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ERIE - LACKAWANNA MERGER STUDY

Passenger Train Cars

Study VIII-P

The Erie has a total ownership of 589 cars including 185 head end cars, 281 suburban cars and 16 sleeping cars. The Lackawanna has a total ownership of 790 cars including 257 head end cars of which 90 are "BX" box, 281 MU cars of which 141 are power cars, and 21 sleepers. All sleepers are maintained by the Pullman Company.

The major program passenger car repair facility would be located at Keyser Valley and progressive maintenance would be performed at Hoboken for cars of the merged company operating out of that terminal. The shop interval for this equipment would be based on the estimated progressive maintenance which can be expected at Hoboken with the greater volume of cars handled.

All of the Erie passenger car shops at Susquehanna would be retired.

As shown on Schedule A, the savings which would result from the proposed merger are estimated at $321,145.

                        Schedule A

                   Passenger Train Cars

                Summary of Estimated Savings


                                   Shop Vacated        Shop Retained
                                      Erie                 DL&W
                                   Susquehanna        Keyser Valley

A. Not Cash Realized From Merger
   1. Salvage from Property
            Retired                 $ 60,263 G
   2. Non-Recurring Income Tax
            Saving                   260,737 G
  3. Total Net Cash Realized        $321,000 G

B. Expenses
    MW&S
    1. Cost of Normalized
            Maintenance            $ 50,439 G
    2. Depreciation                  51,383 G
    3. Total Maintenance of Way    $101,822 G

    Other
    4. Shop Expense                $166,347 G         $  6,265 L
    5. Supervision                   23,157 G            -----
    6. Total Expenses              $291,326 G         $  6,265 L

C. Payroll Taxes, Vacations, etc.  $ 20,636 G         $    602 L

D. Interest
    5% on Net Cash Realized From   $ 16,050 G               --
       Merger

E. Total
      Net Savings Realized From    $328,012 G         $   6,867 L
        Merger

F. Net Total Savings
      Two Shops                                       $321,145 G