CHAPTER I

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OUR RAILROADS TO-MORROW

OUR RAILROADS TO-MORROW

BY EDWARD HUNGERFORD

NEW YORK

THE CENTURY CO.

1922

COPYRIGHT, 1922, BY

THE CENTURY CO.

COPYRIGHT, 1920, 1921, 1922, BY

CURTIS PUBLISHING CO.

PRINTED IN U. S. A.

CONTENTS

CHAPTER PAGE

I IN INTRODUCTION 3

II THE UNITED STATES RAILROAD ADMINISTRATION 25

III THE UNITED STATES RAILROAD ADMINISTRATION (continued) 47

IV THE RETURN OF PRIVATE OPERATION 65

V THE PRESENT-DAY SITUATION 79

VI THE MAN FACTOR OF THE PROBLEM 91

VII SOLVING THE RAILROADS' HUMAN PROBLEM 115

VIII THE POSSIBILITIES OF ELECTRIFICATION 135

IX MORE ABOUT ELECTRIC MOTIVE-POWER 159

X A CASE FOR THE STEAM LOCOMOTIVE 172

XI THE GASOLINE-MOTOR UNIT AND ITS POSSIBILITIES 191

XII SPEEDING UP THE FREIGHT TERMINALS 213

XIII THE TWILIGHT OF COMPETITION 238

XIV THE REGIONAL RAILROAD OVERSEAS 272

XV THE REGIONAL RAILROAD AT HOME 293

XVI THE UNITED STATES RAILROAD 317

OUR RAILROADS TO-MORROW

CHAPTER I

IN INTRODUCTION

Do you chance to recall the story of Frankenstein, of the man-made

monster, who, having been created, arose to slay the man who had created

him? The railroad to-day is in much the position of the man who created

the Frankenstein. Having in no small sense created the modern world,

having riveted its very sinews of commerce together, it now stands in

apparent danger of collapse. The world over, it is at least in peril of

bankruptcy. Everywhere it is in trouble. One of the greatest if not indeed

the greatest of factors in our social and commercial structure to-day is

flying the signals of distress. Its perplexities are upon all tongues.

Their solution seemingly has become the problem of all men. The railroad

is almost the single great unsolved economic problem of the entire world

to-day.

The sweep of a great war, the debris of men and of human understanding

that followed in its wake, the new and independent position of labor

everywhere, the vast increases in fuel and in raw material costs--all have

contributed to the serious embarrassment of our railroads. But never to

their breakdown. Please remember this. It is a common phrase these days to

allude to "the breakdown of the railroads." But it is an incorrect phrase,

decidedly incorrect.

Even in Russia, where transport conditions to-day are the worst anywhere

in the world, there has not been a complete railroad breakdown. The

Russian railroads after nearly a decade of overburden are to-day

functioning--after a miserable fashion, to be sure, but functioning none

the less.

For, truth to tell, a necessary railroad structure may never break down

completely. It may descend into the valley of deep woes, it may crawl on

its stomach in the despair of seemingly hopeless disease, but it may never

quite die. That is out of the possibilities of the thing. Dying, a

railroad dying? It must never die. A factory, a merchandising

establishment, even a whole town may struggle along fitfully for a number

of years and then decide to quit, leaving but a forlorn group of ruins as

a memento of vanished enterprise. But a necessary railroad may never quit.

When a rail highway of any real importance ceases to operate, civilization

itself, begins to crumble. For a railroad is a not alone life but also a

life-giver. Upon it depends virtually all the life of the community it

serves, not merely commercial life but political and social as well. Which

means that the mere suggestion that the railroad structure should cease to

function is unthinkable. And here thrusts to the front the vexing problem

of how not only to enable it merely to live but to enable it to live in

the fullest strength, to grow apace withal, to more than keep pace with

the growth of the community that it is designed to serve.

