[PRCo] PRC Facts from Ed Tennyson

[Fred Schneider]

I had asked a question about economics to several people last year.  In
cleaning up my inbox I came across this reply from Ed Tennyson regarding
how Pittsburgh Railways conducted their business.   I think I might have
previously mentioned that Ed had worked for the Pittsburgh Railways,
Speedrail, the City of Philadelphia, then became Deputy Secretary for
Local and Area Transportation in PennDOT during the regime of Milton
Shapp, and finally, in official retirement, as a consultant to the
transit industry.
Ed's perspective here is admittedly not always that of Pittsburgh
Railways top management, but it certainly shows the mindset of people in
Pittsburgh Railways before public ownership.  Dollars were paramount.
Today emptying taxpayers pockets and isolating  politicians from trauma
may be the most important things.

Ed's own word begin below the break.    fws

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On busy lines, even two-man street cars were less costly than buses
back then when buses were limited to 35 feet in length and 96 inches in
width.
  Pittsburgh had to pay street car motormen 25 cents per hour more than
bus drivers because street cars were bigger. ATA (now APTA) data showed
street cars cost less per passenger than buses in 1948 except in
Baltimore where street car lines were usually long and sometimes
wandering but bus lines were short for the most oart as shuttles or weak

routes.
    Because of the "fixed costs" you mention, motorman's wages were a
lower pecentage of total cost than bus driver;'s wages. Pittsbsurh's
political lawyers forced a detailed study of bustitution of the whole
Pittsburgh system in 1947-48 and the study found that only Second Avenue

(routes 55-56=58) were economical for bus operation. Even for them,
Pittsburgh Railways showed the court that the consultants had made some
mistakes and when corrected, even Second Avenue should stay rail.  I did

a study of bustituting Route 56 to McKeesport in 1948 to accomodate a
new river crossing bridge at Dravosburg.  My study showed trolley
coaches wou;ld be most economical, but not by enough to justify setting
up for them on just one route. The new bridge got rails. My study
recomended that the 99 Glassport Line be rerouted under the bridge to
eliminate a proposed shuttle to serve a pocket of stranded homes but my
boss chastized me. "We did not ask you to look at that".
    In 1948, we did not know that the steel indusrty would abandon
Pittsburgh and McKeesport would become a ghost town.
    As I remember it, street cars cost $ 5 per car hour back then, with
the motorman getting $ 1.55.  They carried about 60 passengers per hour
at a cost of 8.33 cents each. We had to eliminate three rides for
quarter and go to a dime.
    Buses cost only $ 4 per hour with the driver at  $ 1.30  but they
carried only 36 passengers per hour at a cost of 11 cents
Pittsburgh Railways did not charge depreciation in rail vs bus studies.
De- preciation is a non-cash cost to recognize the wearing out of
assets.   Rail abandon- ent eliminates the depreciation cost but
required a big book loss to write off the assets junked. Bookkeeping was

not the way to decide.  Pittsburgh figiured cash flow.  Whichever
vehicle made the most net cash flow, including renewal of worn out
property,   In 1946 after World War II and gasoline rationing,
Pittsburgh Railways had $ 24 million cash in the bank despite a doubling

of the wage rate from pre-war. There had been no fare increase.  The
annual revenue collection then was $ 24 million per year. They could
have run a whole year free fare before the money ran out.  Obviously,
they would not do that. They owed back interest on bonds from the Great
Depression and Wall Street fought over who would get the $ 24 million.
       The plan was to use $ 14 million to modernize the system which
had 666 PCC cars and maybe 500 old ones.  Ten million would go to
bondholders.  That did not sell. The Guggenheims on Wall Street got the
$ 14 million and the bond holders got $ 10 million.  There was no
further modernization.  Tom Fitzgerald retired (was forced out for age)
and CD Palmer took over with a strike almost every year. That destroyed
revenue and patronage.  Pittsburgh had a no-strike arbitration clause in

its labor conract which Fitzgerald always used to keep the peace at the
price of the highest wages in the industry. Palmer claimed that when a
labor cotract ended, the no strike clause ended with it and ruined the
company by trying to save it.  Palmer was an engineer like me and did
not understand people or unions.  He just hated them.  He was a very
good man and nice guy otherwise but people always fouled things up. They

did not submit to mathmatical formulae.
                       E d   T e n n y s o n