CONTENTS 1 2 3 4 5 6 7 8 9 10 11 12 Appendix

1. The World of Railroad Tycoon II
2. The Economy
   Table 2-1. Cargo Demand Table
   Table 2-2. Percentage of Full Price
3. Men Machines and Industries
   Table 3-1. Tycoon Tendencies
   Table 3-2. The Managers
4. The Trains
   Table 4-1. Train Crash Odds
5. Building Your Railroad Empire
   Table 5-1. Station Improvements
   Table 5-2. Revenue Modifier
   Table 5-3. Bridge Types
   Table 5-4: Base Track Costs
   Table 5-5. Target Ratios: Debt-to-Asset
6. The Lay of the Land
7. Stand Alone Scenarios
8. Running With the Big Dogs - strategies
9. Making Your Own Maps
   Table 9-1. City Sizes
10. The Team Behind Railroad Tycoon II
11. The Second Century
12. Railroad Tycoon II: Gold

This chapter is designed to give you a good working knowledge of the basic factors involved in playing Railroad Tycoon II. After reading this chapter, you will have gained a solid working knowledge of all the basic factors involved in building your railroad empire.

Breaking It Down

The world of Railroad Tycoon II revolves around three segments that are all intimately tied together: infrastructure, management, and finance. Infrastructure has to do with all construction details, such as starting a company, laying and upgrading track, building and upgrading stations, and buying trains. This is the beginning point for everything else in the game.

Once you have your infrastructure in place, you have to manage it, using the tools in the game. Management includes setting up train consists (cargo loads), managing traffic, buying industries, monitoring goodwill in other territories, and making the decisions about where and how to expand.

Management doesn’t occur in a vacuum. The primary challenge of Railroad Tycoon II is that you must build an infrastructure and manage it within a financial framework. There are real consequences for mismanagement in the real world, and these are accurately reflected in the game. Finance includes company finances (incurring debt, issuing stock, and maximizing shareholder revenues) as well as personal finances (managing your personal stock portfolio, net worth maximization).

In reality, the distinction between these game segments is rather blurry, since you are tasked with managing the infrastructure of your empire within a financial framework. In the following sections, we’ll explore how these segments are all tied together.

Infrastructure

Think of the infrastructure as the building block of the game. You need to build tracks and stations and buy upgrades and buildings before you can start with the day-to-day operation of your railroad. Most of these transactions can be done with the game paused.

Starting a Company

Your first step is to start a company. Unless you plan to strictly play the stock market, you must start a company in order to play the scenarios. Starting a company is very straightforward—simply double-click on the Start a New Company tab in the Central List Box. The Start New Company dialog box will appear.

When you start a company, you must choose how much money you will personally put into the company, and how much you will accept from outside investors. The more money you put in, the more outside investors will be willing to put in. Usually, you can push both sliders all the way to the right to maximize your starting capital, but some scenarios will limit your options.

You can also select a name and logo for your company—these are both purely cosmetic, and you can change them at any time from the Company Detail Screen.

Laying Your First Track

Once you’ve started a company, it’s time to get down to business. The first thing you need to do is lay some track. Select two cities or towns—preferably two that have a good concentration of passengers or other cargo—then connect them with track by clicking on the Lay Track button (it’s the button that looks like railroad tracks) in the Main Window.

Once you’ve clicked on the Lay Track button, click at one of your destinations, then hold the mouse button down and drag the track to the other destination. Once there, release the mouse button and the track will be laid.

The numbers that float above the track as you lay it serve two important functions. There are two types of numbers—Cost numbers (white), and Grade numbers (green, yellow, or red). Cost numbers are white and appear above the proposed track. The cost will vary based upon the terrain you are trying to lay track over, and the grade of the proposed track. The total cost of the entire length of track will appear below the Central List Box.

Grade numbers come in three shades—green, yellow, and red—and each color appears based upon the grade of the stretch of track:

• Green numbers appear when the proposed track’s grade is optimal. Try to keep all your track in the green as you lay it—trains will move much faster along track that has a low grade.

• Yellow numbers indicate track with marginal grades. Do your best to avoid these areas by taking track around them if at all possible.

• Red numbers indicate prohibitive grades. These are grades that will stop a train in

its tracks—literally. Avoid these grades at all costs—they will kill even the most lucrative routes.

Building Stations

In order to pick up cargo, trains must stop at stations. Now that you have some track laid, you need to put stations at each end of your track.

Select the Build a New Station button, and the Center List Box will change to display three station choices—Small, Medium, and Large. You will also see several choices for the architecture of your stations. Each station type collects resources from the area surrounding them, just as if those areas are bringing resources to the station for shipment. This collection zone varies by station size—small stations collect from a relatively small area, medium stations collect from a somewhat larger one, and large stations collect from the largest surrounding area.

When you’re placing stations, there are a few guidelines to follow:

• Choose the right size for the area—It’s a waste of money to put down a large or medium station when a small one will do. Place your track as close to the resource as you can so you can be conservative with station size.

• Span multiple areas with large stations—A large station can be placed between two resources or cities so that it overlaps both of them. This is also an excellent way to reach areas that would be more costly otherwise (due to bridges, terrain, and so on).

• Multiple stations can collect from the same area—If a parallel set of track is laid, you can put a station very close to another one. In effect, the stations will split the total cargo available, and it will be available on a first-come, first-served basis.

Once you have your stations in place, you can enter the Station Detail Screen and upgrade them with various improvements. For more information, see Chapter 5: Building Your Railroad Empire.

Buying Trains

With two stations in place, you’re ready to buy a train to haul cargo between them. Click on the Purchase a New Train button (it’s the button that looks like a train—pretty obvious, but hey, we had to tell you).

The purchase dialog will appear with a list of all currently available locomotives. Select one, and its details will appear on the right side of the screen. If it appears to be the one you wish to purchase, click Purchase to buy it.

When buying trains, be careful which ones you purchase:

• Tailor each train to its route—If the grade the train will be travelling is steep, be sure to choose a good performer on steep grades. If the grade is flat, then select one that does well in that situation.

• Buy trains with average or better reliability—Breakdowns will occur more frequently for trains with below average numbers in reliability. Buy them at your own risk.