* * * * *

For nearly a hundred years now we have been upbuilding the railroad

structure of the world. America pioneered in its creation. Our fathers and

our fathers' fathers cannot now remember the day when the call of the iron

horse was not heard across the land. The railroad train has become part

and parcel of our lives. And even though in these days with our motor cars

at the curb we may have come to scorn the railroad train for our own short

travels, we know full well that it brings the milk to our doorstep, the

coal to our bins, the provender to our larders. It helps weave the fabric

upon our backs, build the shoes upon our feet, form the hats upon our

heads. At every corner, every turn, we are dependent upon the railroad.

Therefore there is not a man or a woman in the entire United States to

whom its present plight should not be of the keenest interest and

importance.

* * * * *

We were promised a complete solution of our transport troubles with the

hurried passage two years ago of the Esch-Cummins Bill, now known

officially as the Transportation Act. Have we reached that solution, or

anything like unto a solution?

You do not have to ask the average man twice for an answer to that

question. He knows. If he is a business man he knows doubly well. He knows

that for the last ten years our American railroad system has been in

something of a decline. A decade ago it was at the zenith of its

efficiency. For eighty years it had been climbing upward; for the last ten

it has been slipping backward. Oh, yes, I do know its war record. It _was_

a fine record and one of which every American should be duly proud. There

is hardly a physician, however, who has not seen a patient, terribly sick,

under the stress of great emergency rise magnificently to a definite

situation of supreme importance. So four years ago rose our sick man of

American business. And now he has gone to bed more ill than ever before

while many doctors quarrel about his case.

And still he functions. The sick-abed man of our American business still

renders the all-necessary service that none but him really can render.

Fortunately perhaps American business itself at this moment is not in the

very best of health. One shudders to think what would happen if industry

all the way across the land were again in its top notches of production.

It is not the least of the perplexing phases of this all-perplexing

railroad problem of ours--the question, when traffic shall again rise (as

it certainly will) to normal volume, to say nothing of any abnormal

volume, of how our weakened railroad structure will meet it.

That it recently withstood severe tests is of course no indication that it

could again withstand such strains. All the way across the land our

railroad functioned in the recent ordeals through which it has

passed--which of course is not saying that it could do this again. It

quite naturally worked at its best in the western sections of the land,

where there are both less congestion and comparatively larger rail

transport facilities. Yet as one came east he found the American railroad

still meeting its responsibilities bravely and with a real degree of

efficiency. One crossed the Missouri, the Mississippi, the Maumee, and

still found the railroad functioning--the stout, pliable rod of its energy

bending but never breaking. He came further east still, crossed the

Susquehanna and then the Delaware, and still the rail carrier functioned.

He came to the Hudson and found the battered and overburdened railroad

machine still meeting its obligations, after a fashion at least.

Our railroad machine did not break even in New England, where conditions

are and for a long time past have been almost at their worst; where for

nearly two decades a high-grade community has been forced to pay penalty,

and pay generously, for a grave accumulation of railroad errors. It was in

New England that American railroading really began, with the construction

in 1808 of a crude wooden railed line at Quincy, Massachusetts, whose

horse-drawn cars brought granite from the quarries down to the water's

edge, whence it might go by sloop to Charlestown, where the tall shaft of

the Bunker Hill monument was beginning to arise. It was in New England too

that the first real railroad enterprise and development were shown; by the

middle of the forties a group of energetic and profitable small companies

rapidly expanded and offered genuine transport to six of the busiest and

most rapidly growing States of the Union.

It is in that same New England that when one comes to-day he finds the

picture of our national railroad machine almost at its very darkest--the

stations dirty, unpainted, neglected; the passenger-cars and the

locomotives in similar or even worse condition; the morale of the rank and

file of railroad labor low in many different ways. Remember that it is not

like this everywhere else within the land. It is particularly different

out in the West. Take California; out there the stations almost invariably

are clean and brightly painted, the broad lawns that surround them are in

the pink of perfection, while the trains that enter and leave the stations

are in full keeping with them. Engines, and the passenger-cars behind, are

alike clean, fresh-painted, efficient in every detail of their appearance.

