With the railroad industry posing so many interesting questions in the organization and regulation of industry, corporate finance, and economic geography it comes as no wonder that William Zebina Ripley taught one of the more popular advanced courses offered by the Harvard economics department early in the 20th century.
Worth noting is that the instructions for course reports transcribed below was only very slightly changed from an earlier version (1903-04).
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Earlier exams etc. for Economics 5
1900-01 (Hugo Richard Meyer alone)
1901-02 (Ripley with Hugo Richard Meyer)
1903-04 (Ripley alone)
1904-05 (Ripley with Stuart Daggett)
1905-06 (Ripley with Stuart Daggett)
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Course Enrollment
1906-07
Economics 5 1hf. Professor [William Zebina] Ripley, assisted by Mr. [Stuart] Daggett and Mr. W. W. [Walter Wallace] McLaren. — Economics of Transportation.
Total 205: 7 Graduates, 59 Seniors, 100 Juniors, 31 Sophomores, 2 Freshmen, 6 Others.
Source: Harvard University. Report of the President of Harvard College, 1906-1907, p. 71.
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HARVARD UNIVERSITY
ECONOMICS 5
ASSIGNMENT OF REPORTS
⇒ Exact references by title, volume, and page must be given in footnotes for all facts cited. This condition is absolutely imperative. Failure to comply with it will vitiate the entire report.
GROUP A
Students will report upon the organization and present condition of one railway company in the United States. This will be indicated by a number, placed against each student’s name on the enrolment slip, which number refers to the railroad similarly numbered on this sheet. See Directions on last page.
The information to be procured is as follows, and should be numbered in correspondence with this list. Note all changes during the year; and compare the results with those for the railway group in which the company lies, as given in U. S. Statistics of Railways. (1) Miles of line. (2) Passengers transported. (3) Tons of freight carried: gross and per mile of line. (4) Tons carried one mile, with revenue per ton mile. (5) Revenue per train mile. (6) Average train load and changes therein. (7) Classification of freight and changes therein. (8) Gross earnings from operation. (9) Operating expenses: gross and per mile of line. (10) Net income from operation. (11) Stock and bonds. (12) Stock and bonds per mile of line. (13) Dividends paid. (14) Surplus. (15) Present prices and movements of prices of the various securities listed.
With this data as a basis prepare as full a general description of the property as possible.
GROUP B
Students will compare the volume of business (1) in gross and (2) by ton and (3) passenger mileage; and the (4) gross income, (5) operating expenses. (6) net income per mile of line, and (7) market prices of securities; for two different railways. These are indicated by numbers posted against the student’s name on the enrolment slip. The aim should be not only to discover differences, but, as far as possible, to explain them. Mere description of conditions is not desired; actual comparison is demanded. The use of parallel columns is suggested. See Directions on last page
With this data as a basis prepare as full a general description of the property as possible.
GROUP C
Students will compare the volume of business (1) in gross and (2) by ton and (3) passenger miles; together with the (4) gross income, (5) operating expenses, (6) net income per mile of line, and (7) prices of securities; for a given railway through a series of years, since 1890, if possible. Note carefully, however, all changes or additions to the line from year to year. The railway assigned is indicated by a number placed against the student’s name on the printed class lists. The analysis of annual reports in financial journals must be carefully followed year by year. Results may be plotted on cross section paper where possible. See Directions on last page.
With this data as a basis prepare as full a general description of the property as possible.
⇒The letters preceding the assignment number against the student’s name refer to the group in which the report is to be made. Thus, for example: “26 A” on the enrolment slip indicates that the student is to report upon the New York Central R.R.; “16 & 37 B,” that a comparison of the Erie and the Wabash Railroads is expected, etc.
RAILWAY COMPANIES IN THE UNITED STATES
- Atchison, Topeka, and Sante Fé.
- Baltimore and Ohio.
- Canada Southern.
- Central of New Jersey.
- Chesapeake and Ohio.
- Chicago and Alton.
- Chicago Great Western.
- Chicago, Indiana, and Louisville.
- Chicago, Milwaukee, and St. Paul.
- Chicago and Northwestern.
- Chicago, Rock Island, and Pacific.
- Cincinnati, Cleveland, Chicago, and St. Louis. (Big Four.)
- Delaware and Hudson.
- Delaware, Lackawanna, and Western.
- Denver and Rio Grande.
- Erie.
- Great Northern.
- Hocking Valley.
- Illinois Central.
- Iowa Central.
- Lake Erie and Western.
- Louisville and Nashville.
- Mexican Central.
- Missouri, Kansas, and Texas.
- Missouri Pacific.
- New York Central.
- New York, Ontario, and Western.
- Norfolk and Western.
- Pennsylvania.
- Philadelphia and Reading.
- St. Louis and San Francisco.
- St. Louis Southwestern.
- Southern Pacific.
- Southern Railway.
- Texas and Pacific.
- Union Pacific.
- Wabash.
- Wheeling and Lake Erie.
- Wisconsin Central.
- Ann Arbor.
- Atlantic Coast Line.
- Boston and Maine.
- Boston and Albany. (See New York Central.)
- Buffalo, Rochester, and Pittsburgh.
- Central Vermont.
- Central Railroad of New Jersey.
- Cincinnati, Hamilton, and Dayton.
- Chicago, St. Paul, Minneapolis, and Omaha. (See Chicago and Northwestern.)
- Chicago and Eastern Illinois.
- Pittsburgh, Evansville, and Terre Haute.
- Lehigh Valley.
- Long Island.
- New York, New Haven, and Hartford.
- New York, Chicago, and St. Louis.
- Lake Shore and Michigan Southern. (See New York Central.)
- Maine Central.
- Pittsburgh, Bessemer, and Lake Erie.
- Western Maryland.
