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for the last ten years would receive a pension allowance of forty per cent of $40 or $16 per month.

4. Pension allowances are paid monthly and terminate on the death of the employee.

5. No pension allowance is paid during the period when the employee is receiving benefits from the relief department.

6. Acceptance of pension shall not debar employee from engaging in other business, but such a person cannot re-enter the company's service.

7. The pension department is under the supervision. of a vice president, the general manager, and the assistant comptroller of the company. The board of directors may appoint members of such pension board at any annual meeting.

No person over thirty-five years of age is taken into the service of the company except that with the approval of the board of directors (1) former employees may be re-employed within a period of three years from the time of their leaving company service; (2) persons may be employed, irrespective of age, where service for which they are needed requires professional or other special qualifications; (3) persons may be employed temporarily for a period not exceeding six months, subject to extension when necessary to complete the work for which they are engaged.

PURCHASING DEPARTMENT

The duty of the purchasing department is to supply material required by various departments in such quantity and of such quality as they specify and to do it in the shortest possible time and at the least cost.

There are many advantages to be gained in concentrating purchasing power in one department. Having general advance information of the requirements of all

pany and the several classes of em er many classes of generally several classes of men monthly earnings of the emplo

consequence obtain specifications, for many cilitate inspection and so

On the Atlantic Coast Line members paying monthly fr rial. Further, the records they receive the following ord the means for establish

Accident benefits-Fre ery essential in forming a judg ments ranging from $0 ess of prices asked on similar one year, and one-hal than one year. Sick benefitsDeath benefits

The firs by the F

d equipment purchases are not made department, the executive department large matters.

sing agent is usually assisted by a fuel inspector, a stationer, and a general store

t of fuel is greater than that of any other

of railroad expense. The fuel agent superof the ' inspection, loading, and shipping, and in a the accounting for fuel purchased, and is

sion

vani

by

th

way

generally as to conditions of the fuel market.

tie-inspectors inspect all ties delivered and them under the specifications as first-class, secandass, or culls. All large purchases of lumber are inspected and classified.

The stationery-store stock is a supply of all the numerous blank forms, stationery, and other office sup

plies.

It is in charge of the stationer, who issues it on

monthly requisitions from the various departments and from general division and agents' offices. The requisitions from the last named are usually supervised by the

traveling auditors.

The stores department is under the direct supervision of the general storekeeper, and the records of all material purchased for it are kept by him. While much of the material purchased is not delivered to the store

DEPARTMENTS

direct to point of use on the line,

a record of all of it.

lumber and hardware must be kept es to be issued to various departments, amounts, on properly approved requisistock is replenished from time to time by asing agent on requisition from the storeThe general aim in the stores department is to as little money tied up in stock as possible without barrassing the departments requiring it by undue delays in filling requisitions. This supervision, especially on large lines, is very important on account of the large amount of material and supplies required to be kept on hand. On the Santa Fe System this item was on June 30, 1915, $15,870,460.48.

Semi-annual inventories of stock are taken as a check on the record of purchases and requisitions with the purpose of showing the disposition of all purchases and the proper division of cost to each department.

The department is also charged with the sale of old material unsuitable for railroad use, such as scrap iron, steel, rubber, and old equipment which through obsolesence or age can no longer be economically used.

The head of the department of purchases and stores is one of the three vice presidents reporting to the president and has an assistant. The purchasing and stores divisions are sharply distinguished, the former being in charge of a general purchasing agent and the latter under a general storekeeper. There are two assistant purchasing agents on lines East of Albuquerque, two purchasing agents on the Coast Lines, and a coal-inspector and tie-inspector in the purchasing depart

ment.

CHAPTER XIX

EXAMPLES OF TYPICAL ORGANIZATIONS

Having shown the organization and activities of the respective departments of various railroads, we may now consider them collectively, and for this purpose a small line, the Manistee & Northeastern Railroad, and a large system, the Atchison, Topeka & Santa Fe Railway, have been selected.

All systems of railroad have been created through the combination of small individual local roads, most of which, from financial necessity, were built a few miles at a time. By far the greater number of these original small roads have been consolidated into small systems by purchase, stock control, or lease and the small systems in turn into large systems.

MANISTEE & NORTHEASTERN RAILROAD

For the purpose of illustrating the organization of a small railroad the Manistee & Northeastern Railroad has been selected. This line is an excellent example of a small, independent, well-managed railroad, in which the supervision of more than one department is in the hands of one official. Such officials must be "allaround" railroad men, rather than specialists, but it will generally be found that there is one department which particularly engages their attention, the direct supervision of a portion or all of a department of less importance being delegated to an assistant.

The fact that, with average gross earnings (in a

period of five years) of about $3,000 per mile, it has been able to pay all expenses and add to its surplus practically $180,000 during a period of business depression speaks well for its organization and management.

This railroad has a main line seventy-one miles long extending from the port of Manistee on Lake Michigan to Traverse City on Grand Traverse Bay in Northern Michigan; a branch seventy-nine miles long from the main line to Grayling; one of fifteen miles to Provemont; and one of seventeen miles to Empire Junction.

The "property operated" statement covering this feature is as follows:

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Its equipment consists of sixteen locomotives (of locomotives weighing more than forty tons); nine coaches; five combination cars; two baggage, mail, and express cars; 748 freight cars (of which forty-two are refrigerator cars); two snow plows; one steam shovel; two boarding cars.

It connects with the Michigan Central Railroad, Pere Marquette Railroad, Grand Rapids & Indiana Railway, Ann Arbor Railroad, and three small branch roads, and with lake steamers at Manistee.

Its operating ratio in 1914 was about seventy-six per cent, and in 1915 eighty-two per cent. The average for

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