[PRCo] [Fwd: PRC Facts from Ed Tennyson]

[Jim Holland]

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

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.     Depreciation 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.


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