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After all, most railroads-through equipment trusts-have been acquiring much of their polling stock on the installment plan for decades. Interest and amortization, the "pay later" phase of installment purchasing, must always be the concern of railroad financial officers when new equipment is under construction.

Cost of competitiveness

But budget planning for 1966's freight cars transcends the almost simple problem of sufficient cash. In today's rapidly changing transportation market, the railroads' problem of "what to buy" should be considered ahead of "how to pay." Cars, ordered today and writen off over the 15-year period sanctioned by the ICC and IRS, will still be in service after 1980.

The prime question becomes: What will it cost later if the freight cars ordered now are not suitable for the transportation job which railroads must do 5, 10, and 15 years hence? Part of the price paid for cars ordered in 1966 could be the cost of early obsolescence and inability to be competitive.

Tomorrow's competition

Even the definition of tomorrow's competition is an elusive thing.

As Jervis Langdon, Jr., chairman of the Rock Island, recently pointed out to a Chicago group, pipelines, trucks, and barges are not the only competition confronting railroads. "A very real competitor," said Langdon, "is the desire of industry to avoid transportation entirely by decentralizing."

Mine-mouth power generation, being investigated by some electric utilities, is one example of traditional transportation being avoided entirely. A few months ago Southern President D. W. Brosnan told the American Mining Congress :

"The Southern doesn't like mine-mouth plans. They use coal but they don't use railroads. That means railroads have to make prices so low that major electric utilities aren't likely to move in this direction.

"We want utilities' arithmetic to give them answers that favor rail transportation between mines and generating plants. Southern has done well in its territory in beating the cost aspects of extra-high-voltage transmission lines from mine-mouth plants," said Brosnan. "I am confident that we can stay ahead of that threat and that most-if not all-other railroads will be able to do as well."

Brosnan has since summarized the deficiencies of traditional coal cars in today's low-profit-margin utility fuel market by calling the conventional lowcapacity hopper car in unit-train service "wasteful." Major shortcomings of standard 50- and 70-ton hoppers, says Brosnan, included too low payload-toempty ratio; too little capacity for true volume movements; and inability to be loaded and unloaded rapidly.

In its quest for new and more efficient coal-handling equipment, the Southern has introduced 110-ton aluminum gondolas (Railway Age, Apr. 4, 1960, p. 12); 100-ton steel hoppers (Railway Age, July 13, 1964, p. 22); and recently an experimental four-unit, 260-ton aluminum hopper (Railway Age, Aug. 9-16, p. 34). The 260-ton car, says Brosnan, "seems truly to hold great promise for reducing transportation costs."

The car's the thing

Crucial in the ICC's recent decision sanctioning the Southern's volume grain rates was another of the railroad's equipment innovations-the "Big John" covered hopper car.

"Big John," said the Commission's report, is an advance in car technology "which makes it particularly suitable for the transportation of bulk commodities such as grain." Emphasizing the importance of "Big John's" size and mechanical features was the ICC's refusal to permit the same low rates if Southern used boxcars or if competing railroads used conventional covered hoppers for the same grain hauls-in both cases claiming that standard cars would make the tariffs noncompensatory.

The idea that special equipment must always be introduced in obtaining ICC clearance for rate reductions was somewhat tempered by Commissioner J. W. Bush's observation that he would have approved the competitive rates for shipments in conventional equipment-had Southern's competitors made "a better presentation of cost factors." Bush thought that such a case could have been

made, pointing out that other roads sought approval of their lower rates only if Southern's adjustments were approved.

Trend to giantism

There seems to be no interruption in the trend to giantism in freight cars. Two weeks ago General American announced its 60,000-gallon tank car (Railway Age, Oct. 4, p. 24), noting that it has seven times the capacity of the typical tank car in service at the end of World War II. The big GATX car will be operated for some months to appraise the operating characteristics of its runninggear arrangement with a span bolsters and two 70-ton trucks at each end. Loaded with liquefied petroleum gas, the big car will put 218 tons on the rails under it. This car follows the pattern of a 50,000-gallon tanker with the same type of running gear which was put in service by Union Tank Car 3 years ago (Railway Age, Apr. 22, 1962, p. 12).

The Pennsylvania has designed two 150-ton, 38,000-gallon tank cars and a 150-ton, 6,500-cubic-feet covered hopper car, all with six-wheel trucks. These trucks, say Pennsy officials, will permit the car to operate at fast-freight speeds wherever standard four-wheel-truck, 100-ton cars can run. The three cars are scheduled for early completion by the railroad's shop and are aimed at placing on the rails bulk traffic which is now moving by water.

Reduced inventories

The PRR expects to demonstrate that the capacity and speed of movement with these new cars will permit bulk materials to be moved by rail cheaper than by any other form of transportation. The storage facilities and inventories associated with water transportation can be eliminated.

The big cars, say Pennsy officers, are expected to serve as models for future car-building plans of chemical companies that own their own cars or lease them; it is not the start of a program to get the PRR into the tank-car business.