Paint certainly does wonders. The cherry-red electric trains of the

Southern Pacific never seemed brighter or more immaculate. I rode a little

more than a year ago on a huge steam locomotive of the El Paso and

Southwestern railroad. The brightness of her appearance, the efficiency of

her performance, seemed to belie the fact that it was eleven years since

she had left the big shop in Philadelphia where she had been born.

Always it is as one comes further east that the American railroad machine

grows more and more shabby, until in New England we see it at its worst.

Our entire railroad structure, speaking nationally and subject only to a

few exceptions, is worn down a bit. It is a shoe outgrown. It pinches. It

pinches hard. Yet nowhere does it pinch harder than in New England. I

hinted but a moment ago of the transportation machine there, twisted and

bended and torn and all but completely broken. I spoke of the desolate

appearance of many of the trains and of the stations. The Boston and

Albany, it is true, has been something of an exception to this rule. The

present condition of the Springfield station does not prove the exception

however. Always a wealthy road, the B. & A. is compelled by its State

charter to return to the Commonwealth of Massachusetts all of its earnings

in excess of an annual 8 per cent. It is hardly necessary to add that

even in its most prosperous years the excess earnings went into the

property. And in consequence the patrons of the road benefited. But that

was yesterday.

It was yesterday too that Boston possessed a suburban service in which she

could at least display some slight evidences of satisfaction. That

yesterday is now quite gone. To-day the service is unquestionably the very

worst in all this land. It is doubtful if any other large American city

would tolerate for a month the sort of suburban service which to-day is

doled out to the Boston metropolitan district. Ancient and dilapidated

cars, pulled by equally ancient and dilapidated locomotives, are the sad

lot of the Boston commuter. The records of the railroad companies

themselves show that some of these ancient coaches date from as far back

as the early eighties; many of them go back into the nineties. Nightly the

trains are crowded, not only to the extent of their seating capacities,

but well beyond them. Nightly the abominable overcrowdings of the New York

subways are repeated throughout the Boston suburban zone, and with far

less excuse.

In its appropriate time I shall discuss the large possibilities of

electrification as it applies in particular to the Boston suburban zone.

For the moment consider this New England corner as the darkest corner of a

transportation picture which to-day has but few patches of brilliancy. As

one goes from east to west however the picture brightens perceptibly. Do

not forget that it is at its very worst in New England and perhaps at its

best in California.

* * * * *

For the moment the freight service, nationally speaking at least, is not

subject to the same criticisms as the passenger. (To the depleted

passenger service we shall come in good time.) This for the simple reason

that the traffic is not being produced across the land. A sadly depleted

transportation structure easily can take good care of a sadly lessened

freight traffic. But let our wheels of industry begin really to hum again

and contemplating the present condition of our carriers, I shall fear a

reversion to the conditions of the winter months of the early part of

1920, when one box-car took forty days to go from Boston to Chicago, a

trip that easily should have been made in a fortnight, while another car

but a few days later took fifty days for the same journey!

Yet, to be entirely fair, these runs were made in a winter which, by the

official records of the weather bureau, was the worst that the country had

known in thirty-six years.

All right. Let us be fair. We shall go back three years to 1917 before

government control and the really big labor problems had been wished upon

the railroads. The New England roads even then were already having a

fearful time of it. The Boston Chamber of Commerce sent out questionnaires

to the big shippers of the district asking for specific reports on _all_

of the car-load shipments that they were making. When the questionnaires

came back to it, all filled in neatly on the dotted lines and in the blank

spaces, they showed the definite record of 2625 cars, quite enough to be

fully representative of the entire situation. One New England land shipper

reported that the fifty-nine cars which he had had in Chicago movement had

ranged from thirteen to eighty-seven days in transit. (Remember, if you

will, that a fair average for that journey is fourteen days.) One hundred

and sixty cars bound to his siding from various Western points had

together consumed 6709 days in transit. A reasonable time for their

journeys would have totaled 2550 days. Detentions due solely to railroad

delays had in his one case come to the considerable figure of 4159 days.

