On 2009-01-16, Tman wrote:

You see, I always thought that the grounded conductor should never be
current-carrying, in the theory that if the ground feed should break,
then the metal chassis of the appliance does not get energized.

The term you want here is "grounding conductor", since "grounded
conductor" is another (better) term for what is commonly called the
neutral.

OK -- am I totally wrong about the code and theory, or is this unsafe?
Seems to me that dryer would get real "hot" should their be a fault in
the neutral conductor to the breaker box.

I know I'm missing something here as this is SOP as far as I am aware.
Someone please inform me?

As others have mentioned, this arrangement was once allowed but is no
longer allowed in new installations. Existing installations are
grandfathered, so if you buy a new electric dryer, you should have a
choice of cords: a 3-wire cord (with a bond on the machine between the
chassis and the neutral) or a 4-wire cord (where the bond on the
machine should be removed).

I'm not sure of the reason for the original rule allowing a 3-wire
circuit, although I have heard that it was a conservation measure
during World War II. If so, it was judged that the copper savings was
more valuable than the increased risk in the event the neutral
conductor was compromised.

Cheers, Wayne