Omaha daily bee., 1910-03-27
PANIC PLUGS MANY LEAKS
Railroad Money Spent for Trifles
Suddenly Cut Out
SUPPLIES THAT CUT INTO PROFITS
How the Purchasing Departments
Keep Busy when Business BOOms
Effect of Retrenchment
on Bookkeeping.

boundleae something TO be sduandered IN
careless extravaganza, supplies are ordered
chiefly on the theory that II is good for
trade. When business was booming, and
prosperity stalked through the land. all the
railroads we're lavish in their purchasing
departments But when the panic OF 1907
came, the railroads felt that this generous
policy could not be a running mate with
solvency. A careful and exhaustive sys-
TEN sprang up among them as result OF
this warning, and now railroad housekeep-
ing Is one Of the highest developed branches
Of the science Of raiiroadins.
over 1000 miles OF lead pencils, $1,000
boxes Of pens, 90 barrels Of ink, 1000 pounds
Of pins-these are what the employees OF
the average 5,OOO-mile railroad use in q
twelve-month. The railroads keep a strict
guard. nowadays. on the consumption of
even these trifling articles. They are econ
omizlnE In everything. especially by stop
ping the numberless tiny leaks in their ex-
penditures that in the aggregate mount up
into millions
The Pennsylvania railroad. for instance,
spent $50 600 In 1907 for rubber bands-just
the ordinary kind that you slip around
folded sheets of paper. In 1905 the Pennsyl
vania employees had all the rubber bands
they needed but the supply cost about S1O,-
W. leeAt largely bethhet NItN WtIo usHu
more carefully.
The greatest businesses in America-the
railroads--are today realizing, more than
ever, that their profits lie to a great extent
in their economies. Anybody can see the
big leaks II is the little ones that the
expenditure committees are now relent-
lessy hunting out
Nearly every large line In the country
now has such committee, generally con-
sistng Of several Of the high executive
officers whose task It is TO see that ex-
penses are kept down to the lowest notch
without impairing efficiency. In the mat
tel ,uppes OF all sorts, their instruc-
ito. the department heads run sub
stantally like this: "You can have what
ever you need bat you must see that it is
used economically"
In no better way could the enormous
possibilities OF waste and consequent loss
on the railroads be better shown than by
telling the amount of material and sup
piles that they buy each year. There are
several roads that consume more than $50.
10000 worth annually.
A Ten-MIlIiOn Cut.
There are at least nine railways that buy
from Sl0OO0OO0 to 10000 900. twenty-nine
roads buy from 100000 to $40 100000 each
$4,000 to SS00O,OO0 worth OF material ano
supplies every tweve-month.
The aggregate spent annually in this way
does not fall far short OF the stupendou,
total of S70o,OoO,OOO. From this it will bt
seen what this great movement toward tn,
economical utilization Of material is likel,
TO mean.
During the last few prosperous year,
when the roads had all and sometimes
more business than they could handle the,
were lavish in their purchases of every
thing, from stationery to steam engines
Business was booming. and the reauisiton
on the storekeeper were often generousl,
large, owing principally to everyone beinJ
too busy to give them careful and judi
clous scrutiny, and to the human failinJ
that goes with a full pocket
Everyone was rushed with work tina
there was not time to fix UP tools or sup
plies when they got the least bit out o
order. Into the scrap-heap they went
Now, every requisition Is having the aci
test applied to 1t by numerous eminent OK
perts before It gets to the expendtur
committee; and after the goods are bough
and issued, they do not get into the scrap
dock until they are absolutely used UP be
yond repair and cannot be utilized 70
any other purpose.
Sure Welcome.
On big slytem the penny wastinRs rl
into thousands of dollars every year, Tn
present movement, inaugurated by the exc
outive heads runs down through every de
partment until even the humblest employ
10 enthusiastically doing his best to help
There is no more welcome caller in tn
office of any head OF department-or eve
In that OF the president himself-than I'll
man who has new and practical idea {
how the road can save money.
One Of the principal tasks OF the e1
penditure committee is the scrutiny {
requisitions for supplies. The lists of r,
QUESTIONS come in from the purchasin
agent showing the number and kind OF eac
article wanted. the price, and the name ,
the firm from whom It will be purchased
The statistics on file as to the auantit
OF each Item in stock and its monthly {
annual consumption in the past are col
suited. as well as the prices hitherto pa
for It, II everything is o. K, it go,
through. The committees every doub
however, has to be cleared away before
is passed.
The necessity of using the utmost ca
and judgment is so strictly impressed ,
everyone from the bottom to the top nov
adsy, however that most OF the parjI
down OF requirements is done before Il
requisition is finally submitted to the cor
mittee.
Microscope for the President,
Another part or their work is the tho
ough and searching scrutiny of all a
counts covering expenditures outside Of 4
purchase OF supplies. These accounts a
carefully analysed before being presents
and comparisons are made. 80 that tn,
true inwardness may be seen al a CLAN,
Not even the presidents expense aecou
escapes the most rigid examination. a
the comnhssary account OF the presiden
private car is no less submitted to I
deadly parallel OF comparison than that
any of his subordinates
Nothing is too small to escape. One
trunk line spent some time making e
heustive experiments with pencil sharpe
OF American pencil,
ers in order to find out which was the b,
nd most economical,
The way these little things are vast
s not so strange when one comes to 10
closely into II. Take rubber bands
instance Some roads used to buy these
pound boxes and issue them in that W
10 the various departments.
When a clerk wanted any, he would gr
han ~