• Expensive doesn’t equal best—Don’t plunk down cash for the most expensive train in all cases; it may not be the best buy for your route or situation. You’ll repeat these steps over and over, but not without some of the ones that follow in the next section.

Management involves taking the infrastructure you’ve built, and using it to turn a profit for your company. This is the most complex portion of the game, since it crosses so many other areas. To keep things simple, you should distinguish between:

• Train/Consists management—Selecting cargo for each train, optimized for the highest profits per run

• Expansion management—Growing your railroad properly and planning

for future growth

• Company management—Taking the necessary steps to build your company, increase return on investment for shareholders, and generally run a profitable, growing business

Train/Consists Management

Once you’ve purchased a train, it’s time to assign its consist, or cargo cars. Railroad Tycoon II enables you to do this every time a train is in a station, and in the early going, you’ll need to be sure you do this every time.

After the purchase dialog disappears, you’ll be taken to the consists management screen. This screen has the map of the scenario on the right side. From this map, select the two end-points of your run. They will appear on the left half of the screen. Double-click on each one in turn, and the right side of the screen will become the Cars List.

You can add any car to the train’s consist for this station, but unless you select from the Cars Supplied by this Station grouping, you won’t be hauling any cargo. At the bottom of the screen, you can see what cargo is available (Supply) and what that particular station demands.

Before picking cars for this consist, double-click the next station and check its Demands list. Now, return to the previous station and select from the available cars only those that are demanded by the second station. Repeat the process with the next station, and you should now have full consists for both stations.

Send the train on its way, and you’ll turn a profit when it reaches the next station. There, it will load the consist you’ve indicated and return to its starting point. This might seem simple, but if this were all there is to it, you’d get bored quickly. Following are a few tips for managing consists:

• Keep trains below three cars initially—In most cases, it’s best to keep trains under three cars to keep their weight reasonable, and allow them to move quickly to their destinations. This is especially true with older trains (pre-1880).

• Don’t send a train out empty—If your first station has no demand for the second station’s cargo, find a third station that does and send the train there next. Too many empty runs will get you in trouble quickly.

• Stations cannot store cargo from other stations—You can’t haul a cargo to one station, drop it off, and then haul it to the next station. You’ll need to take the cargo to a station that demands it first.

The next phase of railroad management is that of expanding your enterprise. Two stations and one train simply won’t cut it—at least not if you expect to go down in history as one of the great tycoons, rather than "that guy who had a train."

Your first concern is where to expand. Look for:

• Large cities—In general, you can’t go wrong if you place a station in a large city (New York, Buenos Aires, or Tokyo). Passenger and mail traffic will be high to and from the city, and it will demand almost all other cargo.

• Look to cover a complete product cycle—The home run in hauling cargo is to haul the initial component (Coal) to a secondary point (Steel Mill), then haul the finished product (Steel) to the next step (Tool and Die Factory), which is ideally located near the first step. One train can make your company a fortune with this kind of route.

• Don’t get ahead of yourself—Maintaining track can get expensive. Don’t lay track unless you are able to use it immediately. Long hauls of track will kill your expansion, unless you have enough short routes to offset the cost.

• Stick to coastlines at first—In most countries, cities are located along the coast, making it easy to haul cargo between them.

• Snatch up short, lucrative routes—It doesn’t matter what the cargo is. If both ends demand the other’s cargo, get them up and running quickly. Passenger routes of medium distance between cities work the same way.

Next, you need to look for other types of expansion. If you are playing on the Expert Industrial mode, you’ll be able to buy industries around the map. When you’re deciding to buy an industry:

• Choose industries with Good or better profitability—Don’t buy industries that aren’t doing well. The only exception is when you find one that you can easily make profitable yourself.

• Buy industries on competitors’ routes—Nothing is sweeter than making money from your competitors’ efforts. If you own a lucrative industry on one of their routes, they are making money for you with every load they haul.

• Combine tactics to score big—Combine the expansion tactic of hauling cargo to a complete industry cycle (Coal - Steel Mill - Steel - Tool and Die Factory) with buying industries. If you own all the industries you are hauling to and from along this vector, you’ll really cash in.

The final type of management expansion is a merger with another company. While a large portion of a merger’s tactics occur in the financial arena, deciding when to merge is strictly a measure of your analysis of a competitor’s position.

The main criterion that decides whether you should attempt a merger is how much of the other company’s stock you own. If you own none of it, don’t try it unless you can pay top dollar. If, however, you own the majority of the company’s shares, you are guaranteed to win, unless you vote against yourself—in which case you should seek professional help.

The financial portion of Railroad Tycoon II is the linchpin that the rest of the game hinges upon. If you do a phenomenal job of building your infrastructure and managing your railroad, you will still lose if you ignore the financial side of the game.

There are two sides to the financial picture and, depending upon the scenario, either or both of them will be important to your victory. The first is corporate finance, which is concerned with the financial picture of your company, and the second is personal finance, which basically tracks your ability to earn personal wealth.

The heart of managing corporate finances is the Company Detail Screen. To get there, double-click on your company from the Center List Box. There are several key areas to this corporate ledger:

• Overview—This tab provides at-a-glance information about your performance, your current manager, and a brief snapshot of your company’s current status.

• Income—This is where you can view your income statement and compare revenues with expenses. In case you’re a novice to financial management, the idea is for revenues to exceed expenses. If you open this page and see a lot of red (read negative) numbers, things aren’t going well.

• Balance—Use the balance sheet to get a feel for your company’s current equity position. The stronger your debt-to-equity ratio, the more likely your share price will rise along with your credit rating.

• Territories—This tab is where you can find out what your neighbors think about you. This is important, since you can’t expand into territories you don’t have rights in. It pays to be nice.

• Finances—This is the page you’ll look up most often. Here, you can issue bonds and stock, buy back stock, manage company dividends, attempt mergers, and—if things get ugly—declare bankruptcy.

There’s so much information in these screens, it can be a bit intimidating at first. Fortunately, you won’t need to learn everything until late in the campaign scenarios. Actually, if you learn the Finances section, you will have picked up most of the skills you need.