For the entire 2625 cars--in almost every case from the primary

grain-markets of the West--the total transit time came to 109,569

car-days. Again the law of fair average time comes into play. Let me

explain briefly how it is made. To the shortest time in transit between

two given points an arbitrary of 50 per cent. is added. This makes the

fair average. In practice it results that the average time to Boston from

points east of a line drawn through Buffalo and Pittsburg is fixed at

seven days. Two weeks are allowed from points west of that line and east

of the Mississippi, three weeks from those east of the Missouri and thirty

days from places as far distant as Montana. With this rule as a measure

and taking the individual routings of each of these 2625 box-cars, the

fair average time of all of them came to a total of 40,753 car-days.

Subtracting this time from the total transit time as you have just had it,

we get in a few months at the beginning of 1917 a railroad detention of

68,996 car-days, or an average waste of 26.2 days for each car. If this

waste could have been avoided there would have been an additional use of

9856 cars for one week each, or 3285 cars for a three weeks' period. The

hard-headed railroad executives who continue to argue against a too

elaborate car-building program must understand these figures and their

full import. Nor can their brethren in the field be entirely blind to the

success of the Car Service Commission of the American Railway Association

in making an extensive and vastly bettered use of the freight equipment

immediately at hand at that time and available all the way across the

country. It takes a lot of time and money to build any considerable

quantity of new freight-cars. It does not take much of either to make a

better use of the cars already in operation. And this is the very thing

that had been done to a certain extent, up to the beginning of the present

business slump.

It would not be just or fair to assert or even to imply that all of the

car delays which we have just seen occurred within the boundaries of New

England. It is just as fair to assume that many of them came to pass in

Montreal, or in Toronto, or West Albany, or East Buffalo, or Altoona, or

Brunswick, as in West Springfield, or Cedar Hill, or Mechanicville. But

when this point has been stated the fact still remains that the New

England roads to-day are and have been for a number of years past fairly

typical--certainly not exceptional--of the condition that prevails in

certain other sections of the land, particularly upon the so-called

"weaker lines." The great trouble is that in New England there are

virtually no strong roads. They are all down in the doldrums. Even the

last series of rate advances by the Interstate Commerce Commission, which

gradually are proving very profitable to many of the already strong

railroads in the southwestern corner of the United States, have failed to

bring relief to the already weakened properties in its northeastern

corner.

In the course of this book I shall refer more than once to the deplorable

New England situation. I have referred just now to the fearful delays to

freight originating there in the last fairly normal period of private

operation, giving full heed to the fact that many if not most of these

delays occurred outside of the actual New England territory, in order to

emphasize the absolute unpreparedness to-day of our national railroad

structure should great freight traffic demands be made upon it once again.

In a merely introductory chapter I cannot expatiate at length upon the

reasons that have led to this bad condition nor attempt to give the

methods by which it may possibly be corrected. I merely am trying to paint

in brief a picture that has all too few high lights. In the course of this

book I shall attempt gradually to fill in some of the details.

All these things, and many others too, are upon the face of our present

railroad situation in this country. When one goes beneath the surface

matters are even worse. If one is a security-holder in rails he does not

have to study Wall Street reports to see the saddening decline in dividend

payments--either average or cumulative. It is he who long ago began to

smell the rat. And the news that in the railroad the employer and the

employee have been slipping further and further apart until a seemingly

unbridgeable gulf has come to exist between them, that the executive

personnel of our railroads of to-day is growing on in years with little

or none to replace it, that no steps whatsoever are being taken to bring

our railroad structure up to the necessities of to-day--to say nothing of

to-morrow--is not news to him.

