To Carriers: INTRODUCTORY LETTER. Interstate Commerce Commission, This Classification of Operating Revenues, with the text pertaining thereto, is issued in accordance with an order of the Interstate Commerce Commission, a copy of which will be found immediately preceding this letter. As indicating the purpose of this Classification, it will be observed that the primary accounts are so drawn as to show, first, the amount earned for the transportation of freight, upon which should be based the computation of revenue per ton per mile and of revenue per freight-train mile; second, the amount earned for the transportation of passengers, from which may be computed the revenue per passenger per mile; third, the amount earned from all transportation on passenger trains, from which may be computed the revenue per train mile; and, fourth, other revenue from transportation service, namely, switching revenue, special service train revenue, and miscellaneous transportation revenue. In addition to revenue from transportation, the Revenue Account includes eight additional primary accounts which cover revenue from services incident to transportation, the expenses incident to which are included in Operating Expenses. 66 The aggregate of the revenues covered by the nineteen (19) primary accounts listed in the Classification gives the "Total Operating Revenues" for the period under consideration, which amount being reduced by Operating Expenses" leaves "Net Operating Revenues." If from "Net Operating Revenues" taxes be [9 deducted, the remainder, called “Operating Income,' will represent the amount with which the Income Account is properly begun. It should be especially noted that Taxes are not included in Operating Expenses, and should not be included when computing the ratio of Operating Expenses to Operating Revenues. The only charges in the nature of taxes included in the Operating Accounts are assessments for highways, sidewalks, sewers, and the like, which should be carried to the appropriate accounts in Operating Expenses, Betterments, or Construction, as the case may require. This Classification was worked out with the coöperation of the accredited representatives of the Association of American Railway Accounting Officers, and, with a few minor exceptions, embodies their recommendations relative to the proper classification of Operating Revenues. Henry C. Adams, In charge of Statistics and Accounts. [10 14 14 14 14 7. 8. Other Passenger-Train Revenue 9. Switching Revenue 10. Special Service Train Revenue 11. Miscellaneous Transportation Revenue II. Revenue from Operations Other than Transportation Station and Train Privileges. 12. 13. Parcel-Room Receipts 14 14 14 14 16. Car Service 18. Rents of Buildings and Other Property. 15 15 15 15 [11 * Numbers refer to folios in brackets on right-hand side of pages, which are inserted to preserve page numbers of original issue. TEXT OF CLASSIFICATION OF OPERATING REVENUES. I. REVENUE FROM TRANSPORTATION. 1. FREIGHT REVENUE. This account includes amounts earned by a carrier for the transportation of freight. To this account should be credited a carrier's proportion of receipts for freight transportation; also overcollections made in excess of proper rates, such overcollections to be held subject to claim. To this account should be charged overcharges paid resulting from the use of erroneous rates, weights, or classification; amounts paid for switching charges absorbed; authorized allowances and localized freight arbitraries; also amounts paid for switching or to transfer companies for completing a haul or effecting store-door deliveries, when the cost of such service is included in the rate charged by the carrier; uncollected earnings on freight destroyed in transit and on short and lost freight; also uncollectible undercharges determined after delivery has been made. 2. PASSENGER REVENUE. This account includes amounts earned by a carrier for the transportation of passengers. To this account should be credited a carrier's proportion of receipts from the sale of tickets (including tickets for corpses) and the collection of cash fares; also overcollections made in excess of determined rates, such overcollections to be held subject to claim. The account should be charged with amounts paid for fares refunded; tickets redeemed; also amounts paid for transferring passengers and baggage between stations or depots, except in cases where the transfer of both passengers and baggage is provided in the division of the through rate. Note A.-Cash fare penalty collections made by conductors and the proportion of amounts collected on sale of mileage tickets and mileage credentials subject to refund should not be credited to Passenger Revenue. Note B.-Passenger Revenue should be credited with interchangeable mileage tickets only as the mileage therefrom is honored for transportation. Re. [12 ceipts from interchangeable mileage books when sold should be credited to an open account, which account should be charged and Passenger Revenue credited as the mileage is honored. Note C.-When a lessee company transports passengers over the tracks of another carrier on the basis of a proportion of revenues, it should include the entire compensation in its revenues and statistics, charging the appropriate joint facilities expense and rental accounts with the amount paid the lessor company, and the lessor company should credit the same accounts. 3. EXCESS BAGGAGE REVENUE. This account includes amounts earned by a carrier for the transportation of baggage in excess of free authorized allowances; also packages, articles, dogs, etc., usually transported in baggage cars, for which a charge is made. To this account should be charged all baggage refunds. 