Per Diem and the NYO&W


Steve Lucas <stevelucas3@...>
 

There were so many nails in the coffin of the NYO&W. Its employees
were working for "substantially less than the national wage in an
attempt to save their jobs." Yet the New York State Full Crew Act
mandated a six-man crew for trains more than 25 cars long. And the
US government wanted to seize the road for non-payment of Railroad
Retirement taxes.

A few quotes from David P. Morgan's "Obituary of an Old Woman", from
July, 1957 Trains Magazine--

"The statistics of it all were sad. O&W was delinquent on payments
for its aging diesels, paid substandard wages (and spent the
withholding taxes to run the railroad), owned a tiny fleet of 82
freight cars (of which half were bought prior to 1919), had laid only
half a mile of new rail since World War II. It took a middle-aged
broker to remember the last dividend, paid in 1925, and the bonds had
been so much wallpaper since O&W entered bankruptcy in 1937. All of
which was expressed in an operating ratio which moved inexorably up
from the high 80's to 107.36 per cent in 1955".

"Nowhere to nowhere and upgrade all the way--with an afterthought of
a branch keeping the sheriff away. The wonder is not that O&W died
March 29, 1957, but that it was built in the first place. History
was, in the end, unforgiving."

But the O&W is such an engaging road for the modeller. My regret is
that the closest that I'll get to modelling it that I want to have
one or two O&W hopper cars (mandatory STMFC content) on my layout.
Luckily, RMC ran an article on modelling these cars a few years ago.

Steve Lucas.

-- In STMFC@..., "Bill Schneider" <branchline@...> wrote:

Get the facts straight Tim - its state highway 17, not 7. And the
O&W did
owe a ton of back taxes that the state stopped forgiving when they
needed
the ROW for the roadway.... :>)

Seriously, from what I understand operating costs and wages ate up
nearly
all of the revenue in the later years. Considering that the O&W's
route
really was fairly tortuous compared to the Erie's which ran almost
parallel,
I'm always amazed that they managed to get ANY bridge traffic, but
there
actually was a fair amount in the '50's. However, nearly all of the
revenue
came from the Scranton-Maybrook line, and yet there were other
lines and
branches that continued to be maintained and which drew down the
company
coffers despite the lack of income from them.

I'm sure that copies of the annual reports are available from the
O&W
Society if anybody REALLY wants to pursue this...

Bill Schneider

Heck we might as well go back to conspiracy theory -- that NYO&W
was doomed because NY wanted its right of way for state highway
#7.

Tim O'Connor


John Hile <john66h@...>
 

--- In STMFC@..., timboconnor@... wrote:


Tim,


Boy, I was having trouble yesterday afternoon! Those figures are
national averages for 1941...not NYO&W figures.


John Hile


Malcolm H. Houck
 

Who was feeding NYO&W from the west at Scranton? Lackawanna?

Lehigh Valley, via Austin Junction at the end of the Capouse Branch. The run
was then from Scranton to Maybrook, with traffic thence over the CNE Bridge
to New England via the New Haven (50.5% common stockholder [plus other
holdings in preferred] in the NYO&W and after the Vanderbilt-Mellen-Morgan "Corsair
Agreements").

In Tony Koester's softcover Kalmbach book on planning for realistic
operation he reproduces an image of a routing schedule that includes one of the NYO&W
symbol freights; -- running NKP-LV-NYO&W-NH from the Midwest to New England;
-- an "Alphabet Route."

Mal Houck



**************It's only a deal if it's where you want to go. Find your travel
deal here.
(http://information.travel.aol.com/deals?ncid=aoltrv00050000000047)


Tim O'Connor
 

Who was feeding NYO&W from the west at Scranton? Lackawanna?

-------------- Original message ----------------------
From: "Bill Schneider" <branchline@...>
Get the facts straight Tim - its state highway 17, not 7. And the O&W did
owe a ton of back taxes that the state stopped forgiving when they needed
the ROW for the roadway.... :>)

Seriously, from what I understand operating costs and wages ate up nearly
all of the revenue in the later years. Considering that the O&W's route
really was fairly tortuous compared to the Erie's which ran almost parallel,
I'm always amazed that they managed to get ANY bridge traffic, but there
actually was a fair amount in the '50's. However, nearly all of the revenue
came from the Scranton-Maybrook line, and yet there were other lines and
branches that continued to be maintained and which drew down the company
coffers despite the lack of income from them.

I'm sure that copies of the annual reports are available from the O&W
Society if anybody REALLY wants to pursue this...

Bill Schneider

Heck we might as well go back to conspiracy theory -- that NYO&W
was doomed because NY wanted its right of way for state highway #7.
Tim O'Connor


Tim O'Connor
 

John, thanks for posting that. I think by the mid-50's labor costs had
escalated substantially in spite of dieselization, so the "net income"
disappeared. I'm surprised really to see NYO&W had almost a 20%
gross margin in 1941.