Perhaps the most pathetic of all these declines is that of the fine

tradition of American railroading--the thing which in war days we learned

to call morale. It was that tradition that used to make the farmer's boy,

as he stood in the field and watched the express sweep by, yearn to become

a railroad president. In a less romantic and far more concrete form it

enabled the old-time railroaders to fight against fearful conditions at

times--against the blizzards of midwinter in the north, the blazing

midsummer of southern deserts, flood, pestilence--come what might, that

old-time railroader was ready for it.

It was the survival of that tradition, the fine fiber of its long-created

morale, that enabled our railroads to make such a fine war-time

performance. And it is its lessening, the gradual passing of the old-time

railroader with none of his caliber to replace him, that is one of the

tragedies of our railroad situation of to-day.

To Americans these things still will come as more or less of a surprise.

They may have felt themselves fairly remote from actual railroad

responsibility. They may have been depositors in the saving-banks downtown

or holders of policies in the insurance companies, and yet have quite

forgotten the millions of dollars of railroad securities in the

strong-boxes of these great fiscal institutions. The financial

ramifications of the railroad as well as its social and commercial ones

are far-reaching indeed.

Once again, it is because of this intertwining of the railroad with the

every-day life of the American community in its every phase and relation

that the growing seriousness of its present predicament becomes a matter

of so large national import. Our transport problem is no academic matter.

It is very real, very human, very close to every one of us. I did not

overstate when I said that the railroad to-day was life itself to us. And

because it is life, our life if you please, its present serious problem is

very much our business.

If we should go back and begin at the beginning we should find our

American railroads in their beginnings small individual units, in many

cases personal properties, like a store or a bank or a factory, and seldom

correlated. Even the gages of our pioneer roads did not always agree, and

in at least one case purposely so. The early builders of the Erie felt

that by laying down a six-foot gage for their enterprise they would

succeed in keeping their freight-cars and other equipment on their own

property and under their own eyes. In this purpose they succeeded

admirably. They also succeeded in keeping the freight-cars of other

railroads, bringing valuable interchange merchandise, off their rails,

with the eventual result that that railroad, twenty years after it was

first laid down, was forced at great trouble and expense to bring its

track to the standard width.

There was much that was crude and experimental about those early roads--a

condition that was of course bound to exist. The traveler who went abroad

upon them quickly became aware of all this. In the beginning he would

change cars four or five times between Albany and Buffalo; and when

fifteen or sixteen years later the railroad had extended itself all the

way out to Chicago there were three or four more changes to be made.

To-day a solid train from New York or Boston to Chicago or St. Louis is so

much a part of our regular order of things as to cause no comment

whatever. Yet even to-day one cannot ride across the North American

continent from the Atlantic Ocean to the Pacific without a change of

cars--that is, not in the United States. In Canada he can do it quickly,

easily, comfortably. Of which much more in good time.

The lack of convenience in the handling of freight was equal to if not

greater than that in the handling of passengers. Of through routes there

were none. Freight bound from five hundred to a thousand miles or more was

repeatedly transferred and retransferred. The fact that until the late

seventies two such important links of the important New York-Chicago

routes as the former Lake Shore and the New York Central and Hudson River

railroads had gages varying a little more than an inch, and so

necessitating an elaborate mechanism at Buffalo for the transfer of the

trucks beneath the freight-car bodies, shows the fearful lack of rail

correlation everywhere across the land. Indeed it was hardly a decade

before, that a state of near civil war had been precipitated at Erie,

Pennsylvania, by the efforts of the Lake Shore railroad to standardize its

gage through that town. The townsfolk, urged and led forward by local

hotel-keepers and bus-drivers, had stoutly resisted the change.

In railroad rate-making and accounting of every sort conditions were even

more chaotic. There were no standards. You could hardly expect a group of

several hundred widely separated and highly individualistic railroads to

have uniform bookkeeping practices when in many instances there were not

enough standards in the building of their cars to enable them to be

coupled together into a single train.