4. PARLOR AND CHAIR CAR REVENUE. This account includes amounts earned by a carrier in fares collected from passengers for seats in parlor, observation, chair, and other special passenger cars operated by railway companies when the expenses of operating such cars are not separable from the expenses of operating trains. To this account should be charged authorized refunds and tickets redeemed. Note. When the expenses of operating cars of the above classes are separable from the expenses of operating trains, the operation of such cars should be treated as an "Outside Operation." 5. MAIL REVENUE. This account includes amounts earned by a carrier for the transportation of mails and for the use of railway post-office cars, special facilities, and bonuses for special mail transportation. To this account should be charged fines and penalties imposed by the Government when not collected from agents or employees. This account includes amounts earned by a carrier for transportation and for. facilities on trains and at stations incident to the transportation of express matter, not including the separate rents of offices at stations. (See account No. 18, "Rents of Buildings and Other Property.'') When a railway company transacts an express business through its regular railway organization, the earnings therefrom should be credited to this account. 7. MILK REVENUE (ON PASSENGER TRAINS). This account includes amounts earned by a carrier for the transportation of milk and cream on passenger trains. To this account should be charged refunds and overcharges on milk and cream so carried. 8. OTHER PASSENGER-TRAIN REVENUE, [13 To this account should be credited all amounts earned by a carrier incident to the operation of passenger trains not otherwise provided for. This account includes amounts earned by a carrier for switching service performed on the basis of tariffs. To it should be charged all overcharges on such switching. 10. SPECIAL SERVICE TRAIN REVENUE. This account includes amounts earned by a carrier for running chartered trains, either on a basis of a rate per mile or a lump sum for the train; for handling circus or theatrical company trains under contract when specific amounts are charged for transportation between designated stations; for running chartered trains for the Federal or State governments carrying troops, munitions of war, camp outfits, etc. To this account should be charged refunds and overcollections on such business. 11. MISCELLANEOUS TRANSPORTATION REVENUE. To this account should be credited all amounts earned by a carrier from transportation not otherwise provided for. II. REVENUE FROM OPERATIONS OTHER THAN TRANSPORTATION. 12. STATION AND TRAIN PRIVILEGES. This account includes a carrier's revenues from weighing, vending, and other automatic machines located at stations; from advertising at stations and on trains; from news companies or others for the privilege of operating news stands at stations and selling papers, periodicals, fruit, etc., on trains; from telephone companies for the privilege of installing and operating commercial telephones at stations; and from other similar sources. 13. PARCEL-ROOM RECEIPTS. This account includes a carrier's revenues from the operation of parcel rooms, the expenses of which are included in operating expenses. 1 [FIRST ISSUE.] 14. STORAGE-FREIGHT. This account includes a carrier's revenues for storage of freight. To it should be charged authorized refunds. 15. STORAGE-BAGGAGE. This account includes a carrier's revenues for storage of baggage. To it should be charged authorized refunds. [14 This account includes amounts accruing as penalties for delay in loading or unloading cars (demurrage). To it should be charged authorized refunds. 17. TELEGRAPH SERVICE. This account includes a carrier's revenues from commercial telegraph business transacted by it when the expense of transacting such business can not be separated from the expense of conducting the railway telegraph service; amounts received from telegraph companies, whether proportion of earnings or otherwise, for the privilege of transacting a commercial telegraph business in offices along the carrier's lines, when the carrier furnishes some service of its employees whose wages are included in operating expenses. Note. When a telegraph company rents the telegraph line of a carrier and pays all expenses incident to its maintenance and operation, the rent received should be treated as Income. 18. RENTS OF BUILDINGS AND OTHER PROPERTY. This account includes a carrier's revenues from rents of buildings, land, and other property, such as depot and station grounds and buildings, union depots, general and other offices, rooms rented at stations, docks, wharves, ferry landings, elevators, stock yards, fuel yards, repair shops, section and other houses, etc., when such property is used in connection with operations and the expense of maintaining and operating it can not be separated from the expense of that portion used by the carrier. 19. MISCELLANEOUS. This account includes a carrier's revenues from operation not otherwise provided for; also collections from individuals and companies for the privilege of handling freight and passengers over a carrier's wharves and docks; amounts received from others for mooring and anchoring boats at such wharves and docks, and for water furnished them when the water plant is operated by the carrier; receipts from coal and ore docks, stock yards, and grain elevators when not treated as "Outside Operations; amounts received as trackage for detouring trains; collections for the use of a carrier's bridge by pedestrians, street-car lines, vehicles, etc., when the expense of maintaining and operating such property can not be separated from the expense of that portion used by the carrier. Note. When a bridge of one carrier is used by another carrier and such use is paid for either on the basis of a flat rent or a charge per train mile, or a toll per passenger, per ton, or per car, the revenue therefrom should be credited to appropriate accounts. [15 |