Tim O'Connor

-------------- Original message ----------------------
From: "John Hile" <john66h@...>
--- In STMFC@..., timboconnor@... wrote:


To blame the NYO&W's demise on per diem is a real stretch!
Tim,

You are absolutely correct. My choice of words ("Apparently not") was
a poor one. I should have said something like..."Apparently NYO&W's
share of revenue was not enough to offset its total operating costs,
including that of any per diem deficits."

In fact, 1941 statistics for average distribution of revenue between
types of expense and net profit is as follows:

41.1% Labor (Salaries and Wages)
16.1% Other Materials and Supplies Misc.
10.2% Taxes
5.7% Fuel
4.4% Depreciation
2.5% Hire of Equipment and Joint Facility Net Rentals
1.3% Loss and Damage, Injury to Persons, Insurance & Pensions

18.7% Net Operating Income

Note that "Car Hire" is the process which results in per diem charges.

Above numbers are from "Analysis of Railroad Operations", Joseph L.
White, Simmons-Boardman, 1946

John Hile
Blacksburg, VA


Bill Schneider <branchline@...>
 

Get the facts straight Tim - its state highway 17, not 7. And the O&W did owe a ton of back taxes that the state stopped forgiving when they needed the ROW for the roadway.... :>)

Seriously, from what I understand operating costs and wages ate up nearly all of the revenue in the later years. Considering that the O&W's route really was fairly tortuous compared to the Erie's which ran almost parallel, I'm always amazed that they managed to get ANY bridge traffic, but there actually was a fair amount in the '50's. However, nearly all of the revenue came from the Scranton-Maybrook line, and yet there were other lines and branches that continued to be maintained and which drew down the company coffers despite the lack of income from them.

I'm sure that copies of the annual reports are available from the O&W Society if anybody REALLY wants to pursue this...

Bill Schneider

Heck we might as well go back to conspiracy theory -- that NYO&W
was doomed because NY wanted its right of way for state highway #7.
Tim O'Connor


John Hile <john66h@...>
 

--- In STMFC@..., timboconnor@... wrote:


To blame the NYO&W's demise on per diem is a real stretch!








Tim,

You are absolutely correct. My choice of words ("Apparently not") was
a poor one. I should have said something like..."Apparently NYO&W's
share of revenue was not enough to offset its total operating costs,
including that of any per diem deficits."

In fact, 1941 statistics for average distribution of revenue between
types of expense and net profit is as follows:

41.1% Labor (Salaries and Wages)
16.1% Other Materials and Supplies Misc.
10.2% Taxes
5.7% Fuel
4.4% Depreciation
2.5% Hire of Equipment and Joint Facility Net Rentals
1.3% Loss and Damage, Injury to Persons, Insurance & Pensions

18.7% Net Operating Income

Note that "Car Hire" is the process which results in per diem charges.

Above numbers are from "Analysis of Railroad Operations", Joseph L.
White, Simmons-Boardman, 1946



John Hile
Blacksburg, VA


Tim O'Connor
 

Guys, the revenue for a 145 mile carload was not THAT small. Even
if it took them two days to get the car over the road, the $5 and change
per diem was more than covered by the $50 or more in gross revenue.

All you have to do is find an NYO&W annual report for the period. It
probably shows the total for revenues and expenditures. On most
railroads of the period, more than 50% of revenues went straight to
wages of employees. I suspect because of its short haul that NYO&W
paid out a higher percentage of wages than other carriers.

To blame the NYO&W's demise on per diem is a real stretch! I note
that the L&NE died just a couple of years later; operated in the same
area; and no one is claiming that per diem killed the L&NE.

Heck we might as well go back to conspiracy theory -- that NYO&W
was doomed because NY wanted its right of way for state highway #7.

Tim O'Connor

-------------- Original message ----------------------
From: "John Hile" <john66h@...>
--- In STMFC@..., "Gene Green" <bierglaeser@...> wrote:

Wouldn't the per diem be offset by the NYO&W's share of the revenue
for whatever was being shipped?




Apparently not. Following is from Kalmbach's "The Historical Guide to
North American Railroads"...

"The NYO&W enjoyed a brief postwar surge of business, but NYO&W's
division of the revenue wasn't enough to keep the rest of the road in
business. The originating carrier gets most of the revenue from a
freight move. To make money as a bridge carrier you need lots of
business and a long haul - longer than the 145 miles from Scranton to
Campbell Hall."


John Hile
Blacksburg, VA


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John Hile <john66h@...>
 

--- In STMFC@..., "Gene Green" <bierglaeser@...> wrote:

Wouldn't the per diem be offset by the NYO&W's share of the revenue
for whatever was being shipped?




Apparently not. Following is from Kalmbach's "The Historical Guide to
North American Railroads"...

"The NYO&W enjoyed a brief postwar surge of business, but NYO&W's
division of the revenue wasn't enough to keep the rest of the road in
business. The originating carrier gets most of the revenue from a
freight move. To make money as a bridge carrier you need lots of
business and a long haul - longer than the 145 miles from Scranton to
Campbell Hall."


John Hile
Blacksburg, VA