Steam Locomotives versus Diesels

[Anonymous]

Gentlemen:

Let's evaluate Mr. Brown's study, and your extrapolations springing therefrom:

Unless it can be demonstrated that Mr. Brown's study influenced the thinking of railroad managements, and changed the course of their financial history, it has no value other than to pique the imaginations of those who'd like to come along fifty years after the fact and try to plant a big "gotcha" on the railroad managements of the day.

This has been my reaction from the start. I haven't studied Mr. Brown's work (and I don't really care how many initials he places after his name, although some of you obviously do) because I know the results. It had no effect.

Now, we've spent 13 pages discussing it, and nobody has shown that there has been any value to it.

So spend another 13 pages trying to plant your "gotcha"'s. You won't have any more effect on the world of railroading than you've already had. Your imaginations have been piqued, though - ad nauseum. Hooray.

Old Timer

[Murphy Siding]

Perhaps I missed this detail. Did the railroads finance the purchase of steam locomotives, or pay cash for them?

[selector]

This thread has great legs!

FWIW, here is an intersting historical perspective of one railroad, the WP. Takes about 5 mins to read all sections.

http://www.wplives.com/diesel/Second_Generation/second_generation.html[:o)]

[AnthonyV]

Michael:

I have tried unsuccessfully to obtain Brown's study. Do you know where or how to get a copy, even for a fee?

You commented that fuel and maintenance cost declined because of traffic losses. Yet your last graph shows fuel and maintenance costs are presented in terms of cost per revenue ton. Wouldn't presenting the data on a revenue ton basis eliminate the effect of traffic on the data?

Accounting for inflation, fuel and maintenance costs in constant dollars declined substantially on a revenue ton basis. This suggests that substantial efficiency gains were realized by Dieselization. These were negated by the finance charges as you stated many times.

However, you agreed that locomotive costs were the same on a constant dollar basis before and after Dieselization. You also agreed that is true that MOW expenditures decreased as a result of decreases in revenue.

One thing I cannot understand is if locomotive costs stayed constant (in constant dollars), how could have this affected the ROI? Stated another way, say the railroad has a dollar to spend. With steam, it spends it on fuel and maintenance. With Diesel, it spends the same amount in real terms (i.e., one dollar) on fuel, maintenance, and finance charges. Either way, it spent a dollar. How would this affect the bottom line, i.e., the ROI.

How did the drop in revenue affect the ROI?

Thanks
Anthony V

[Anonymous]

Fair enough.

[MichaelSol]

QUOTE: Originally posted by cementmixr

Mr. Sol and I were posting at the same time, and I just read his reply.

What I meant by "primary sources" was anything in a railroads archives, any kind of written matter such as reports and studies, etc, created by the company's own internal experts. I meant to use this term to contrast with published work from people outside the company, such as in trade journals, Media, newspapers, etc. Mr. Brown was an outside consultant, so his write-up in the Mechanical Engineeering journal you cite is an out-siders take on the matter. I never intended any criticism of him whatsoever.

This brings up a key point, and why consultants exist at all.

If the accounting department wants a new computer, and if the accounting department is directed to do the study as to the cost-benefits of a new computer, any bets on what the study will conclude?

And, if management wants a follow-up study on how much improvement the new computer offered to the company, and the same accounting department does the study, any bets as to how impressive the performance of the new computer will be?

But, it is even more significant than a fundamental conflict of interest that occurs when departments offer studies of their own performance metrics. Consultants like H.F. Brown typically carry the designation "P.E.," Professional Engineer.

They have the expertise to do a real study on something like this, that a typical mechanical officer, no matter how experienced, simply would not have. In that era, few railroads had a P.E. on staff. It's like saying you've got a company full of good bookkeepers, but you are asking them for a CPA's skill and training.

There is no comparison between the reliability and integrity of the kind of study conducted by a P.E. like Brown, both educated and experienced in exactly these kinds of things, as compared to an internal study most likely conflicted as to motive, by a staff who has never done one before and has no training to do one.