Since the Finances tab of the ledger is so crucial, there are a few general tips that will help you as you start playing:

• Issuing Bonds—Never rely on bonds to finance your existing operations. Only incur debt when you can use it to expand to grab a lucrative route. Also, you usually don’t need to worry about paying back your bonds—most of the campaigns end before 30 years, which is the payoff date on most bonds.

• Issuing Stock—Issuing stock drives your share price down. You should only do this when you plan on buying up the shares at the new, lower market price. Be sure to pause the game, then issue stock, and then buy it up. If you don’t pause the game, the computer players will buy your stock before you can. Don’t ever issue stock because you’re desperate for cash.

• Buy Back Stock—Buying back stock from the market will drive your share price up. Unlike issuing stock, you can do this whenever you have the cash to afford to buy it. A high stock price will lead to greater personal wealth, and, if you’re lucky, a stock split.

• Change Dividend—As chairman, you have some control over the dividend the company pays shareholders. As the company’s largest shareholder, a higher dividend will increase your personal net worth. However, the board won’t let you push the dividend too high, since it could leave the company unable to operate as effectively.

• Attempt Merger—When you feel that you have a good chance to take control of another company, either through surplus cash or smart investments, you can attempt a merger. The target company’s shareholders will vote, and if they agree, then the merger is successful. Hint: If you are their majority shareholder, you will always win.

• Declare Bankruptcy—As in the real world, declaring bankruptcy is a devastating thing. You’ll lose half your cash, your credit rating will go in the toilet, and you’ll lose your slip at the yacht club. Still, if you need to cut your debt in half, and you have no other options, it’s here for you. Don’t do this unless you are truly desperate.

Personal Finances

Last, but not least, personal finance rounds out our breakdown of the game’s three major segments. There are only a few things you can do to affect personal finance, but if you do them well, the results will be easy to repeat.

If you take a look at the Player Detail Screen, which is accessed by double-clicking your character’s name in the Central List Box, you’ll see that not much information is contained here. You can view your cash on hand, stocks, and your purchasing power.

The next page lists your current stock holdings. You will rarely come to this page. In fact, most of your personal financial management will take place in the stock market. Click on the share of stock on the desk to enter the Stock Market Detail screen.

There are three actions you can perform in the stock market. For more discussion on these topics, see Chapter 5: Building Your own Railroad Empire.

• Buying Stock—If you have sufficient cash, this is a straightforward transaction. If not, then it’s called buying on margin, which can be risky. Don’t attempt it unless you know what you’re doing.

• Selling Stock—Remember that all stock sales will drive share prices down, so don’t unnecessarily sell your stocks unless you plan to buy more at the lower rate. Selling stock when you don’t own it is called short selling, and is equally as risky as buying on margin.

• View Corporate Info—This allows you to see the corporation’s position. Information on all companies in the game is available and includes largest shareholders as part of the mix. Make sure this is always you in your own company.

Now that we’ve reviewed the basic three segments of the game—Infrastructure, Management, and Finance—it’s time to pull it all together and make your mark on history. If you remember the structure we’ve laid out here, it will help you in your decisions throughout the game.

Remember that you can’t rely on expertise in one area to give you victory. You have to become skilled in all three areas. The minute you abandon one is the minute that a competitor uses that one area to ambush you.

The computer’s artificial intelligence (AI) can be brutal, but it will make mistakes. Don’t underestimate its ability to work the stock market, especially on the Expert Financial Model. Make extensive use of the Pause key to avoid this problem.

The most important thing to remember is to take your time. Don’t rush it—you’ll probably spend many games scratching your head until everything clicks, but once it does, you’ll be hooked.

>Chapter Head<

The Economy- Chapter 2 >Table of Contents<

To really make big profits in Railroad Tycoon II, you’ll need to understand how the economy works, both at an overall, map-wide level, and in the small area within which your railroad operates. Much of your operational and stock market strategy will need to be tuned to fit the economy within which you’re operating. Here’s a look at what’s going on behind the scenes in the economy, and how to use this knowledge to enrich your company and yourself.

At the highest level, the prosperity of the map upon which you’re playing is based on a number of global, map-wide parameters that are beyond your control. The biggest of these are the map setup, the starting year, and the current economic status.

Figure 2-1. A sample map

Obviously, all maps differ from each other in look and feel. Beyond the basic differences of varying coastlines, mountain ranges, and forests, each map has a unique economy, set up by the map’s designer (Figure 2-1). In the map editor, there are a variety of tools that control which industries appear, where they appear, and how dense they are. These are used by the map designer to simulate the real economy of the area depicted. The exact distribution is determined randomly when the map is started, but if you restart the same map several times in a row, you’ll definitely see trends.

For example, on the Eastern U.S. map, cotton appears in the Carolinas, auto factories appear in the upper Midwest (especially around Detroit), and so on. The impact of this is that certain maps lend themselves to certain strategies. For example, the map of China has a number of densely populated cities all located fairly close to each other in the broad central plain. These cities are easily connected, and the fastest way to get a jump in this scenario is to haul passengers and mail between these cities, adding industrial routes with the profits you earn. In South America, by contrast, big cities are fewer in number and more difficult to connect, but there is a broad area in Argentina densely packed with grain and cattle farms. Connect these farms and haul the cattle to a nearby meatpacking plant, and you’ll make a fortune.

Shortly after the invention of the Iron Horse, railroads were the preferred method of transportation for passengers, and for virtually every type of cargo, as well. Railroads tended to be short, but with no other competition for overland routes, they became the dominant forms of transportation. However, new forms of transportation, notably the automobile and the airplane, carved away key cargoes from the railroads. Today, few passengers use railroads in North America, though they remain popular in Europe and other parts of the world. Most high value, priority cargoes—such as food and finished goods—rely on trucks for short hauls (less than 500 miles or so) and only travel via rail for longer hauls. Heavy commodities, such as coal and iron, still rely almost exclusively on rail transport.

In the game, you’ll see a drop-off in passenger traffic in the 20th century, particularly in North America. You’ll also see short hauls become less profitable, and you’ll need to focus on long profitable runs, preferably with a different cargo available to haul back, so you can make money on both legs of the round trip.

Figure 2-2. The Economy constantly changes.

