24 EIGHTEENTH REPORT. 



ei'ty after allowing for the increase or decrease in debts. It shows 

 tlie sources of re\enue and the amount obtained from each. It 

 classifies all expenses so that it is possible to make comparisons with 

 other firms in the same line between one period and another and be- 

 tween one department and another. These comparisons are made 

 not only for totals but also for detailed items. Thus, railroad ex- 

 penses are subdivided into 122 items, each one of which corresponds 

 to some amount of performance. From these reports the operating 

 offices can tell not only that expenses have increased a certain 

 amount but just where their increases have occurred; perhaps, 

 the increase was due to injuries, floods or to an increase in traffic 

 or to any one of a number of other things. Even though expenses 

 show no increase they may still be too high as shown by the costs 

 of other roads operating in the same territory. From these ac- 

 counts, may be discovered the cost per unit of work done, for in- 

 stance, locomotive repairs per locomotive mile or per car mile or 

 per tractive ton mile. The same is true of other classes of equip- 

 ment and of ties, rails, fences, etc. The expense accounts number 

 122 but this is just the number reported to the Interstate Com- 

 merce Commission. The railroads for their own statistical jjur- 

 poses keep many more. Cities are now waking up to the statistical 

 use of accounts. The city of Denver has the expenses incurred by 

 its police department split up according to the following head- 

 ings, each of which is further subdivided: administration, opera- 

 tion and maintenance of police telegraph system, policing the 

 city, special police protection, regulation of traffic, detection of 

 crime, operation and maintenance of police ambulance and patrol, 

 detention of prisoners — adults, detention of prisoners — ^juvenile, 

 and miscellaneous. The cost of other departments is similarly 

 divided. Costs should not only be classified according to the pur- 

 pose of function of the work done but also according to the kind 

 of work. For instance, the expense of an automobile used by the 

 chief of police would be charged to the police adnunistralion ac- 

 count which is charging on the basis of function but it should also 

 be cliarged to an automobile account so that the city would know 

 how much it is paying for the use of all automobiles. This ac- 

 count should be supported by a detailed record of each machine 

 so that information would be at hand to eliminate inefficiency in 

 their maintenance and to serve as a guide to future purchase. The 

 following is a page of such a record : 