And that goes back to the experience of British Rail. If they merely wanted opinions on dieselization, they could have called up their colleagues at the Pennsylvania, at the New York Central, at the Santa Fe, at the Milwaukee and simply asked.

They already knew what kind of answers they would get. Probably OldTimer would have answered the phone, he would have misunderstood the question and they would have gotten a very strong opinion decorated with half-baked prejudices not based on actual economic or operating data.

When you want a real answer by someone who knows how to put together a study, how to handle economic data, and what to look for, and you want someone who is not personally invested in the decision, and in the outcome, you turn to someone like Brown. You have to.

And of course, this begs the question. British Rail wanted a study upon which to base its future actions. An 'internal" study wouldn't have done it much good compared to an industry wide study of railroads already substantially dieselized. In the context of this thread, there was no such thing as an "internal" study.

Best regards, Michael Sol

[MichaelSol]

QUOTE: Originally posted by The Duke


If I am not mistaken you were arguing that switching to diesels caused a drop in ROI, did you not? If not what have you been discussing for 13 pages?

Well, I also said this:

QUOTE: The compromise of those two positions is even more intriguing. And this is Brown's conclusion. Diesel-electric technology was the hands down winner for yard work. The old saying "diesels can start what they can't pull, and steam can pull what it can't start," has no better application than for yard work. More importantly, the lower overall "stress" on the machine gave those yard diesels life spans as long as steam. They were a net economic benefit.

However, my opinion is beside the point, Brown's study, and the quick and dirty Milwaukee Road study I did above show the same thing: that. overall, dieselization generated no savings for the railroads, rather, it increased the economic burden of American railways.

In the case of the Milwaukee, no deductions were made for the net loss associated with the scrapping of undepreciated assets, of nearly $40 million.

And what I have tried to clarify is that it was the timing and extent of dieselization that caused this to happen.

You can see that plainly in the Milwaukee graphs. It would have been possible to dieselize at a rate that caused the finance charges to accrue more slowly. As direct fuel and maintenance costs declined due to traffic losses, it would have been possible to incur the financing charges at such a rate so that the increase would be slower than the decline in other operating costs. In this fashion, railroads could have enjoyed lower operating costs from dieselization rather than higher costs.

What was interesting to me is that financing charges and depreciation associated with the dieselization process became the primary direct cost associated with the dieselization process. That expense quickly came to exceed the maintenance and fuel costs.

And this was during a period when financing charges ranged from between 1% and 3.5%.

My observations above, and Brown's study, don't really look past 1959. What were the net costs during the 1960s for dieselization, at interest charges of 5-10%? Imagine the Milwaukee financing curves shown previously on this list with those charnges. The direct costs would be about 20% higher. Financing charges had become the most costly part of running the trains.

I suppose it raises the question. Would, or could, dieselization have occured but for the inordinately low financing costs unique to that particular time period?

Best regards, Michael Sol

[Anonymous]

Mr. Sol and I were posting at the same time, and I just read his reply.

What I meant by "primary sources" was anything in a railroads archives, any kind of written matter such as reports and studies, etc, created by the company's own internal experts. I meant to use this term to contrast with published work from people outside the company, such as in trade journals, Media, newspapers, etc. Mr. Brown was an outside consultant, so his write-up in the Mechanical Engineeering journal you cite is an out-siders take on the matter. I never intended any criticism of him whatsoever.

[Anonymous]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by cementmixr

This Brown is an outsider looking in. I am not particularly pursuaded by commentary from outsiders on the railroad industry. The woods are full of self-styled railroad experts. In my opinion, the place to start an analysis like this one is with primary source documents as found in a railroad company's archives. Surely every railroad made internal studies on the impact of dieselization. Where are the internal studies? I guess nobody here has read them.