The significance

What do these developments mean for equipment planners? There seems to be a steady push to higher and higher capacities, with particular emphasis now being given to bulk materials movements.

The early years of this decade also saw railroad attention centered on bulk shipments. Two or three years ago interest switched to manufactured goods as the railroads turned their attention to high-capacity boxcars. The resulting fleet for auto parts service including the 862-foot, 10,000-cubic-foot models costing approximately $35,000 each-have not been altogether an unmitigated blessing.

Intraindustry controversy over the initial expenditure and the return on investment which could be realized with the rates established for these big cars culminated last week in an approximate 10-percent increase in auto parts rates by eastern railroads. The possibility of utilizing these big cars in other services is also under study.

Marketing and mechanical people must work closely in planning equipment which is immediately profitable and will remain competitive in the years to come. One of the important considerations is the building of basic car structures which are designed so that they may be readily converted from one service to another.

A typical product of this type of planning is the 60-foot cushioned flatcar which trailer train has been acquiring for services other than piggybacking. The flatcar's basic underframe may be fitted out as a general service car, may be equipped with bulkheads, or may be specially rigged for the transportation of automobile frames or farm equipment. While no conversions have so far been made, or are planned, certain mechanical features of the original design would make speedy and inexpensive changeovers possible.

No more "make do"

In planning for future equipment, the recent actions of the AAR Mechanical Division as involving car components must be considered. Consensus of the railway industry, as evidenced by the AAR group's actions, is that the cheap compromise will no longer be sufficient for tomorrow's operating and traffic demands. Some of the traditional "make do" mechanical arrangements on cars which produce frequent failures or require continuing attention are on their way

out.

Effective next year all new freight cars in interchange service will have to be equipped with automatic slack adjusters if they have conventional brake rigging. This will serve to produce more uniform braking action from all the cars in a train-and the ability to stop is fully as important as the ability to get today's freights to the high and uniform speeds which competition now requires.

Similar action is being taken to require that center plates and truck bolsters of new cars be of improved quality to insure that trucks will swivel more uniformily, simplifying the problem of humping cars in classification yards (RA, June 28, p. 40).

Roller bearings, cartridge bearings, or stabilized and sealed plain bearings will have to be part of the planning for all new, rebuilt, and heavy repair cars, effective next August. Again the aim is to improve operations by reducing the incidence of hotboxes.

AAR Mechanical Division actions such as the preceding are usually preliminary to a general requirement for all cars in interchange service. Some of the recent dates established for these mandatory applications include:

In 1968: Use of only AAR-certified draft gears with requirement that heavy cars have high-capacity gears.

In 1975: Use of high-capacity brake beams and high-strength boxcar floor construction.

In 1980: Mandatory installation of brake-cylinder release valve and requirement that there be a minimum of 24-inch clearance between the top of the rail and the lowest part of the car.

PASSENGER PROSPECTS?

While new cars designs and component refinements have been introduced regularly to assure growing usage and improved operation of future freight trains, there has been a virtual stagnation of medium-distance passenger train technology for almost a decade. With President Johnson's recent signing of the High-Speed Ground Transportation Research and Development Act of 1965 (RA, Oct. 4, p. 17), prospect of Federal participation promises to bring changes. Ultimately there could be "fallout" which might be applicable to freight equipment.

Spectacular breakthrough

The potential in the northeast corridor demonstration projects has been seen by Pennsylvania Chairman S. T. Saunders as possibly leading to "the same kind of spectacular breakthroughs in rail transportation technology that have resulted from Government-sponsored research and development of airframes and other aspects of aviation."

Already the President has asked for an initial $20 million appropriation for the remainder of this fiscal year; $35 million will be requested in each of the 2 following years. Carbuilders have submitted to the Department of Commerce, charged with overseeing the demonstration projects, plans for the proposed high-speed trains. The Department and the Pennsylvania are putting final touches on a contract for implementing the Washington-New York projects. Saunders has predicted that trains will be running in less than 18 months after the contract is signed.

No continuing commitment

"The Government's encouragement of rail passenger service in the northeast corridor does not in any way constitute a commitment to a program of continuous support," explained R. A. Nelson, Commerce's Transportation Research Director. "The service will have to prove itself on an economic basis in comparison with other modes of transportation."

The Pennsylvania will put into operation 40 to 50 new electric multiple-unit cars between Washington and New York to provide hourly service in each divection. The New Haven will operate three to five self-propelled (possibly gas turbine) rail cars between Boston and Providence. The services will operate at speeds up to 125 miles per hour, possibly higher. The cars, as described by Nelson, will be "new, modern, and comfortable, providing amenities such as food service."

The Commerce Department anticipates that orders for the cars will be placed within the next 2 months with every encouragement given for completion of the first cars within a year. In the case of the PRR, the Federal funds will

amount to $9.6 million, with the equipment becoming the property of the railroad at the end of the demonstration projects. Thorough market analysis will be part of the Government's appraisal of the northeast corridor experiments. While railroads, on their own, must be plotting their role in freight transport over the next 15 years, Government will have a big role in their passengertransport future. Car orders: How high?

