The American Railway: Its Construction, Development, Management, and Appliances

by Thomas Curtis Clarke

For while the life of a corporation is perpetual, its powers are constrained, and the individuals exercising them are constantly changing. It is but an artificial individual existing for certain purposes only, and, as it lacks some human qualities, all its methods of doing business are influenced thereby. The business affairs of an individual, for instance, are greatly simplified by his memory of his transactions from day to day and from year to year. But a corporation having no natural memory, all of its transactions and relations must be minutely and systematically noted in its archives. Every contract and obligation must be of record, all property bought or constructed must go upon the books, and, when expended or used up, must go off in due form; and especially must an accurate system of checks guard all earnings and expenditures, and a comprehensive system of book-keeping consolidate innumerable transactions into the great variety of boiled-down figures and statistics necessary for officers and stockholders to fully understand what the property is doing.

Under such circumstances, then, our railroads and their systems of organization and management, like the Darwinian Topsy, have not "been made" but have "growed."

Naturally, both the direction and extent of the development have varied in different localities and under different conditions. Within the limits of this article it would be impossible to give anything like an exhaustive or complete account of the organization, distribution of duties, systems of working, and of checks in the various departments of even a single road. Most roads publish more or less elaborate small volumes of regulations on such subjects for the use of their various employees. The task would also be endless to describe technically the variations of practice and of nomenclature in different sections and on different systems. The shades of difference, too, between managers, superintendents, or masters; comptrollers, auditors, book-keepers, and accountants; secretaries, cashiers, treasurers, and paymasters in different localities would be tedious to draw. A technical account of them would be almost a reproduction of the volumes above-mentioned. I can only attempt to outline and illustrate very briefly the general principles which underlie the present practice, and are more or less elaborated as circumstances may require.

The principal duties connected with the management of a railroad may be classified as follows:

1. The physical care of the property.

2. The handling of the trains.

3. The making rates and soliciting business.

4. The collection of revenue and keeping statistics.

5. The custody and disbursement of revenue.

The president is, of course, the executive head of the company, but in important matters he acts only with the consent and approval of the Board of Directors, or of an executive committee clothed with authority of the board, which may be called the legislative branch of the management. More or less of the executive power and supervision of the president may be delegated to one or more vice-presidents. Often all of it but that relating to financial matters is so delegated, but, as their functions are subdivisions of those of the president, they have no essential part in a general scheme of authority.