Engine-Makers

The railroad equipment industry is living in present poverty but great expectations. During 1923 and 1924 the railroads of the country spent in the neighborhood of $2,000,000,000 for equipment and maintenance, and engine builders prospered exceedingly. This year the roads had about all the equipment they needed, and consequently curtailed their purchases sharply. Both Baldwin and American Locomotive clearly saw this move coming and declared fat dividends for 1925 a year in advance. Both companies now present the unusual spectacle of paying stockholders heavily while current earnings are very poor.

Nevertheless, the locomotive business has always been temperamentally given to either feast or famine. Just now, engine makers are delighted with the prospects. Road after road is expected to come into the market soon again for new equipment. Also, the price-war recently raging among locomotive manufacturers has been stopped.

Sooner or later ,all engines wear out. But the optimism of their leading makers is not based on this fact, but on the great improvements quite recently effected in locomotives themselves. They claim that it would pay railroads to scrap most engines more than six years old, since new locomotives soon save their cost in the more economical requirements of labor and fuel. Even the wealthiest railways will not follow this advice wholesale. Yet on progessive roads, six-year-old locomotives, even in good condition, are steadily being shunted off on branch lines or used only for emergency traffic.