New-York tribune., 1918-04-07
Capitalization q
r. r. Purchase.
May Reduce Cost,
Concentration of Buv;,.
Cannot Be Applied in
Every Case
Especial Correspondence

CHICAGO, April expert op;,,..
is that the country's manufactp,..'
and merchants will not be put ont =
business by the Capitalization ~ -
road purchases. The fact that Nh. N.
Adoo desires a change in the meth,,
of purchasing supplies for the tran.
portation lines does not carry with !,
it is believed, such q radical re.a
justment as will work hardship on A.,
considerable number of manufactures.
jobbers and others engaged in IL.
work of selling to the rail lines.
A committee from all of the regioo,,
districts is now working this out v;fA
the Director General of Railroads: Ms
purchase of supplies for a railroad !,
game which, if worked properls
means more money for dividends and. i
handled inefficiently, can put railroad,
into bankruptcy
About $1,1S0, 100000 worth of rail.
road supplies of all kinds is purchase,
in the United States yearly. Of this
S350,000,000 is bought in New Yoh
City, and $100,0Go,oOo in Chicago. A
railroad of 10000 miles purchases q,
average Of S4,oOO,00O worth of cars and
supplies month. All that can bs
bought locally is bought on the spot
Under the new deal by which the Di.
rector General viii handle the biz
problem, all cars, engines and stes
will be bought from Washington.
In each regional railroad district
New York, Chicago and Atlanta, com.
mittees of regional purchasing agents
haze been formed, and these are to pass
upon all contracts for the purchas,
of supplies to cover a years needs, 0,
where the amount is of large proper.
tions. Under the scheme it is believed
that railroads will be saved hundreds
of thousands of dollars monthly. As
the system now exists, roads in max,
ing small purchases must pay higher
prices than the lines that buy the
same articles in greater quantities.
Through the regional committees the
total needs for all roads in district
may be purchased by these COMMITTEES
and then each road given its portion,
anu AZ SuCu WuO4eSfiIc OuS lLS, liHIueHSH
saving will be possible.
The regional committees will also ba
in position to get the best prices for
big lots. The committees, however,
will not attempt to buy small stuff along
the lines of the roads that must ba
purchased quickly at different stations.
Authorities say that it will be almost
impossible to centralize the purchase
of everything needed by the railroads
To illustrate, one road might be re-
quired TO use a certain kind of head
light based On state laws or local con-.
ditions and these lamps would not do
for another road in another part Of tha
country. This illustration could be
multiplied by the thousand. In addi-
ton to this, all repairs Of railroads and
the machinery Tor doing the same are
built up, organized and operated on the
lines OF the equipment now used by
that particular road. If change were
made, it would involve complete re.
organization of the entire repair de-
partment, shops, machinery and meth
DDS of working.
A centralization of purchasing heads
in Washington would also make it ex-
pensive and, in some ways, impossible
for firms at distances to do business in
this circuitous way with profit.