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The railroad would send orders to the agent at the interchange point to “intercept” in inbound shipment. The SD-35s were billed to Danville but they were intercepted and put into service at Louisville. I always thought the railroads offered “good” rates for moving others’ new locos and cars but $2,700 per unit is about average late 1960s price.
I’ve attached a scan of the EMD shipping notice for one of the SW-1500s. Notice was sent when every loco was picked up by the IHB. IHB-Monon-Southern was a typical route.
On Jan 25, 2021, at 5:01 PM, Bill Schafer <bill4501@...
You’re right that SOU required new equipment from offline sources to be billed to a station deep inside the Southern system so that SOU could participate in the rate. Lawyers, Va., near Lynchburg, was the usual location for company material or equipment being shipped through the Potomac Yard gateway, for instance.
While Southern participated in the revenue of the move, the more important aspect was that the shipment moved on a through rate, which almost always resulted in the connecting road receiving less revenue than it otherwise would have if, say, Southern had billed new locomotives to Louisville on the foreign road and then handled them free as company material on system lines. The foreign road rate for the waybill retired in Louisville would have been higher than the foreign road's rate portion of an interline bill for a shipment billed to Danville.
At least that’s how I remember the system working back in the day.
Kev:Good info!The diesel orders, or background data we have, discuss financing, sometimes repair parts, etc. as part of the purchase logic. I have read references to “renting” equipment back and forth but very few examples of those costs or payments being exchanged. The ICC ledgers show debits and credits to the subsidiary level. I realize when the various companies were actually “merged”, the process was no longer necessary. (Although the lettering may have been required as long as it was under an Equipment Trust.)A lot of strategy and thought went into new locomotive purchases. That fact that a specific unit could be declared as “new” or “replacement” effected its price and down to how much it cost to ship from from EMD or GE, etc. to get to Southern rails. (Enough used/remanufactured parts or a trade-in made for a replacement.)(I think I’ve mentioned before that waybills for locos being delivered were normally billed to places other than actual interchange points (Danville, KY rather than Louisville) so the Southern could participate in the move’s revenue. The gateway and destination were also very important because of sales taxes. Fruit Growers had an advantage selling equipment to Southern because, as both were VA corporations, there was no sales tax on the purchase.)IkePS Kevin Centers is one of SRHA’s Directors and an expert “bean counter” working with assets at NS. He is also active with equipment maintenance and restorations at the Oak Ridge museum.On Jan 25, 2021, at 12:12 PM, Kevin Centers <klcenters@...> wrote:Ike,I know you’re aware of this, but some others may not be. One of the primary reasons for equipment being allocated across the different subs was related to tax benefits. Many times those benefits were related to what we would now consider like kind exchange transactions where whole assets, or components, would be traded in rather than sold for scrap, which allowed the road to avoid some taxation. It should be noted that the roads had to remain consistent across the transactions. In other words AGS for example could only contribute exchangeable components for an AGS order. In the 2010-2012 time frame I received a call from a group of Mechanical Department folks who wondered if it was still necessary to subletter locomotives and cars since this seemed like an easy area to realize some cost savings during painting. I explained that our asset records are identified by subsidiary and that sublettering equipment could come to an end since Accounting didn’t require assets in the field to be identified by sub. As far as I know that led to the end of that practice. Kevin
On Jan 25, 2021, at 11:49 AM, George Eichelberger <geichelberger@...> wrote:
In pre NS days, subsidiary lettering DID reflect ownership. The CNO&TP, etc. had their own equipment trusts, or the cash to buy rolling stock, separate from the Southern proper. Although most equipment was used throughout the SRS, they tried to equalize revenues and expenses.
Here is a snippet from the (eventual) SRHA Southern Railway diesel book that gives an ownership example with SW-7 orders:
Multiple SW-7 orders to EMD in January and February, 1950 were the result of an August 30, 1949 memo to HA DeButts explaining that of the 523 diesels in operation and on order on the Southern Railway System, 439 (84%) were owned by the Southern Railway with the remaining 84 units (16%) owned by “Allied Lines”. That proportion did not provide enough power for the subsidiaries, so they had to rent power from the Southern. Power the Southern needed for its own operations and to complete the conversion from steam to diesel in road and yard services.
Specific recommendations included: twelve yard switchers for the NO&NE to release the same number of Southern units. For the AGS, five road and five yard switchers. The road switchers would be assigned to Chattanooga-Meridian locals, the yard units to the AGS 37th St. yard, releasing five company switchers. Eight units were proposed for the GS&F; four road switchers and four yard engines to release eight Southern road switcher units. The largest number of proposed units were to go to the CNO&TP; six road switchers to be assigned to Chattanooga-Cincinnati locals and fourteen yard switchers to be distributed: four to Citico Yard (releasing four Southern switchers), two to Oakdale Yard, one to Lexington and three to Danville, KY yards with the last four to Cincinnati’s Gest St. Yard.
The recommendation was for a total of fifty road and yard switchers. If accepted, twenty-eight Southern units would be released and the west end of the Birmingham and the St. Louis-Louisville Divisions would be completely dieselized. The other twenty-eight proposed units would completely dieselize yards at Birmingham, Chattanooga (Citico), Oakdale, Danville, KY, Lexington and Cincinnati.
On Jan 25, 2021, at 11:24 AM, Michael Shirey <pcrrhs6561@...> wrote:
Sam, it does help and thanks!
PCRRHS and SRHA Member
On Mon, Jan 25, 2021 at 8:30 AM Sam Smith via groups.io <sam_smith2004@...> wrote:
Yes, you are correct. If a locomotive, or any rolling stock does not have a subsidiary abbreviation displayed somewhere on it, then it belongs to the SOUTHERN proper. On freight cars and cabooses, these letters are usually on the upper right hand side.
Of course, all of this is primarily for financial and tax purposes, otherwise, it's all owned or operated by the Southern Railway Company.
Now, in "modern day" times, through paper mergers within mergers and such, you don't see these "sub-lettering" any more.
Hope this helps a little.
On Sun, Jan 24, 2021 at 8:41 PM, Michael Shirey
Ok guys, I understand the check codes and reporting marks on the side of a locomotive cab. What if a locomotive does now have a reporting mark for ownership. Is it just assumed it belongs to SOU? I ask this because there seems to be a few GP38-2 with no marks. I have Athearn #40609 SOU 5025 GP38-2.
PCRRHS and SRHA Member