Do you know Brown's background?
Best regards, Michael Sol

Actually, I suspect there are probably not that many internal studies done post-mortem on diesel financing. Probably there were many done prior to it, projecting anticipated returns (these would have been prepared for the board of directors) but probably not that many after-the-fact studies. Companies don't have time and resources to spend writing histories about themselves; the past is a sunk cost, and their focus is on what's ahead.

Someday maybe I will search for the Brown study while at the college library.

--

OldTimer does not have any bad intentions or sinister motives here. He's just talking straight and telling us how he feels. Railroaders talk that way, and to me the honesty is refreshing. It wouldn't be much of a railroad forum if we drove away all the authentic railroaders, would it?

[MichaelSol]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by cementmixr

This Brown is an outsider looking in. I am not particularly pursuaded by commentary from outsiders on the railroad industry. The woods are full of self-styled railroad experts. In my opinion, the place to start an analysis like this one is with primary source documents as found in a railroad company's archives. Surely every railroad made internal studies on the impact of dieselization. Where are the internal studies? I guess nobody here has read them.

Do you know Brown's background?

I am gathering from the lack of a response that the answer is "no," and that the remark was made with no idea as to whether H.F. Brown was an "outsider looking in" or a highly experienced professional engineer with an impressive railroading background. Unfortunately, nothing unusual about uninformed commentary passed off as knowledgeable opinion on these forums.

cementmixr: "I am not particularly pursuaded by commentary from outsiders on the railroad industry."

Of course, if you wanted to pick an experienced railroad organization; one that had pioneered railroading, had introduced railroading to such diverse places as India, Austrailia, South Africa, and other disparate parts of the planet, and you were thinking from an international perspective you might see British Rail as an experienced railroad organization.

Now cementmxr isn't pursuaded by Brown's credentials, but British Rail was. When they looked for the most experienced and respected Professional Engineer they could find to conduct their dieselization study, they went to H.F. Brown.

I guess the woods are indeed full of "self-styled railroad experts" who disparage someone like Brown, when the rail industry itself has a different opinion.

Now, as to the odd comment made above: "tIn my opinion, the place to start an analysis like this one is with primary source documents as found in a railroad company's archives."

I say this is an "odd" comment for two reasons.

The term "primary source documents" is a term of art. In accounting, engineering, and consulting, anyone who utters the phrase "primary source documents" means one thing: original receipts.

And this is one point that makes the remark "odd." Original receipts are practically meaningless in this context, aside from the fact that there would be about four billion of them for any particular railroad during this time span, the receipts tell the investigator just about zilch because the receipt itself contains no information as to how the invoice was handled, what account it was entered on, what special ledger it went to, etc.

The second point that made the remark odd was the fact that, if these "primary source documents" were in fact available in "railroad archives," after 160 or so years of railroading those archives would take up about the equivalent of Kansas for storage space.

For that reason, ICC/STB rules permit the destruction of such "primary documents" after a statutory period of time.

The documents available in railroad archives on such matters are not "primary," and they are not even usually secondary, they are the special ledgers and, if detailed enough, the general ledgers, which are most likely tertiary or even quaternary level documents.

If you have done some studies, you would be aware of that.

On the other hand, if you have never actually participated in the interesting process of conducting a study like that, you would probably have misconceptions about the process, notwithstanding the strong opinions about it all that those misconceptions apparently support.

Best regards, Michael Sol

[Anonymous]

Mr. Sol,

If I am not mistaken you were arguing that switching to diesels caused a drop in ROI, did you not? If not what have you been discussing for 13 pages?

[MichaelSol]

QUOTE: Originally posted by Old Timer
[Sorry, guys. I didn't realize I had to present a hypothesis. My position is that what should have happened did happen (dieselization, that is, if you've forgotten), and it happened for the best, and without it having happened, several railroads wouldn't have made it.

I'm not the one trying to revise history here, and history speaks for itself in spite of what Mr. Brown and his disciples have to say about it. If a good case needs to be made, they're the ones who need to make it, and they've all fallen short.