The overall economy within each map swings cyclically up and down, just like the real-world economy (Figure 2-2). The player has no control over this—so many factors are involved that the performance of any one railroad (or even all of them) is negligible. The economy can be in any of these five states:

• Depression

• Recession

• Normal

• Prosperity

• Boom Times

It tends to change up or down a level every 6 to 18 months, often making a full swing from depression to boom times or back in about 5 years. The economy also has momentum, if it has just moved up a grade, it is probably more likely to move up another grade than to move back down.

The game’s economic state affects these individual variables (which in turn can and should affect your strategy):

• Cargo Generation Rate—For every level up (or down) from normal, 8 percent more (or fewer) cargo is generated by each building. In boom times, 16 percent more cargo is being generated.

• Cargo Revenues—Not only is there more cargo in boom times, the cargo is worth more as well. Revenues per load hauled (all else being equal) are 10 percent higher (or lower), per economic level above (or below) normal.

The combination of these two makes revenue swings even more pronounced, since in boom times, you’ll be generating 1.16 times more cargo at 1.2 times more revenue per load, for a total effect of:

1.16 x 1.2 = 1.39 times more revenue than normal

In depression, the formula is:

.84 x .8 = .67 times normal revenue

So your revenue potential is about twice as high in boom times as it is in a depression. Since many of your costs are relatively fixed, you can see the same railroad that made big profits in boom times start losing money at a torrential rate during a depression.

Other variables that can and should affect your strategy include:

• Track laying—Track laying is 10 percent more (or less) expensive for each level above (or below) normal.

• Stock prices—Stock prices are also 10 percent higher (or lower) for each economic level above (or below) normal. This assumes all else is equal. Since, as we’ve seen above, revenue and especially profits swing significantly depending on the economy, the stock price effect is usually a lot more than 10 percent.

• Interest rates—The prime rate runs from 5 percent in boom times to 9 percent in depression. Your credit rating will also affect the actual rate at which you can issue bonds.

In general, when the economy is booming, you should consider these options:

• Add more trains—Look around at your stations and consider adding more trains to haul any excess cargo piling up.

• Refinance bonds—Refinance any bonds you issued at high interest rates.

• Play the stock market cautiously—Don’t get too aggressive in the stock market—you’ve probably made a nice profit with the rising economy, but pushing things now (especially heavy use of margin) could put you in trouble when the economy inevitably drops a bit. If the economy takes a sharp dive, it could bankrupt you.

• Issue stock—Conversely, now is a good time for your company to issue stock—you’ll get a premium price without diluting your stock much.

When the economy is in a depression, you should consider these options:

• Retire old trains—To help ward off losses, this is also a good time to look through your train list and see if any of your older trains are losing money—they might be good candidates for retirement.

• Buy stock—If you can afford it, this is a also good time for you to buy up stock, either on the personal level or the corporate level. Prices should be low.

• Issue Bond—If your company has a decent credit rating, consider issuing a bond and doing a little track expansion. You can refinance the bond when the economy improves—and the track laying itself will be cheaper in a poor economy.

In an ideal world, you’d always have a booming economy. In reality, however, this won’t happen, and it’s best to prepare for bad times.

The economy as a whole is comprised of many individual industries, as depicted by the individual buildings on the map. These buildings represent entire industries native to a particular area. The industries included in the game represent some of the most common industries that relied upon railroads for transportation. Note that most of these industries had other means of transporting their goods, which are not visually depicted on the map. The primary competitor to railways for hauling large bulky goods was shipping—either using big clippers on the ocean or using barges on rivers and canals for shipping inland.

When a new map is started, the game has a target size for each city, and a target density for the areas outside the cities, called regions, which generally contain most of the mines and farms. This is largely pre-determined, as set up by the map’s designer. For example, New York and London will always start out as big cities. However, there is a random factor built in that accounts for about 30 percent of a city’s starting size—New York will always start out big, but sometimes it will start out very big, or perhaps only moderately big. In addition, the actual variety and distribution of industries is randomized, from within a set of available industries. On the Eastern U.S. map, Detroit will almost always have an auto plant, but sometimes it won’t. Detroit has about a 50/50 shot of having a lumber mill. Detroit has no chance at all of having a produce orchard or a cattle yard.

Beyond the starting setup, the growth of a city or region is largely based on how well it is serviced by the rail industry. Chicago grew from a small frontier town to the third largest city in the nation in just a few decades, based largely on its role as the biggest railroad hub in the United States. Western towns that were bypassed by the railroads shriveled and died, while small towns boomed if they were serviced by multiple rail lines.

In Railroad Tycoon II, a city has the potential to grow to roughly 3 times its original size, if it is well served by the rail industry, with plenty of cargo hauled both into and out of the town. It won’t happen instantly, but over the course of 10 to 15 years, you’ll definitely see the growth. A city with no rail service will generally not disappear, but it certainly won’t grow, and it will often shrink by 10 to 30 percent over the course of a decade or two.

Regions experience a bit more moderate growth, but you’ll still notice it. The map’s designer defines regions, and there is no way to directly detect the boundaries of a region within the game itself. However, if you load up any map in the editor, you’ll see icons on the screen representing different regions, with different cargo distributions. Most maps have 10 to 20 regions defined. If you hover the mouse over one of the icons, you’ll see the extent of the region.

Figure 2-3. Supply and Demand Overview

The product of all these industries on the map is a supply of cargoes (Figure 2-3), which will be made available for hauling from any station close enough to the industry in question. Many buildings produce cargo at a relatively fixed rate—an iron mine produces two loads of cargo per year. Some buildings produce cargo at a fixed rate, but that rate can be increased a bit. Farms, orchards, and livestock industries are examples of industries that produce at a set rate, but supplying them with another item can increase their rate of production.

For example, all farms and orchards (cotton, grain, sugar, produce, and coffee) receive a 50 percent production bonus to their base rate of two cargoes per year if supplied with fertilizer. One load of fertilizer is used for every two loads of crops produced, so for optimal production, supply all your farms with about one-and-a-half loads of fertilizer per year. Don’t oversupply a farm if you can avoid it, it’s probably better to use the excess on another farm. Similarly, the livestock-based industries (cattle ranch, sheep farm, and dairy farm) get a 50 percent production bonus if supplied with grain.

