Price of steam locomotives circa 1920's

[doctorwayne]

dti406

Until the late 40's locomotives were depreciated for tax and book over 40 years, GM had the IRS change the usefull live to 20 years so they could sell diesels, which would not last the 40 years that a steam locomotive would.

Rick J

While there were certainly some early diesels which fell by the wayside after relatively short service lives, some of that can be attributed to railroads purging their systems of minority builders' locos, as each builder's parts were incompatible with those of their competitors.  Unlike a steam locomotive, most diesels required repair with parts which couldn't be hammered out by the road's blacksmith department.
However, there are still Alcos from the '40s in-service and there are geeps from the late '40s and early '50s in everyday use, and not just on obscure shortlines.  They, for the most part, have been rebuilt, of course, but steam locomotives were also rebuilt over the course of their lifetimes.
I'm curious as to how GM could have influenced the IRS in such a manner, especially when the useful life of freight equipment has increased over the years, and it typically undergoes less maintenance or rebuildings than would a locomotive.

Wayne

[dti406]

tomikawaTT

1. Depreciated value of the asset, as carried on the books.  Locomotives were usually considered fully depreciated after 15 - 20 years of service (exact number determined by current law and usual accounting practice)

 

Chuck (Modeling Central Japan in September, 1964 - with locos new from the manufacturers)

Until the late 40's locomotives were depreciated for tax and book over 40 years, GM had the IRS change the usefull live to 20 years so they could sell diesels, which would not last the 40 years that a steam locomotive would.

Rick J

[wjstix]

Isambard

Certainly no hot rodding for the 2-6-6-2 Monashees, usually hauling a drag freight on the club layout at 20 to 25 mph, sometimes with a 2-10-2 pusher or two

IIRC the USRA 2-6-6-2 was normally limited by it's owners to a top speed of 20 MPH. It's small drivers made it impossible to properly balance the drive wheels / side rods.

[Isambard]

At 12 cents/pound the USRA 2-6-6-2 in 1919 compares reasonably well with prices for others, which range from 18 cents/pound to 25 cents/pound for later years, assuming low inflation to the late 1920's.

Interesting that these costs are completely at variance from $20 to $ 40 per pound at the turn of the century as mentioned above. A case of apples and oranges criteria?

[tomikawaTT]

If a locomotive is sold by an owner, and thus purchased used by someone else, there are several factors to consider:

1. Depreciated value of the asset, as carried on the books.  Locomotives were usually considered fully depreciated after 15 - 20 years of service (exact number determined by current law and usual accounting practice)
2. Cost of necessary repairs/upgrades to prepare the locomotive for service.
3. Shipping, taxes and duties (if sold across a national border.)
4. Scrap value - what the junkman would pay, usually in $/pound.

 

If the seller realizes more than 1 + 4, he will be a happy camper.  The book value to the buyer then becomes 1 + 2 + 3 - and the depreciation cycle begins again...

 

Given the above, I think your estimates for the Mallets are somewhat high.

 

Chuck (Modeling Central Japan in September, 1964 - with locos new from the manufacturers)

[doctorwayne]

A piece in the March 1991 issue of Trains magazine on the USRA locomotives shows a USRA 2-6-6-2, at 435,000lbs. cost $53,427 in 1919.

Another article, in the June 1985 issue, dealt with the TH&B's order for two Berkshires in 1928.  Montreal Locomotive Works quoted an as-delivered price of $113,705.78 (freight and taxes included), with delivery within 105 days.  Lima quoted $85,200.00 per loco, but the as-delivered cost, including duty, was$116,000.00

In the March 1989 issue, a 1926 Frisco 4-8-2, one of ten ordered, is shown to have cost $69,586.79.

A November 1984 article deals with W&LE's home-built USRA 0-8-0 copies, at $33,783.00 apiece in 1927.

There are probably lots more (I copied this stuff out of the magazines before donating them to a friend) so if you have a particular loco in mind, I can check to see if it's in my files.

Wayne

[Isambard]

Thanks for the reference Pete! Looks as if I've found a birthday book for my family to give me. :)

 

[Isambard]

Certainly no hot rodding for the 2-6-6-2 Monashees, usually hauling a drag freight on the club layout at 20 to 25 mph, sometimes with a 2-10-2 pusher or two (see below).

Top speed for the 2-8-0 Consolidations and the 2-10-0 Russian Decapods is usually no more than 45 mph, even with a light freight or mixed freight/passenger.

The back drop is from a photo I took at Canmore, Alberta several years ago. Those are the Three Sisters overlooking the scene.

[locoi1sa]

Isambard

  In the book titled The Baldwin locomotive works. Study of industrial practices. The going price of new locomotives at the turn of the century was $20 per pound for catalog locomotives to $40 per pound of custom builds. I had lent the book out a couple years ago to my boss and he had since passed it around to other people. I found it very interesting reading. I hope I get it back some day.

http://www.amazon.com/Baldwin-Locomotive-Works-1831-1915-Industrial/dp/0801868122

 I know you had asked for used prices. It would be interesting to see what the difference between used and new prices would be for capital equipment purchases.

          Pete

[BATMAN]

Your welcome Isambard.

I use it for speed references, to make sure I am not hot rodding around the layout. I tend to run in the 25 to 40MPH range. Any faster looks funny on my little layout.

I really like your backdrop, did you take the photo yourself? If so, where was it taken.

[Isambard]

Thanks for that link Brent.

Looks like my guesstimate of $250,000 for each of two seven year old 2-6-6-2's purchased in 1930 was reasonable. :)

The two locos are known as Monashees on the Grizzly Northern, shown here at Clinemore.  :)

 

[BATMAN]

http://www.therailroadempire.com/abouttheengines

[Isambard]

Digging into the archives of the Grizzly Northern I find that while a number of used locomotives were bought from other roads in the 1920's and 1930's the prices are not mentioned eg 2-6-6-2's from the C&O, 2-10-0 "Russian" Decapods from various roads, Baldwin 2-8-0 Consolidations from others.

My web search draws a blank. Any information on the cost/sales price of these or comparable locos, new or used, would be appreciated, in then year dollars or current dollars.

Thanks y'all!