If what I said represents an "attack" on Mr. Brown, so be it.

Dave, I agree. This represents an intentional misreading. Apparently it is much easier to make up something and shoot it down, than to deal with the real argument, backed up by a statistical record.

I note that OldTimer emphatically dismisses Brown's study.

Hasn't read it he says.

Has lots of opinions about it though.

I think that pretty well sums up OldTimer's approach to the industry: a series of half-connected predjudices conveyed by the virulent slander of a respected senior railroad consulting engineer, underscored by no supporting statistical data of his own, compounded by a fundamental misunderstanding of the stated premise.

It certainly makes an interesting resume.

However, it's not as tough to figure out as OldTimer makes it.

Klahm posted this summary:

QUOTE: Originally posted by Klahm
What I take away from Michael's extensive comments is that dieselization, as implemented by American railroads, extracted a high price in terms of short- and mid-term total financial performance, despite the operational savings that most of us have heard or presumed to be the case, because of the capital cost and unexpectedly short product lifetime of the first-generation (and, some might argue, second-generation) diesel-electric locomotives. ... A more gradual and intelligent approach to the transition would have resulted in better bottom-line performance.

And while that represents about the fifth iteration of the concept that OldTimer has been unable or unwilling to grasp, that version sums it up nicely.

Best regards, Michael Sol

[Randy Stahl]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by CSSHEGEWISCH

Keeping the newer steam power is service until it was fully depreciated makes sense if that fact is taken in isolation. Other factors to be considered include the added cost of maintaining two sets of maintenance facilities at any location where steam would be operated unless steam and diesel operation would be strictly segregated, ....

This never happened.

As a practical matter, Milwaukee Road operated maintenance facilities at the following locations where three types of motive power -- steam, diesel, and electric -- intermingled just fine, often sitting on adjacent service platforms: Harlowton, Deer Lodge, Avery, Othello, and Tacoma.

Most railroads mixed steam and diesel at existing facilities during the 10-15 year transition just fine.

On the other hand, the "need" to appear modern may have driven some decisions to buid new "diesel" facilities, although their was nothing special about them: what was happening was that the run-through design was replacing the roundhouse, which had nothing to do with dieselization.

Best regards, Michael Sol

However , roundhouses will always be THE most efficient way to service power. Take it from someone who has worked in a wide variety of facilitys.
Randy

[MichaelSol]

QUOTE: Originally posted by CSSHEGEWISCH

Keeping the newer steam power is service until it was fully depreciated makes sense if that fact is taken in isolation. Other factors to be considered include the added cost of maintaining two sets of maintenance facilities at any location where steam would be operated unless steam and diesel operation would be strictly segregated, ....

This never happened.

As a practical matter, Milwaukee Road operated maintenance facilities at the following locations where three types of motive power -- steam, diesel, and electric -- intermingled just fine, often sitting on adjacent service platforms: Harlowton, Deer Lodge, Avery, Othello, and Tacoma.

Most railroads mixed steam and diesel at existing facilities during the 10-15 year transition just fine.

On the other hand, the "need" to appear modern may have driven some decisions to build new "diesel" facilities, although there was nothing special about them: what was happening was that the run-through design was replacing the roundhouse.

Best regards, Michael Sol

[Anonymous]

Sayeth futuremodal, again:

"This is just amazing.

Old Timer still is suggesting that Brown, Sol, et al are claiming that dieselization was bad. Hmmm, senility or obfuscation on Old Timer's part?

I'll give it one last shot. Here it goes...."

I went back and read my post, and the amazing part is that you don't get it.

So, having better things to do, I'll leave you with your ideas. At this late date, they're pointless, anyway.

Old Timer

[MJ4562]

What exactly is the useful life of a steam locomotive and what type of repairs have to be done during that life?