Finally, many industries produce only if supplied with raw materials (coal and iron are used by the steel mill to make steel). These industries can be particularly useful. Given one load each of iron and coal, you can generate up to six haulable loads, for three times normal profits, by properly hauling them first to a steel mill (where they are turned into steel) then hauling the two loads of steel to a tool and die factory (to become goods), then hauling the goods to a town for final sale.

Moreover, you’ll generally be paid more for hauling more cargoes further along the processing chain. Hauling a load of iron is only worth a base fee of $28,000. The resulting cargo of steel will generate another $35,000 in hauling fees. The end product, goods, is worth a base fee of $42,000. The total for all three is $105,000, quite a bit more than if you’d just hauled the iron and forgotten about the rest. Of course, the base fee is only a rough guideline to what you’ll actually receive. Still, the biggest profits can only be had by properly servicing most or all of the industries near your tracks.

The basics of demand are quite easy. Different industries demand various cargoes, as shown on the reference card included with the game. Overall demand at a station is the sum of the demand of the individual buildings encompassed within that station’s radius. A special category of a "town" or a "city" is created if a station has more than four or eight houses, respectively within its radius.

Things get more interesting on the expert industrial model, thanks to the introduction of "price levels." Demand ceases to be a black or white situation. At this level, some stations have demand, but at a low price, whereas others will pay a hefty premium for some cargoes.

Table 2-1 shows the relationship between each cargo and the demand for it. The first column, Cargo, is the name of the cargo. Base Price shows the number of days you have to deliver the cargo before it disappears from a station. For instance, if you do not pick up mail within 300 days, it will disappear from the station (the assumption is that your customers got sick of waiting for the train and sent it by other means). Ship Distance Base shows the modifier applied to the base price as distance hauled increases. The higher this number is, the more you will receive for hauling that cargo across longer distances. Next, are three dates; First Year—the first year the cargo appears, Cutoff for Towns—the last date towns will accept the cargo, and Cutoff for Cities—the last date cities will accept the cargo. Demand per House shows the demand for the cargo per house in any given town or city, and the Storage Building column lists the station improvement that affects the cargo.

Table 2-1. Cargo Demand Table

Cargo pricing starts with the base value listed in the chart. It is modified for distance hauled and time to deliver according to the factors mentioned above. If cargo is hauled to a station that doesn’t demand it, only a fractional price will be paid, depending on the industrial model setting for the scenario—the one you chose when starting the scenario. The prices for cargo not in demand are 80 percent, 50 percent, and 30 percent of full price, respectively, depending on whether the player is at the Easy, Medium or Hard industry model. If the cargo is in demand, 100 percent is paid, unless the industry model is Expert, in which case demand levels kick in as shown in Table 2-2. Demand levels are based on the number of houses or industries in the area demanding the cargo, and how much of that cargo they have received recently. If they receive a lot of cargo, demand falls off. The maximum demand level is 9, and the minimum is 0. There’s almost a threefold price swing between the highest and lowest level, so this is an important item.

Price levels range from zero (0) to nine (9). A price level of zero for a particular cargo is still better than no demand at all, it just means that price level is as low as it will go for any station that demands a cargo.

Table 2-2. Percentage of Full Price paid based upon Demand Level

Basically, the price level depends on how badly the cargo is needed at that station. This depends on the number and type of industries demanding the cargo, and how much of that cargo they’ve received recently. If more than one industry at a station demand the cargo, the price level will usually be higher, and will be slower to drop and faster to rebound if a large delivery is made.

There are several other things that can bump up cargo revenues. Many station buildings bump up passenger revenue, as does a dining car. A train that has set a speed record gets a 15 percent bonus on passenger revenue. Various manager bonuses can also increase cargo revenues.

If, for a particular run, your train travels over tracks or to or from a station that doesn’t belong to you, you have to pay the owner a chunk of the revenue. The owner will not contribute to the fuel or train costs, so you have to keep the portion of the revenue you’re paying down or you can lose money on a run.

If you don’t own the origination station, you have to pay a fee of $1,000 per cargo hauled to its owner—a full, six-car train will pay $6,000. If you don’t own the destination station, you also have to pay $1,000 per cargo, plus give up any station bonuses (restaurant, hotel and saloon bonuses to passenger revenue) to the owner.

If you don’t own all the track, then the non-station revenue (total revenue minus the above amounts) is split, according to the percentage of track upon which the route was run. If your train hauls 3 loads of coal 20 squares, of which 16 are yours and 4 belong to the Union Pacific (UP), for a total run of $106,000, then the non-station revenue is $100,000 (excluding the $6,000 in station fees). You get 16/20 or 80 percent of the non-station revenue ($80,000). The UP gets $20,000. If you own both stations, you also get to keep the $6,000 in station fees. Note that the UP does not have to eat a portion of your train’s fuel or maintenance costs.

Figure 2-4. You can buy industry on the expert industrial model.

The ability to buy industries opens a lot of new possibilities, but is only available on the expert industrial model. In general, by buying up the most profitable industries you’re servicing, you’ll be able to significantly increase your profits, and often turn a marginal line into a profitable one, with industrial profits making up for lackluster hauling revenues.

You can buy any industry on the map except housing. Click on an industry to see how profitable it is, and how much it costs. Industry profitability is determined by how many loads are delivered to and picked up from an industry. To count towards profitability, a picked-up load must be delivered to another station that demands it. Profitability is based on a running average of the last few years, so if an industry is ignored for a year, it does not immediately plunge into heavy losses. As you start to service an industry, you’ll often see a profitability increase over several years from merely "good" to the optimal "gushing cash." The actual dollar profit of an industry is based on its purchase price—a steel mill (cost $800,000) rated as "gushing cash" will usually be making about four times as much as a cotton farm (cost $200,000). In general, you want to buy only industries rated "lucrative", "very lucrative", or "gushing cash". An industry rated as "gushing cash" will usually make an annual return of 20 percent or more on its purchase price (about $160,000 for a steel mill).