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DEAR CONGRESSMAN HARRIS: Just wanted you to know that there is a lot of support favoring passage of H.R. 7167 relative to relieving the chronic doubledoor boxcar shortage.

Arkansas is rapidly becoming a factor in the plywood business with the advent of southern pine plywood. Double-door boxcars will be very helpful in loading the product at the mills and also will be helpful at the destination in lowering the cost of handling this material. Most plywood is 4 feet wide and 8 feet long, however, there are many larger sizes with fork trucks. The most economical way of shipping by rail is in double door boxcars. Best wishes.

Sincerely,

ROLAND R. REMMEL.

MERIDIAN & BIGBEE RAILROAD CO.,
Meridian, Miss., July 19, 1965.

Hon. OREN HARRIS,

House of Representatives,

Washington, D.C.

DEAR MR. HARRIS: You are, I am sure, familiar with the so-called penalty per diem bill which recently passed the Senate as S. 1098.

As you know, this bill would certainly penalize the short-line railroads and further restrict all railroads by adding additional control over the industry by the Interstate Commerce Commission.

We understand that Nos. 9580 and 9270 have been assigned to similar bills in the House and we are very much opposed to them. Our main objection, of course, being that the short-line railroads are not in a position to make tremendous investments in equipment, and we feel the recent multilevel per diem rates will have the same effect in encouraging those railroads that are in a position to do so to build equipment, as would the penalty per diem bill.

I recall very pleasantly my short visit with you in El Dorado last fall and hope we have an opportunity to visit again some time in the future.

Any help you can give us in connection with this legislation will certainly be appreciated.

Cordially,

WILLIAM M. SHOEMAKER,
Executive Vice President.

BAUXITE & NORTHERN RAILWAY Co.,
Bauxite, Ark., July 7, 1965.

Hon. OREN HARRIS,

Congressman, Washington, D.C.

DEAR MR. HARRIS: On behalf of the Bauxite & Northern Railway Co., I would like to go on record as being very much opposed to Senate bill, S. 1098, which deals with railroad per diem. With the increased per diem the longer railroads have been able to charge, we are burdened with the very heavy per diem costs and the larger railroads are not willing to give us commensurate increases in division to cover these costs. It is also true that a very small portion of car detention at terminals and otherwise can be charged to any railroad and we are completely at the mercy of our shippers in the length of time it takes them to load cars. Through the average agreement that we have with these shippers, the demurrage charged is always a very small proportion of the per diem that we are forced to pay. Therefore, we would bear the penalty of any such bill.

Very truly yours,

JAMES DAVIES, Jr., General Manager.

Hon. OREN HARRIS,

INTERNATIONAL PAPER CO.,

LONG-BELL DIVISION, Longview, Wash., July 6, 1965.

Chairman, House Committee on Foreign and Interstate Commerce,
House of Representatives, Washington, D.C.

DEAR CONGRESSMAN HARRIS: I understand that S. 1098 is expected to pass in the Senate in the very near future and will then come before the House for consideration. As you know, this is the bill to help alleviate the boxcar shortage. I am told this bill will go to your House Committee on Foreign and Interstate Commerce.

I sincerely hope that you will schedule S. 1098 for an early hearing when it comes to your committee. I can speak from personal experience when I say that the boxcar shortage in this country already is hindering the economy. And all signs point to an even more severe boxcar shortage this year. I have been warned that we are facing the worst boxcar shortage in history.

Last month
Since June,

These are the figures cited to me: The daily boxcar shortage is already 2,650, double the shortage at this time last year. The daily shortage of all types of cars is nearly 5,200, just short of double last year's shortage. alone the number of serviceable boxcars declined by 1,549 cars. 1,964, the total number of serviceable cars has declined by 56,000. I am confident that you understand the seriousness of this problem and that you will help expedite the passage of S. 1098. Sincerely,

ELIOT H. JENKINS, General Manager.

GEORGIA-PACIFIC CORP., Portland, Oreg., July 15, 1965.

Re H.R. 7165, to help alleviate freight car shortages by establishing realistic car rental charges through ICC action.

Hon. OREN HARRIS,

Chairman, House Committee on Interstate and Foreign Commerce, Washington, D.C.

DEAR OREN: Our company is deeply concerned about the seemingly ever present freight car shortage problem. Looking to the future, the situation is likely to get worse instead of better. The impact on our Arkansas operations which, as you know, are under another expansion program, this one over $50 million, could be severely adversely affected.

While H.R. 7165 (and S. 1098) are certainly not complete answers to the problem, we believe that passage will help. This legislation simply makes it clear that the ICC can establish freight car user charges which are high enough to justify construction of additional cars, and also help insure that the maximum and most efficient use is made of boxcars now in service.

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