to return in 1894 as a clerk in the office of the general manager of the Great Northern at St. Paul. He was advanced to chief clerk in the office of the vice-president and in March, 1898, he was appointed assistant general superintendent. of the Montana Central (now a part of the Great Northern). From October, 1899, to October, 1902, he was superintendent of the Cascade division of the Great Northern, with headquarters at Everett, Wash., and he was then appointed assistant to the first and fourth vice-presidents of the Chicago, Rock Island & Pacific, with headquarters at Chicago.

On February 1, 1904, he was promoted to general superintendent of the Southwestern district of the Rock. Island, with headquarters at Topeka, Kan., where he remained until July, 1904, when he became general superintendent of the Nebraska district of the Burlington at Lincoln, Neb. In May, 1909, he was promoted to assistant to the vice-president of the Burlington at Chicago and in February of the following year he was elected vice-president. Since 1917, Mr. Byram has been

president of the Milwaukee, except during federal control of the railroads when he served as federal manager of the Milwaukee, and during the receivership when he served as co-receiver.

Motor
Motor Transport

A

Regulation Proposed

WASHINGTON, D. C.

PLAN of federal legislation providing for the regulation of motor vehicles operated as common carriers of passengers or property in interstate or foreign commerce over the public highways by carriers now subject to the interstate commerce act, either directly or through subsidiaries, or by independent operators, is recommended as being in the public interest in a report proposed by Leo J. Flynn, attorney-examiner of the Interstate Commerce Commission, made public by the commission on January 16 after an extensive investigation of motor coach and motor truck operation. The report is intended to serve as the basis for oral argument before the commission on February 10.

After a comprehensive review of the record taken at the hearings held in various parts of the country the report states its recommendations in a series of 30 conclusions. These provide for a complete system of regulation, not including motor vehicles operated by the owners incidentally to the conduct of their business nor to "contract carriers" at this time. According to the recommendations original jurisdiction in the administration of regulation would be vested in such state regulatory bodies as notify the Interstate Commerce Commission that they will act, and the federal commission would be given original jurisdiction to act whenever a state board fails to notify it of its acceptance.

Joint boards, composed of two or more state board or representatives of state boards and of the federal commission, would be authorized to act where the commerce is carried on in two or more states. Provision is also made for an appeal to the federal commission.

"Steam railroads are, and so far as now can be dis cerned will remain, the backbone of the national transportation system," the report says, and "they alone can be relied upon for mass transportation and long-distance hauls of passengers and of goods," but as indicating the remarkable growth of motor vehicle transportation it points out that although the first patent for an internal combustion engine for the propulsion of a vehicle was granted in the United States as late as 1895, the total registration in the United States in 1926 was 8,225,859 passenger cars and 1,006,082 trucks.

Reference also is made to the fact that private automobiles and motor coaches "have made heavy inroads on railway passenger revenues particularly since 1920," and that "a large volume of short-haul less-than-carload traffic formerly handled by the steam railroads now moves in motor trucks." On the other hand the report says that the volume of traffic in automobiles and autotrucks and accessories increased from 1920 to 1926 by 110 per cent and that the automobile has greatly stimulated the construction of paved highways and that this has resulted in a greatly increased traffic in road-building materials. It is declared to be probably true that in the aggregate the business lost to the new highway agency "has been more than offset by the gain from new traffic created by the development of the automobile industry."

A detailed abstract of this report will appear in the Motor Transport Section, to be issued with next week's Railway Age.

A

S a result of more efficient supervision and the supplying of yardmasters with daily statistics of their costs, the Northern Pacific effected a saving of $435,420 in yard expenses in 1926, as compared with 1925. The use of similar methods in supervising freight station and transfer operations resulted in a saving of $329,066 in this department during the same period. The available figures for 1927, as shown later, indicate a continuation of this improvement.

Comparative statements of each day's costs, together with the business handled are on the desks of yardmasters and supervisors of freight stations and transfer platforms early the following morning. Of course, some of these figures must be based on estimates, but the estimates approximate the actual figures closely.

Improved Yard Operation

Yard operation, as measured by the switch-engine miles and the average number of freight-car miles per switch-engine mile, has shown a distinct improvement, as indicated by the graphs in Fig. 1 and Fig. 2. In 1926, as compared with 1925, freight-car miles increased 3.5 per cent, while switch-engine miles decreased 5.4 per cent and car mileage per switch-engine mile increased 9.4 per cent, averaging 102.9 for 1926. The curves for each year show the same general trend, with peaks in January, March and October in each instance, but each year a marked reduction has been shown in the total switchengine miles. In August, 1927, for the first time, the

freight-car miles per switch-engine mile passed the 120 mark.

Due to the establishment of eight-hour shifts for yardmasters, and increases in pay effective July 1, 1925, the year 1926 faced a distinct handicap in comparison with 1925. Despite this, however, a creditable showing was made and a total saving in yard expenses was effected amounting to $435,420 as follows:

Yardmasters and yard clerks
Yard enginemen

Yard conductors and brakemen
Fuel for yard locomotives
Yard supplies and expenses

Totai

1926 $1,146,125. 1,356,588

1,449,839

The Freight Transfer Platform at Spokane, Wash.

to costs, enables them to control such costs far more efficiently. This report, shown as Fig. 3, gives complete details as to wages, cars handled, engine shifts and cost per car.

With the figures for the day before on his desk early in the morning, the yardmaster is in a position to take prompt action to remedy any situation which is increasing his cost unduly. Any unnecessary engine shifts, switchmen, car riders, etc., are apparent immediately