One downside to buying industries is that it encourages you to oversupply the stations at which you own industries—trading hauling profits for industry profits. As a general rule of thumb, if you can easily distribute your cargo to three or more industries that demand it, do so, keeping price levels high, but probably holding down industry profits below a level where you’d be inclined to buy them. If you’re forced to haul to only the one or two industries that demand your cargoes, do so, suffer the low price level, but be prepared to buy up those industries as their profits rise. If you’re playing against AI opponents, you might want to buy the industries before they become lucrative, to prevent the AI from buying them out from under you.

There are a number of bonuses to be awarded and earned throughout the game. They all vary from hard-set percentages to random event-driven bonuses, including:

• Company managers can add a percentage of added value to certain cargo. For example, Andrew Carnegie produces a big revenue bonus for steel for any company he manages.

• Event-driven bonuses occur throughout the game such as a coal strike raising the price of coal hauls or a city announcing an incentive bonus for connecting to it.

• Dining cars attached to at least one other passenger car increase the value of that haul by 20 percent.

• Record-setting trains, if hauling passengers, increase that haul’s value by 15 percent.

• Current economic states, such as "boom times" will incur bonuses of 20 percent.

• Large restaurants, small restaurants, large hotels, small hotels, and saloons will bring bonuses of 30 percent, 20 percent, 40 percent, 20 percent, and 10 percent, respectively.

>Chapter Head<

Men, Machines, and Industries- Chapter 3 >Table of Contents<

A solid understanding of the economics of the game—and some basic strategies will only get you so far—shows that there are other factors that directly impact your ability to manage your fledgling iron empire. This section covers the tycoons, managers, and industries of Railroad Tycoon II, giving you information and strategies for beating them, using them, and maximizing their strengths respectively.

Of Railroad Barons and Robbers

If you’re like most players, you originally thought that the computer players—the tycoons you face in the game—are pretty much the same. However, if you’ve played through a few of the scenarios, you’ve discovered that their styles are very different, making them challenging opponents. Likewise, you may have noticed the differences in manager bonuses, but you probably haven’t taken complete advantage of them. This section gives you some dirt on each tycoon and manager that you’ll find useful whenever you go head-to-head with them, or whenever you look to hire a particular manager.

The Chairmen

Each chairman has unique tendencies that are, for the most part, based upon their historical actions. For instance, don’t expect Jay Gould—a stockbroker by trade—to back out of your company’s stock for any reason—he’ll hold on like a pit bull through just about every trick you throw at him, while he does his best to undermine you. Likewise, don’t expect Mr. Gould to start his own company—he’d rather mess with yours. When he shows up in the opponent list, it’s going to get nasty in a hurry.

Table 3-1 lists the inclinations of the tycoons when they’re played by the AI. Here’s how to read the seven categories:

• Starts Company—Higher number means they’ll start a company earlier in the face of more competition

• Margin Buying—Higher number is more inclined to use margin, if available

• Short Selling—Higher number is more inclined to short sell stocks, if available

• Investing in Others—Higher number is more inclined to invest in companies other than their own (such as perhaps your company)

• Issue Bonds—Higher number will more readily issue bonds with their company, for expansion and other purposes.

• Expand Rail—Higher number will expand track faster and to more far flung places.

• Industry Investment—Higher number will buy more buildings on the map.

When interpreting the table, 100 is average and 200 is maximum. A tycoon with a below average number in a given column is very unlikely to focus on that strategy while a tycoon with a 200 score in a column will always focus on that strategy. Numbers below 100 are rarely acted upon unless following that tactic yields a very obvious successful outcome.

Table 3-1. Tycoon Tendencies

Since these tendencies can be combined in many ways, and none are absolute guarantees of the AI’s behavior in every situation, it’s best to think of these in general terms, or better, general tycoon types:

• Expansionist (Company Starts/Expand Rail) — Because Railroad Tycoon II does not exclude multiple stations in a service area, an aggressive expansion by the computer will not necessarily exclude you from important regions. This will give the expansionist first dibs on optimal station placement but not exclusive rights to the resources there. This means the player who provides the most comprehensive service (material delivery and pick up) will get the cargo. This leads to natural competition for cargo without using an artificial rate war. The longer you have a train wait for cargo the lower the rate earned due to maintenance costs and lost opportunity.

• Stock Market Wrangler (Investing in Others/Margin Buying/Short Selling) — Since some scenarios rely on personal net worth, an aggressive stock manipulator can be particularly difficult to deal with. It is best not to delay in acquiring at least some of such an opponent’s stock. Later in the game it may be all but impossible to dig them out. Also, the same will hold true for your own stock. Keep as much of your stock in your own hands when playing such an opponent—this goes for human opponents too!

• Centralist (Industry Investments/Issue Bonds) — Because the centralist doesn’t usually "dabble" in the stock market heavily, they usually become well entrenched in their own stock and rapidly buy up industries that they will service with their railroad. They also have the annoying habit of buying profitable industries you are servicing. If an industry you are servicing is gushing cash or very lucrative, and you don’t own it, then this type will likely buy it up in a single heartbeat.

 Okay, there’s one important point here to remember! These managers don’t carry grudges so use them like tools! Really, they like it. If you need to build a lot of track and Robert Stevens shows up at your company door looking for work, hire him, it usually pays. When that phase of your work is done, you can fire him and get someone who is suited to help you with the next phase of your work.

Managers also can figure into winning strategies in the campaign. Results vary, but you can always see where you’re losing money. You should see if a particular manager is available to plug that hole. Lowering your diesel engine purchase costs by 30 percent can go a very long way in the "Dilemma Down Under" scenario. Also artificially lowering your own stock price with a manager is a great way to buy into your own company and make a sudden profit when you fire that manager.

The managers perform tasks that can both improve and hinder your performance; however, unlike in the real world, there are no managers in Railroad Tycoon II that don’t have a single useful function.

Each manager must be paid a monthly salary in exchange for his bonus. No manager will have more than four bonuses; however, not all managers are equally skilled when it comes to money management and purchases. Pick the right manager for the job that needs to be done, and use your manager’s skills to your advantage as you are in control of that manager’s employment. Table 3-2 lists each manager’s salary and explains each bonus.

