True Cost-Finding—What It Can Do for the Railroads

NO uniform system of cost-finding has ever been nationally 1 v applied to American railroads.One is tempted to make this statement much stronger and say that on no American railroad is there to be found a system of cost-finding comparable to the better systems in vogue in other industries.Such cost- finding would improve efficiency and service, reduce expenses, furnish a scientific basis for freight and passenger rates, inspire public confidence in the management, and ultimately bring about standard operating methods.The cost factor is the best measure of performance known, regardless of whether the performance desired be war-making capacity, reasonable freight or passenger rates, economy in labor or material, returns on the dollar invested, or any other. EXISTING FALLACIES REGARDING COST-FINDINGIn discussing the problem of cost-finding there are three fallacies which must first be cleared away:1.The fallacy that confuses statistics with costs-the great mass of operating statistics pertaining to railroads have little bearing on true costs.8. The fallacy that it is difficult to apply cost-finding to rail- road operations, and that a national standard would upset present management.3. The fallacy that cost-finding is purely a money-saving propo- sition.1.The United States Railroad Administration has already installed a system of uniform operating statistics, through its Division of Operation which is described elsewhere in this volume.This seems to be admirably designed but the reports show in

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