When big steam was put under the gun for wholesale slaughter, what was the economic track used to justify retirement? Were locomotive depreciated each year, similar to construction equipment? Was it mandatory locomotives be fully paid off to lenders? In cases such as the Pennsy Q2's and T1's or NYC Niagaras, was a straight loss taken and balanced against the savings of closing support facilities and potential MU operation?

I've often wondered if Dieselization simply created deeper debt for companies with proven steam services, debtless locomotives, and machine-like maintenance plans.
It seems like a terrible waste to view acres of CB&Q Northerns, and NKP Berks, just to name a few, shopped a ready to run.

Some of the newest steam locomotives built in the 40's had trusts on them. They couldn't be scrapped until their trusts were up, maybe ten/twenty years. I have seen pictures of long lines of steamers waiting for their trust to run out. Diesels cost about twice what a steam locomotive cost. I assume that most steamers were paid for out of profits. GM would offer financing on their diesels. Whether it was true or not, I read that carrying charges on new diesels could be $100 a day. Baldwin came up with an economic formula that found that it was least expensive to own a steam locomotive for 15 years, called economic life. Owning an engine for less than or more than 15 years was more costly on an annual basis. The rate of dieselization in most cases depended on how large a railroad was. A big facture in EMD's success, in my opinion, was that at the end of WWII, over 90-95% of the steam locomotives were over 15 years old. Simply, because so few engines were built during the Depression and new locomotive construction was severely restricted during the war. And they were worn out and needed to be replaced or seriously rebuilt. C&NW and the T&P started to rebuild some of their Northerns and Texas types, respectively, but decided to spend the money on new diesels instead.

At about 30 pages, it's way to long to post, but here are links to a 1952 report that I found in the Alaska Railroad Archives on the costs of steam locomotives to be used to decide whether to dieselize. The chickens were apparently in the hen house as it looks like the questionnaires were prepared by the Product Application Section, Electro-Motive Division, General Motors Corporation.

In 1952 most of the Alaska Railroad steam fleet was relatively new, with most locomotives having been built in the 1942 to 1944 time frame, most for the War Department. At the time of the report they operated 34 steam and 50 diesel locomotives.

http://www.alaskarails.org/historical/d ... team-1.pdf
http://www.alaskarails.org/historical/d ... team-2.pdf

This is from George Elwood's wonderful website.

http://www.rr-fallenflags.org/prr/prr-alco.html

A late-1952 proposal by Alco-GE to dieselize PRR's Central Region. It suggests purchase of 304 engines, nearly all of them (what were later called) RS-3's. If their numbers are correct, the cost savings were significant.

PRR did purchase a handful of RS-3s during 1953-55, but nowhere near this number.

JR

Remarkably, the Pittsburgh and Conemaugh Divisions were among the last to use steam.

Phil Mulligan

Plenty of coal handy and existing infrastructure.

In the mid 50s, Nacionales de Mexico did a cost comparison between steam and continued investment in diesels. Their idea was to buy up all the Van Sweringen Berkshires and spares they could get, and convert them to oil firing for long term use on the Queretaro Division. The diesels won out because the Berks would have required expensive improvements to track and bridges, but diesels didn't. Too bad, I bet the Berks would have performed splendidly burning oil.

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I recall an article by Ed King in Trains magazine thirty or more years ago that claimed that the final straw for N&W in retiring their remaining steam in the late fifties was that they needed the money from scrap to buy the Virginian Railway. Whether that makes economic sense or not.

I have heard that the the three DMIR Yellowstones that survived did so because of trusts on them, but they could be used as displays without violating the terms of the trust.

Apparently disposal of steam power was not a cut and dried decision. I would tend to believe that the NKP and CB&Q shopping of big power right up until the end was a hedge against Diesel failures and inability to take deliveries. Steam wasn't outmoded, it was reliable but required too much collateral support. Such was the case with the NYC Niagaras.

There is a story - and I only know it as a story - that N&W was happy with their modern steam power and would have continued to run it indefinitely, but Stuart Saunders wanted to show a huge upswing in cost savings by Dieselizing.

If the steam fleet was of modest age, they might have held onto steam longer, but most steam was of 1930 or earlier vintage and ready for replacement.

I understand that even by the early to mid 1950s, it was becoming increasingly difficult to source appliances and parts for the more niche items on locomotives- air compressors, pumps, lubricators, ect. as those manufacturers had either stopped making those items or gone out of business as diselisation went into full swing and demand plummeted. This complicated things particularly for the late era steam railroads like the N&W, and may have even had some influence on their pssoble intent (to some degree at one point) of running steam as late as 1970.

Can anyone with more substantial knowledge on this advise to the truthfulness of it?

A friend in the Passenger Dept. had told me he had seen a PRR study and which showed steam (K4s) was cheaper to run than diesel (Baldwin BP20) on the NY&LB trains. That is, until the steam engine needed an overhaul.

This sounds preposterous until you realize the NY&LB and PRSL actually DID use passenger steam until November 1957, about the end of steam everywhere on PRR.

Phil Mulligan

It's really simple: for an over-regulated industry that could never quite raise rates as fast as needed, and faced with rising costs for labor, increasing competition from trucks, cars, and aircraft, the diesel was a financial home-run.

If WW2 had not intervened, dieselization would have occurred 5-8 years sooner for 85% of American railroads. EMD 103 sealed the deal, and most railroads couldn't buy diesels fast enough after 1945.

It's not a matter of comparing one AMC 2-8-4 against equivalent GP9 horsepower, those GP9s didn't need all the expensive extra stuff that steam needed. They had more utilization and operational flexibility. The economics were very clear: diesels paid for themselves very quickly. That's why it made no sense to keep a few dozen modern steam locomotives on a roster otherwise filled with 25-30-40 year old clunkers (Lehigh Valley, for example?).

The efficiencies of modern steam power really didn't matter, because steam still needed backshops and water service departments and extra crews for helper districts and big engines couldn't run on branchlines and lots of company coal moved..... Railroading is a business, and before deregulation, it was a business that at best, averaged a 2-3% return on investment. Diesel motive power could provide a 15-25% or better return on investment, and it wasn't difficult to borrow money on that basis.

The diesel "won" because it was a better business decision, and allowed a given railroad to drastically cut costs.

I love steam locomotives, but I'd hate to run a commercial railroad with only steam power.

Howard P.

Some railroads were so large that the Diesel companies couldn't build enough locomotives fast enough for them, even if all of the manufacturers supplied a variety of incompatible models. There was a steel mill strike late summer of 1957. There was probably some increase in business earlier that year due to purchases to protect inventory while the anticipated strike happened. After it was over, steel shipments didn't immediately rebound until that "protection" inventory was used up. This fluctuation in rail traffic also included coal, coke, iron ore, and limestone, key ingredients in steel making.
The rail traffic reduction in late 1957 allowed locomotive replacement to catch up with demand. Earlier, the abnormal temporary increase in traffic caused some of the larger roads to rent whatever they could get, including steam locomotives, from other roads that had already realized the gains in availability provided by Diesels. I'm using the Pennsylvania RR as an example. They rented steam from the Reading and Santa Fe, and Diesels from the Bangor & Aroostock. about that same time, the Richmond, Fredericksburg & Potomac had extra steam to rent to the Chesapeake & Ohio.