[PRCo] Re: PRC Facts from Ed Tennyson

[John Swindler]

This is a "keeper".

Thanks, Fred - and Ed.

John



>From: Fred Schneider <fschnei at supernet.com>
>Reply-To: pittsburgh-railways at dementia.org
>To: pittsburgh-railways at dementia.org
>Subject: [PRCo] PRC Facts from Ed Tennyson
>Date: Wed, 11 Jun 2003 18:42:10 -0400
>
>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
>
>++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
>
>
>
>
>
>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
>

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