- Rio Grande Western.
- St. Paul and Duluth.
- Northern Pacific. (See Northern Securities Co.)
- Burlington, Cedar Rapids, and Northern.
- St. Joseph and Grand Island.
- Kansas City, Fort Scott, and Memphis.
- International and Great Northern.
- Nashville, Chattanooga, and St. Louis.
- Mobile and Ohio.
- Yazoo and Mississippi Valley. (See Illinois Central.)
- Plant System.
- Georgia Railroad and Banking Company.
- Central of Georgia.
- Pere Marquette.
- Columbus, Sandusky, and Hocking.
- Cleveland, Lorain, and Wheeling.
- Mexican Central.
- Grand Trunk.
- Canadian Pacific.
- Chicago, Burlington, and Quiney. (See Northern Securities Co.)
- Choctaw, Oklahoma, and Gulf.
- Rutland.
- Seaboard Air Line.
- Northern Securities Co.
- The Rock Island Co.
DIRECTIONS
First — Read over the latest annual reports of the company. These are usually republished in Bradstreets; the N.Y. Commercial and Financial Chronicle [Gore Hall]; or the N. Y. Journal of Commerce and Wall Street Journal. [Daily files of last two in 24 University Hall.] Statistical abstracts of these are also in Poor’s Manual of Railroads; the Investors’ Supplement, N. Y. Commercial and Financial Chronicle; or bankers’ Handbooks, Manuals of Statistics, etc.
Second. — Before compiling any returns for ton or passenger mileage, revenue per train mile, etc., read carefully T. L. Greene, Corporation Finance, pp. 79-130 [better buy it, for use in Economics 9b]; Ripley, Transportation (in Vol. XIX, U. S. Industrial Commission Report, 1900), pp. 274-280 and 293-95; [James Shirley] Eaton, Railway Operations, pp. 190-201; or Woodlock, Anatomy of a Railroad Report, pp. 101-111. (Copies in Harvard Hall.)
Third. — Work back carefully through the file of the Investors’ Supplement, N. Y. Commercial and Financial Chronicle. These Supplements, prior to 1902, are bound in with the regular issues of the Chronicle, one number in each volume. Since 1901 they are separately bound for each year. The Investors’ Supplement will be recognized by its gray paper cover, and must be carefully distinguished from the other supplements of the Chronicle. Market prices of securities are given in a distinct Bank and Quotation Supplement, also bound up with the Chronicle. Having found the company in the Investors’ Supplement, follow up all references to articles in the Commercial and Financial Chronicle as given by volume and page. Also use the general index of the latter, separately, for each year since the company was organized.
The files of Bradstreets should also be used, noting carefully that the index in each volume is in three separate divisions, “Editorials” being the most important. The course of prices is summarized at the end of each year in January Bradstreets, and also in the Reports of the U.S. Industrial Commission, Vol. XIII.
The files of Poor’s Manual, the Railway Age, the Railway World, the Wall Street Journal, and other technical papers may of course also be consulted.
Fourth. — Analyze carefully by means of its indexes the returns in the official Statistics of Railways in the United States, published by the Interstate Commerce Commission. Note the statistical division into groups shown on the map at the head of each volume. Note also that for each railway lying in two or more groups, a Summary for the road as a whole is given as a Supplement to each table.
The Annual Statistical Abstract of the United States contains convenient general tables for certain purposes.
Source: Harvard University Archives. Syllabi, course outlines and reading lists in economics, 1895-2003. Box 1, Folder: “Economics 1906-07”.
ECONOMICS 5
Mid-year Examination, 1906-07
- State and explain three leading reasons for the issue of preferred stock by a railroad.
- What peculiarities of the anthracite coal industry have led to overproduction and irregularity of prices, in absence of monopolistic agreements?
- The following statistics are drawn from the 1906 reports of two leading railroads. Complete the tables approximately, and state the main conclusions deducible from the statement of facts :—
| Road A. | Road B | |
| Mileage operated | 2062. | 4423. |
| Tons rev. freight | 20,259,000 | 25,641,000 |
| Passenger mileage | 1,255,625,000 | 511,391,000 |
| Ton mileage | 1,888,605,000 | 6,230,593,000 |
| Average haul one ton (miles) | 93 | 243 |
| Loaded car mileage, one direction | 86,381,000 | 353,282,000 |
| Loaded car mileage, other direction | 59,362,000 | |
| Average tons freight per train | 236 | 410 |
| Gross revenue from freight | $27,247,000 | $34,637,000 |
| Freight train mileage | 7,778,000 | 17,209,000 |
| Earnings from operation | $52,984,000 | $51,636,000 |
| Operating expenses | $35,222,000 | $34,302,000 |
| Freight traffic density | (compute it.) | (compute it.) |
| Revenue per ton mile | (compute it.) | (compute it.) |
| Freight earnings per train mile | (compute it.) | (compute it.) |
| Operating ratio | (compute it.) | (compute it.) |
- What is the method of valuation of franchises in Wisconsin? Criticise it.
- What, in your judgment, are the three most important provisions of the Hepburn Act of 1906?
- What is the Doctrine of Judicial Review? Criticise it.
- Is railroad rate regulation in England more or less strict than in the United States? Describe the situation as regards the rate. making power.
- What are the various economic considerations involved in the making of a freight classification? Illustrate by taking a few typical commodities.
Source: Harvard University Archives. Harvard University, Examination Papers, 1873-1915. Box 8, Bound vol. Examination Papers 1906-07 (HUC 7000.25), pp. 28-29.
Image Source: American Railroad Scene: Lightning Express Trains Leaving the Junction. Currier & Ives (1874). Published in: Viewpoints; a selection from the pictorial collections of the Library of Congress …. Washington : Library of Congress …, 1975, no. 39.