Table 3-2. The Managers

>Chapter Head<

The Trains- Chapter 4 >Table of Contents<

With 60 locomotives to choose from, you need to pick your engines carefully. It’s best to select a train based on all the requirements for the run you have in mind. While a general approach may apply at times, to get the best results you’ll need to get the right locomotive for the job. This chapter gives you all of the information you’ll need to make an informed choice.

Workhorses of the Iron Highway

Your railroad won’t get very far without careful selection, management, and maintenance of trains. Railroad Tycoon II spans roughly 200 years, and in each time period, you’ll be able to select various trains to get the job done. Before taking a look at some of the more useful engines in the game, let’s take a look at some of the factors that affect trains and their operation in Railroad Tycoon II.

 

 

 

Purchasing Factors

When you decide to purchase a train in Railroad Tycoon II, the Purchase dialog provides crucial information about each train that is currently available. It’s important to choose carefully, especially when money is tight. You’ll have to live with the choices you make, so take the time to analyze your purchase before making it:

• Cost—This is the price of the train you are analyzing. It’s important to know that the most expensive train you can buy is not always the best train to buy. Look at all other factors first, then take a look at cost as the final determining factor.

• Maintenance—This is the cost of keeping the train running during the course of a year. Every train has a maintenance cost associated with it, so the important thing here is to weigh this factor against the pros and cons of other trains available. A train with a high maintenance cost may make sense, given good numbers in its other attributes.

• Fuel—This line gives you the fuel type and cost for each locomotive. As with maintenance, every train has this cost associated with it, so do some comparisons based upon the other factors first. If, however, a train’s fuel cost is out of line, select another train, provided its capabilities are similar. Note that the fuel cost shown is an estimate, and takes distance traveled into account. Faster trains will tend to use more fuel, since they travel further per year.

• Acceleration—This is a measure of how fast a train will get out of the station and up to top speed. This is important for short routes—if a train has poor (or worse) acceleration, it may never reach top speed before reaching its destination, and you should factor that into your top speed calculations. Also, on heavily traveled routes trains will tend to stop more to let other trains by, especially if the route has only single track.

• Reliability—This is usually the most important factor. If a train is less reliable, breakdowns will occur more often. Be conscious of your connections and the terrain, and try not to choose trains with poor or worse reliability ratings. Also, be more wary of poor reliability on a train that will be on your main line. A blockage on a heavily traveled main line is far worse than one on a spur to a few coal mines.

• Top Speed—Examine this chart carefully. By default, it shows a train’s top speed when hauling a certain number of 40-ton cars over variable grades. You can change the tonnage to see correspondingly different numbers in the chart. Pay special attention to this chart if you’re purchasing a train for a hilly route. However, since you run the whole show, you should minimize poor performance on grades by working to build your track as flat as possible.

Stations are not merely places where trains pick up and deliver cargo. They serve an important role in train maintenance and performance. Within a station, you can—better, you must—add upgrades that will make your trains perform better, and keep breakdowns to a minimum. It’s important to note that a train must merely pass through a station with these upgrades—the train doesn’t have to stop there—for them to have effect:

• Roundhouse—The roundhouse performs necessary maintenance on trains. A train’s oil level is the proxy for how recently it has received maintenance. Trains with less oil run a higher breakdown risk. If your train completely runs out of oil, breakdown risk triples, and maintenance costs go way up, too. If you’re continually running low on oil, add roundhouses along your routes to keep oil levels high.

• Water Tower—Crucial for all steam engines, the water tower enables trains to generate steam. Low water levels will mean that a train can’t move as fast—in fact, in many cases they will take years to limp to their destinations without water. There is no adverse effect until the train runs completely out of water.

• Sanding Tower—Sand is added to trains to improve performance over steep grades. Without sand, the train’s wheels can’t generate traction, and the effect of the grade is doubled — so a 2% grade acts like a 4% grade. There is no adverse effect until the train runs completely out of sand.

The longer it is between stations with these upgrades, the more likely it is that trains will have problems. In general, you’ll want a water tower every 30 squares or so along a line. Sanding tower placement depends on how steep the grades are where you’re building. In a hilly area, you may want sanding towers every 10 squares (even going so far as to place a small station along the track for no reason other than to add sand). In flat areas, you can place sanding towers 50 or even 100 squares apart. Finally, the effect of roundhouses lasts the longest — trains can go 100 squares or more between visits. However, due to their high costs, be conservative with roundhouses initially. As traffic increases, you may want more roundhouses than absolutely necessary, to keep oil levels high and breakdown frequency down.

A train’s cargo, or consist, has everything to do with how it will perform. Additional cars add tonnage to a train’s consist, and based upon engine capabilities, can severely impact a train’s ability to perform.

When you purchase a train, pay close attention to the Top Speed chart in the Purchase dialog box. If your route is over a flat grade, then familiarize yourself with the engine’s 0-2 percent numbers. However, don’t make the mistake of thinking that a train with good numbers in this area will do all right when grades hit 4 to 6 percent. There is a marked decrease in performance when trains hit this type of terrain.

Also, note that the number of cars is a huge factor. Don’t overload your trains with multiple cars. They won’t get to their destinations fast enough to help you, and you’ll increase the chances that they’ll breakdown. This is especially true of trains before 1850—be very careful with these older trains and keep them on the light side to avoid problems.

Unfortunately, even the most careful selection of trains, regular maintenance in stations, and careful cargo selection won’t be able to keep your trains from occasionally breaking down or crashing.

When a train breaks down, it will stop for awhile, preventing any train from passing it. Your company’s goodwill will be hurt, and the train in question, as well as those stacked up behind it, will take a lot longer to reach their destination.

The likelihood of any given train breaking down is calculated based upon several factors, but they all begin with a train’s reliability rating. Table 4-1 lists some of the variables that determine the odds of train breakdowns and crashes. The reliability rating is found in each train’s Purchase dialog, and "Cells Traveled Between Breakdowns" is a portion of the calculation used to determine whether or not a train will break down over time.

Beyond these set breakdown rates, there are additional variables in the likelihood of a breakdown or crash:

Table 4-1. Train Crash Odds

• Oil Level—If you’re out of oil, breakdown odds triple. If oil level is one notch above empty, breakdown odds are double. At the half full level, the breakdown odds are 50 percent higher than normal.