[MichaelSol]

Oh, I think you're probably right. The saying is just that, an old saying. However, I do think that at the slow speeds and needs of yard work, I am sure without really knowing much about steam that the diesel-electric was better. The power curves show that, but, a steam engineer who ran one might have a different story. Never underestimate an operator's knowledge of the machine.

Best regards, Michael Sol

[AnthonyV]

I have heard the phrase "diesels can't pull what they can start and steam can't start what they can pull" numerous times. I have also read statements about Diesels being good for drag service but steam can really pull at speed.

Wouldn't a Diesel pull the same tonnage at the same speed as a steam locomotive as long as the hp ratings are the same? If the hp is the same, wouldn't this translate into the same tractive effort for a given speed?

For example, if a set of Diesels is rated at say, 6,000 hp and a steam loco is rated at a peak of 6,000 hp at 40 mph, wouldn't they pull the same tonnage at 40 mph since they would have the same tractive effort at that point?

Also, wouldn't Diesels actually pull more over all other speeds since the power output is constant over most of its speed range while the steam loco's power output varies greatly with speed?

Finally, doesn't this mean that the Diesels can always have more trailing tonnage than a steam loco with equal power?

Is this correct or am I missing something?

Thanks and happy New Year!

Anthony V.

[Anonymous]

QUOTE: Originally posted by Old Timer

Sayeth futuremodal:

"With that being said, Mr. Sol has done a far better job of presenting a clear consise hypothesis than has Old Timer. Hands down."

Sorry, guys. I didn't realize I had to present a hypothesis. My position is that what should have happened did happen (dieselization, that is, if you've forgotten), and it happened for the best, and without it having happened, several railroads wouldn't have made it.

I'm not the one trying to revise history here, and history speaks for itself in spite of what Mr. Brown and his disciples have to say about it. If a good case needs to be made, they're the ones who need to make it, and they've all fallen short.

If what I said represents an "attack" on Mr. Brown, so be it.

Old Timer

This is just amazing.

Old Timer still is suggesting that Brown, Sol, et al are claiming that dieselization was bad. Hmmm, senility or obfuscation on Old Timer's part?

I'll give it one last shot. Here it goes....

1. Dieselization was a good thing. No one is arguing anything to the contrary.

2. Going into massive debt for new technology that has no established long term track record is a bad thing. Do you wi***o argue that point to the contrary? If not, then state so for the record.

3. Junking older techology that has not used most of it's useful service life can often result in not meeting those original investment goals. You paid good money for those things, so if you don't use them to their full depreciation, your investment on that technology was wasted. Ergo, your new investment not only has to pay for itself, it also has to make up for the wasted investment as well in order to be a justified expenditure. If it doesn't, you've just compounded the wasted investment. Do you wi***o argue this point to the contrary? If not, state so for the record.

Do you get it now, Old Timer?

Dieselization wasn't bad. However, selling out to EMD en masse did result in a corresponding drop in ROI, as one should expect when corporations go into debt for unestablished technology. Getting rid of equipment that still had years of useful service life only compounded the debt accumulation.

[MichaelSol]

QUOTE: Originally posted by cementmixr

This Brown is an outsider looking in. I am not particularly pursuaded by commentary from outsiders on the railroad industry. The woods are full of self-styled railroad experts. In my opinion, the place to start an analysis like this one is with primary source documents as found in a railroad company's archives. Surely every railroad made internal studies on the impact of dieselization. Where are the internal studies? I guess nobody here has read them.

Do you know Brown's background?

Best regards, Michael Sol

[Anonymous]

This Brown is an outsider looking in. I am not particularly pursuaded by commentary from outsiders on the railroad industry. The woods are full of self-styled railroad experts. In my opinion, the place to start an analysis like this one is with primary source documents as found in a railroad company's archives. Surely every railroad made internal studies on the impact of dieselization. Where are the internal studies? I guess nobody here has read them.

