If there were no variations in the types and the cost of locomotives, as built from year to year, it would be comparatively simple to charge the entire cost of renewals as operating expenses; but since there has been, and perhaps always will be, a development in the type of locomotive used, the newer being usually more costly, but in spite of their added cost being really more economical, we find that the cost of the new locomotives is constantly greater. The strictly proper method would be to charge up the excess cost of the new locomotive as an addition to the property of the road.

There is quite a difference in the policies of roads, especially when we compare the roads of this country and of England with respect to the character of work and materials used. In general it may be said that the locomotives in England last many years longer than they do in this country, and that there are now some locomotives still in use which have been in service for forty or fifty years. In America the policy is different. An engine is built with the expectation that in twenty years or perhaps less it will be in the scrap-heap. While it is in service it is worked very hard, and its annual mileage is very much greater than the mileage of an English locomotive. By the time it is thrown into the scrap-heap it has a mileage perhaps greater than an English locomotive with twice its life. The locomotive is then replaced with a newer type which is more economical, while the English locomotive is perhaps considered too valuable to throw away, and is therefore continued in service with less economy than would be obtained from a more modern engine. Of course the relative economy of these two methods may be open to discussion, but it is claimed that the American method of quickly obtaining the maximum of usefulness of a locomotive and then throwing it away produces an actual economy in the cost per ton-mile. The comparison of the two methods is somewhat complicated, owing to other conditions, such as cost of fuel, labor, etc., which would modify the apparent result and render the true result more uncertain. A. M. Wellington stated several years ago that the average mileage life of English and European locomotives was about 450,000 to 500,000 miles, and at the same time gave the life of American locomotives as 700,000 miles. The practice of railroads at the present time is to obtain a far higher railroad mileage, the mileage per year frequently amounting to 50,000, and records of 8000 to 10,000 miles per month for several months are very common with passenger-engines. If we consider that any given locomotive will have a life of twenty years and that its mileage per year will average 50,000 miles, thus making a total of 1,000,000 miles during its life, the railroad could create a fund by an annual payment which at compound interest would produce the total cost of renewing the locomotive at the end of twenty years, or at least of furnishing an amount equal to its present cost. Tables show us that 3 c. per year at compound interest for twenty years will produce $1, or, if we consider the cost of the locomotive as $10,000, $300 per year, compounded at 5%, will produce $10,000 at the end of twenty years. If the locomotive has an annual mileage at 50,000, we should charge $300/50,000 or 0.6 c. per mile as the item to take care of the regular renewals. Of course such items would only apply to the cost of renewing that engine with one of equal cost. The probabilities are that the new engine will actually cost more money. The economics of heavier engines will be discussed later.