Economics of Railway Operation

This historic book may have numerous typos, missing text, images, or index. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. 1908. Not illustrated. Excerpt: ... The funds so obtained will be used in whole or part for the construction and equipment of the railroad, so that the corporation can take up the work for which it was created, viz.: the manufacture and sale of transportation. Still later in its career the corporation will, no doubt, make some purchases of property or securities as investments just as individuals do, and it may also sell these. Then there are the receipts or the losses incurred from these investments. Further, when the manufacture and sale of transportation begin, there are the profits or losses from these operations to be recorded. All of these items must be recorded just as Brown records his cash transactions, and this record forms an Open Account covering the corporation's financial history. From it numerous closed accounts are produced, and from it is obtained the financial status of the corporation by balancing the account. Evidently it would not do to keep this open account without consideration of the details that are to be recorded. For our purposes, however, the consideration of the General Books of a railroad corporation is not essential and will not be entered into, as it is primarily with operations that we have to deal, leaving the larger questions of finance to the experts in that field. ACCOUNTS. We may divide the financial operation of railways into I. Receipts. II. Disbursements. The Receipts being subdivided into A. Capital Receipts. B. Miscellaneous Income. C. Earnings trom Operation. Disbursements being classed as for D. Additions, Betterments, and Investments. E. Miscellaneous Disbursements. F. Operating Expenses. I. Receipts. A. Capital Receipts. Capital Receipts are the amounts received from the sale of the capital stock, real estate, equipment and notes of the c...