• Throttle—Normal throttle setting is just below the red line, or 85 percent of maximum power. At maximum power, the normal breakdown rate is quadrupled.

• Weight Hauled—The first 50 tons hauled are free. Every additional 200 tons hauled doubles the breakdown odds. For heavy freight haulers, pay particular attention to reliability.

• Grade—For every 2 percent grade climbed, weight is roughly quadrupled. For example, a train hauling 120 tons up a 2% grade is effectively hauling about 480 tons—roughly quadrupling normal breakdown odds.

• Engine Age—After 2 years, the odds of breakdown rise steadily. A 10-year-old train is 33 percent more likely to break down. A 20-year-old train is 66 percent more likely to break down.

• Caboose—A caboose reduces breakdown odds by 25 percent.

Crashes are extreme breakdown cases. Once the computer has randomly determined that your trains will breakdown or crash, there is a straight 20 percent chance of it crashing and an 80 percent chance of it having a breakdown.

With all this in mind, a few clear strategies will help you get the most from your trains:

• Use reliable trains for the mountains. The steep grades will greatly increase breakdown percentages, so make sure you’ve chosen a train with the highest reliability possible for these routes.

• Push the throttle on brand new trains, but not older ones. The breakdown percentage is manageable on new trains at full throttle, but add the age factor and you might have as much as a 100 percent chance of a breakdown!

• Replace trains after 10 to 20 years of service. Old trains will break down more often—replace them early to keep things rolling along.

• Never let trains run out of oil. If you’re experiencing an extraordinary amount of breakdowns, place more roundhouses on your route to keep the oil levels near their maximum.

While statistics can tell you generally what an engine is capable of accomplishing, most engines are very particular and only the engineer and mechanics can tell you what it can really do. However, we’ll highlight a few of the best for certain time periods and/or special uses, particularly in Railroad Tycoon II. For more statistics on these trains, see Appendix B.

The John Bull 2-4-0 (1831)

Description: The John Bull was a modification of an English design that was also the first to use a "cow catcher" among its many customizations. It was shipped to the United States in pieces and was assembled by an engineer who had never seen a locomotive before—he added the cow catcher, headlight, and other enhancements. The original John Bull stayed in service till about 1849. It was the first locomotive saved as a national relic in the United States.

Usage: Its top speed on level track and its slightly better reliability make it a generally better passenger mover when passengers pay well. If you use only two cars in your consist you’ll get it’s best performance.

The American 4-4-0 (1848)

Description: The name "American" came from the description of this general configuration as being the American Standard engine type. By 1870, 85 percent of all U.S. locomotives where of this type. Varieties of this type of engine where used well into the 1900’s and are etched into railroading history.

Usage: The American is an inexpensive and versatile locomotive. Its high flat land speed combined with higher reliability will not be match for 20 years when another variant, the Eight Wheeler, becomes available. This is the first locomotive you can work hard without it constantly blowing up in your. The throttle can be used with some caution with this locomotive.

The Consolidation 2-8-0 (1877)

Description: Surprisingly, the Consolidation took some time to gain general acceptance after its early creation in 1866. However, once it did it became a mainstay on many freight lines for years and was used till the end of the steam era.

Usage: Its high reliability, reasonable speed, and good load hauling make it a good freighter. In a pinch, it’s a respectable express locomotive but there are others in this time frame that fit that role better.

The Three-Truck Shay (1882)

Description: The Three-Truck Shay was the first geared locomotive. Designed to haul wood from hilly and generally inaccessible regions, the Shay could scale 14 percent grades. At one time or another, versions were created that burned wood, coal, and oil.

Usage: This is a truly special use locomotive. Its poor flat grade speed makes it useless in anything but difficult terrain; high grades are where this locomotive shines. Also, its good reliability keeps the need for frequent repair stops to a minimum.

The Mogul 2-6-0 (1895)

Description: While the wheel configuration had been around for a number of years it wasn’t officially called the Mogul until 1872. Built until the1930’s, it became a prime example of dependable, all-purpose locomotive power in the late 1800’s.

Usage: Good speed and good pulling power make this an excellent replacement for the Consolidation. Although your operation costs will go up about 25 percent, the improvements will show up in the bottom line.

The Pacific 4-6-2 (1908)

Description: This wheel configuration turned out to be one of the fastest steam designs produced. Often modified later in life for other uses, the Pacific was the standard passenger locomotive for many railways around the world.

Usage: The Pacific was the first of the true high-speed locomotives. Don’t expect this engine to pull much, but if you need to move perishable items or fussy passengers this will do it quickly. Its speed will often compensate for a slightly lower dependability rate. Also, this is not a mountain train, so avoid it in the "Whistle Stops and Promises" campaign if you want the Gold.

The Mikado 2-8-2 (1919)

Description: The first Mikados were built in 1897 for the narrow-gauge railroad in Japan—hence the moniker. The train’s performance earned it a great reputation, and it was produced and distributed widely throughout the world.

Usage: This locomotive has power to spare. Though its top speed is not tremendous, its pulling power gives it great range. It also has the first decent acceleration for a freight engine, and its reliability makes the initial purchase cost seem barely a consideration. The "Which Way to the Coast?" campaign is a prime proving ground for this locomotive’s abilities.

The Class B12 4-6-0 (1923)

Description: A version of this class was named the Flying Scotsman and ran express passenger service from London, England, to Edinburgh, Scotland, till 1963.

Usage: Although its initial cost is a bit steep, this is a very fine locomotive. Its high speed can be maintained at lower grades, and it can still climb steep slopes for very short distances. This locomotive is the last of the golden age steam engines. The competition for top locomotives really heats up from here on.

The GG-1 (1935)

Description: The GG-1 became a pet project for famed U.S. industrial designer Raymond Lowey. Through his inspiration, the GG-1’s entire body was welded instead of riveted. This fact as well as its no-nonsense design gave it a distinct look. The GG-1 proved not only stylish, but extremely versatile. Able to run at high speeds and with very heavy loads, the GG-1 introduced the power of electric locomotives to the United States. The GG-1 was in service till 1983 and was the last survivor of Lowey-inspired locomotives.

Usage: If you can afford the electrical outlay,