[traintownofcowee]

Compare SP 4449 to a GP-38.
Which looks better?
Which is cheaper?
Y am I telling U guys this?
U should know this!
[:)][8D][:D][^][:I][:O][8)][|)][:P][;)][alien][X-)][bow][%-)][(-D][swg][:-^][{(-_-)}]
Oh well I'm off to sleep.[zzz]
Well...

[Anonymous]

nothing coudl ever match the raw power of a steam loco, no diesel ever will!!!

[Anonymous]

Sayeth futuremodal:

"With that being said, Mr. Sol has done a far better job of presenting a clear consise hypothesis than has Old Timer. Hands down."

Sorry, guys. I didn't realize I had to present a hypothesis. My position is that what should have happened did happen (dieselization, that is, if you've forgotten), and it happened for the best, and without it having happened, several railroads wouldn't have made it.

I'm not the one trying to revise history here, and history speaks for itself in spite of what Mr. Brown and his disciples have to say about it. If a good case needs to be made, they're the ones who need to make it, and they've all fallen short.

If what I said represents an "attack" on Mr. Brown, so be it.

Old Timer

[Anonymous]

QUOTE: Originally posted by nanaimo73

Futuremodal-
Old Timer is far more knowledgeable on this topic than you or I, and has had over 30 articles published in Trains magazine.

Well, you and I and most everyone else on this forum are less knowledgeable than those who are part and parcel of long term involvement in railroad operations. My opinion on this steam vs diesel topic has been formed by all the contributions presented.

With that being said, Mr. Sol has done a far better job of presenting a clear consise hypothesis than has Old Timer. Hands down.

There is also more to this topic that I have an inside track on that I would venture no one else has, and that is my current access to an analogous situation in the electric utility business. The steam vs diesel argument of old is mirrored by the analog vs AMR meter debate in the electric utility sector. Those electric (and gas) utilities that are rushing pell mell to automate all their meters are having the same kind of financial snags that the railroads had when they rushed pell mell to dieselize, and it can be summarized thusly - when you trash perfectly good older widgets (with years of depreciation left to go) to replace them with higher cost new widgets (and go into debt to purchase the new widgets en masse), you're going to have unintended consequences: (1) your credit standing takes a plumment, and (2) you still have no long term record to see how the new widgets will perform over the long term.

Now, as most folks will aver, AMR's are of course "better" than analog meters because we're all going to get rid of a lot of meter reading labor, and all the little mistakes that human meter readers make, and that should in theory result in massive savings for our utility. It's the same with diesels - diesels are of course "better" than steam engines, because the railroads were able to get rid of alot of steam locomotive labor, and that in theory resulted in massive savings for the Railroad.

But, it didn't work out that way in the railroad business, and it ain't working out that way in the utility sector. The reason? Such things need to be "massaged" into the operating framework by normal attrition, not shoved down the industry's throat. New technologies NEED a good long breaking in period to see how such newbies perform over the long run BEFORE they are allowed full control of their designated area of operation, and correct any snafu's and shortcomings that crop up. Once all is tried and true, by that time you should be able to fully implement the new technology WITHOUT massive layoffs, WITHOUT junking older technologies before their service life is ended, AND WITHOUT carrying a brand new mountain of debt into the mix.

But, as we all know, management sometimes can get giddy with dreamy eyes over new technologies, exsascerbated by the inherent need to "keep up with the Jones'".

Fatalism is it's own flaw.

[germanium]

Thank you, Michael, for your carefully considered and informative reply. Your last paragraph suggests an interesting exercise for someone doing a Ph.D in Transportation Studies.

Again, thanks and regards,
Germanium

[MichaelSol]

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by MichaelSol

Murphy, you had asked a question directly about Brown's study a whiile back. I'm not ignoring you. I looked through about five boxes of old electrification and related studies over Christmas and couldn't locate Brown's study. Only 15 more boxes to go. My fear is that I took Brown's study out of the boxes a couple of years ago and put it "someplace where I wouldn't lose it."

Wherever that might be, I am sure it is still there.

