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At a General Session of the INTERSTATE COMMERCE COMMISSION, Held at its Office in Washington, D. C., on the 1st Day of June, 1908.

[Figures in brackets on right-hand side of pages indicate folios of original issue.] The subject of a Uniform System of Accounts to be prescribed for and kept by carriers being under consideration, the following order was entered:

It is ordered, That the Supplement to the Classification of Operating Expenses, Third Revised Issue, and the text pertaining thereto, prepared under the direction of this Commission by Henry C. Adams, in charge of Statistics and Accounts, and embodied in printed form to be hereafter known as Supplement to the Third Revised Issue, a copy of which is now before this Commission, be, and the same is hereby, approved; that a copy thereof duly authenticated by the Secretary of the Commission be filed in its archives, and a second copy thereof, in like manner authenticated, in the office of the Division of Statistics and Accounts; and that each of said copies so authenticated and filed shall be deemed an original record thereof.

It is further ordered, That the said Supplement to the Third Revised Issue be, and is hereby, prescribed for the use of carriers by rail (exclusive of electric [5 railways) subject to the provisions of the act to regulate commerce as amended June 29, 1906, in the keeping and recording of their operating expense accounts; that each and every such carrier and each and every receiver or operating trustee of any such carrier be required to keep operating expense accounts in conformity therewith; and that a copy of said Supplement to the Third Revised Issue be sent to each and every such carrier and to each and every receiver or operating trustee of any such carrier.

It is further ordered, That the rules contained in the said Supplement to the Third Revised Issue are, and by virtue of this order do become lawful rules according to which the said operating expenses are defined: Provided, however, That nothing in this order shall be construed as relieving any such carrier or any receiver or operating trustee of any such carrier from observing all rules contained in the Classification of Operating Expenses, Third Revised Issue, which are not changed by the rules contained in said Supplement to the Third Revised Issue.

It is further ordered, That July 1, 1908, be, and is hereby, fixed as the date on which said Supplement to the Third Revised Issue shall become effective.



To Carriers Concerned:

Interstate Commerce Commission,
Division of Statistics and Accounts,
Washington, June 16, 1908.

The first revised issue of the Classification of Operating Expenses took effect on July 1, 1894, and the second revised issue became effective on July 1, 1901. The Classification now in force dates from July 1, 1907.

It is found advisable to make a few changes in this Classification to become effective on July 1, 1908, and it is the purpose of this Supplement to the Third Revised Issue to indicate such changes. They are not of sufficient importance to warrant the publication of a fourth revised issue at this time. In this Supplement will be found, under the title of each primary account in the prescribed Classification of Operating Expenses, a statement, first, of the changes made in the text descriptive of the several accounts, and, second, reference to the cases published in Accounting Bulletin No. 1, which furnish an explanation of many of the amendments to the original text herewith promulgated. It thus appears that this Supplement will serve as an index to the cases bearing upon the interpretation of the several primary accounts, as well as authority for modifications in the text of such accounts.

The following are the important changes in the Classification:

(a) The three accounts Work Equipment-Repairs," "Work Equipment-Renewals," and "Work Equipment-Depreciation," which, in the Third Revised Issue, are included as primary accounts under the general account "Maintenance of Way and Structures,'' are transferred to the general account "Maintenance of Equipment.' [7 (b) The two accounts "Equipment Borrowed-Dr." and "Equipment LoanedCr.," being primary accounts under the general account "Maintenance of Equipment," are eliminated. This elimination, also, the Clearing Account-Hire of Equipment. The elimination of these accounts means that the separation of the per diem for interchanged cars, and of the rental charge for hire of equipment, between operating expenses and income account will no longer be required, the entire amounts of payments and receipts for equipment interchanged or otherwise acquired or let out for use being carried directly to the Income Account.

(c) The insurance accounts formerly appearing as primary accounts under the general accounts now appear as a consolidated account under "General Expenses." (d) The account "Stock Yards and Grain Elevators" under "Transportation Expenses" has been eliminated, as the expense which might be classified under that head is covered by the Transportation Expense accounts "Station Employees'' and "Station Supplies and Expenses."'

(e) A note has been added to the accounts applying to the operation of electric divisions stating that carriers who wish to subdivide those accounts should use appropriate accounts as prescribed in the Classification of Operating Expenses for Electric Railroads, which becomes effective on October 1, 1908. The accounts in the Steam Road classification and the corresponding accounts in the Electric Road classification are as follows:

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Correspondence with this office during the past year has indicated a desire, on the part of a large number of carriers doing a relatively small business, for a condensed Classification of Operating Expenses. A condensed Classification [9 has accordingly been provided under the title "Third Revised Issue, Condensed, containing forty-four accounts. Inasmuch, however, as this Classification is designed for switching and terminal roads, as well as for small commercial roads not forming parts of large operating systems, and inasmuch as, further, many of these roads will have no use for the joint-facilities accounts, the actual number of primary accounts which this class of roads will be obliged to keep will, in many cases, not exceed twenty-five or thirty.

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