However, I will come up with it one way or another and see what it actually says regarding your quaery.

I'm not 100% sure that was my question. I asked about how the dieselization process worked fo Santa Fe, with the *bad water* issues that I've read about.
Thanks

Brown had specifically looked at the Santa Fe as one of the railroads in his study, and so if it was relevant, hopefully he mentioned it as it is an interesting question.

Best regards, Michael Sol

[Murphy Siding]

QUOTE: Originally posted by MichaelSol

Murphy, you had asked a question directly about Brown's study a whiile back. I'm not ignoring you. I looked through about five boxes of old electrification and related studies over Christmas and couldn't locate Brown's study. Only 15 more boxes to go. My fear is that I took Brown's study out of the boxes a couple of years ago and put it "someplace where I wouldn't lose it."

Wherever that might be, I am sure it is still there.

However, I will come up with it one way or another and see what it actually says regarding your quaery.

I'm not 100% sure that was my question. I asked about how the dieselization process worked fo Santa Fe, with the *bad water* issues that I've read about.
Thanks

Best regards, Michael Sol

[MichaelSol]

QUOTE: Originally posted by germanium

May I pose some questions for you knowledgable gentlemen ?
The diesel locomotive at the time of Mr Brown's study was still a relatively new tool, and like most new tools expensive in purchase costs and spares per unit, whereas the the steam locomotive was a known quantity.
Did the relative simplicity of steam flatter it in terms of maintenance costs, whereas the diesel needed first-class maintenance etc (including hiring/retraining the specialists to service it) ?
In the ru***o acquire diesels, was standardisation overlooked, thus acquiring umpteen diesel classes and inflating maintenance costs ?
Many steam maintenance and servicing facilities were probably old and fully depreciated, thereby flattering steam maintenance costs - is this a tenable assumption?
Lastly, how would the costs of a modern-day diesel fleet compare with Mr Brown's steam cost figures (allowing of course for inflation etc) ?

Well, those are interesting questions. Hopefully someone with some practical experience with steam has some answers, as I was never around steam and know nothing about it from the standpoint of the expertise of the maintenance people.

The depreciation of the facilities, however, raises a point. The old roundhouses and associated facilities were fully depreciated out. They represented no net expense to the Company from a financing standpoint, and were not a deduction from operating income since there was no depreciation left. This had the effect of raising the ROI.

However, as Brown pointed out, some $2.7 Billion in new facilities were required for dieselization. That is an additional economic burden on the railroads. By the mid-1960s, this had increased again to approximately $4 Billion. Milwaukee added a brand new diesel house in St. Paul in 1974 to replace its last transcontinental repair facility at Deer Lodge, built in 1908. All these investments, again, had a negative effect on ROI.

All costs that don't show in the cost per hp charges due to dieselization.

Now, the cost of the modern diesel fleet compared to steam. That would be an interesting exercise no doubt. Trains had an interesting article back in 1974 or so, if I recall correctly, "Did We Scrap Steam Too Soon?" It's been so long, though, I can't remember what it said, but it may have identified some key characteristics of "modern" steam that could be useful for such an analytical study.

Best regards, Michael Sol

[germanium]

May I pose some questions for you knowledgable gentlemen ?
The diesel locomotive at the time of Mr Brown's study was still a relatively new tool, and like most new tools expensive in purchase costs and spares per unit, whereas the the steam locomotive was a known quantity.
Did the relative simplicity of steam flatter it in terms of maintenance costs, whereas the diesel needed first-class maintenance etc (including hiring/retraining the specialists to service it) ?
In the ru***o acquire diesels, was standardisation overlooked, thus acquiring umpteen diesel classes and inflating maintenance costs ?
Many steam maintenance and servicing facilities were probably old and fully depreciated, thereby flattering steam maintenance costs - is this a tenable assumption?
Lastly, how would the costs of a modern-day diesel fleet compare with Mr Brown's steam cost figures (allowing of course for inflation etc) ?