And yet with all of this wretched system, or lack of any system

whatsoever, those little railroads of yesterday had many, many things in

their favor. Their very individuality was an asset. The fact that they

were owned and operated by men who lived upon their lines or very close to

them was a still greater asset. The railroad executive of those days

understood from first-hand knowledge and intimate personal contact the

problems as well as the opportunities of the communities that he was

trying to serve. And a third and still greater asset was the close

personal relationship that he might enjoy with his employees. On a

railroad owning from twelve to twenty locomotives he might know, and

almost invariably did know, not only each of those engines individually

but the men who ran them. In fact in those days it was customary for a

locomotive to be named and to be assigned to a permanent crew of engineer

and fireman, who immediately began to take a surpassing pride in the

upkeep of their craft--in keeping her boiler black and shiny and her

brasses and her nickel-work gleaming like new.

In these days the brass and the nickel and all the rest of the former gay

trimmings have departed from the locomotive. Its boiler is no longer

shiny. On the average American railroad, locomotive upkeep has become an

all but forgotten art. The names and the individuality have gone from its

engines. They are assigned to crews out of the roundhouses in a very

systematic and utterly unsentimental way. Yet something very definite has

been lost.

You could scarce expect a modern railroad president whose system may own

three or four thousand locomotives to know any considerable number of the

men who operate them. Yet here is the loss. On that little road of

yester-year the president not only knew his engine crews by

name--generally calling them by their first names--but his conductors, his

station-agents, his telegraphers too. And knowing them, understanding

them, working with them in almost every case, there was no labor-union

problem to confront him. There were no unions then for the simple reason

that there was no necessity for them. The labor-union upon the railroad

with all of its problems for the management came definitely as an effect

of its super-consolidation. And the railroad tradition began to fall.

Even after the first steps in the inevitable consolidation of our various

lines had begun, when for instance the six railroads in the

three-hundred-mile stretch between Albany and Buffalo had been merged into

the first New York Central, this intimate sense of personal relationship

remained for a long time.

The statue of William Bliss, president of the Boston and Albany railroad,

which stood for many years in the lobby of the old Kneeland Street Station

in Boston, typified it. When the Boston and Albany was the Boston and

Albany it was the pride not only of its employees but of all New England.

But when, in accordance with the general railroad practice of the moment,

the Vanderbilts took it over upon a long lease and painted out the old

name, placing "New York Central" upon the cars and locomotives, New

England rose in its anger, and it was not appeased until a shrewd

executive, going to Boston from New York, reversed the new order of things

and painted the beloved old name back again upon the equipment. After

which serenity ruled once again along the lines of the "Albany," as the

Boston people to this day love to call it.

What's in a name? More than you can imagine. I asked a shrewd brotherhood

man once what the New York Central had sacrificed in operating efficiency

when it had chosen to paint the names "Lake Shore," "Michigan Central,"

and "Big Four" from its western constituent lines, and he said that he

guessed--it really is anybody's guess--that 50 per cent. would be about

right. The Pennsylvania system, with a great deal of real wisdom and long

vision, not many months ago decided to divide itself into four large

regional operating divisions, all to be known however under the general

title of Pennsylvania System. Yet an old passenger conductor with whom I

have ridden these great many years between New York and Philadelphia

confessed to me his great personal regret at the passing of the fine old

name, "Pennsylvania Railroad."

"I feel as if I had buried an old friend," said he. So felt others, and a

little later the Pennsylvania dropped the "system" from its official name

and came back as the good old Pennsylvania Railroad once again.

A few miles further south the people are still grieving over the loss of

the "Cumberland Valley," one of the earliest railroads of the

land--incidentally a Pennsylvania constituency and one which until the

recent change had held its name and its individuality. Across the land the

thing repeats itself again and again. Away up in the northwestern corner

you will find people to-day lamenting the renaming of their chief railroad

system into the Union Pacific.

"We were proud of the name 'Oregon-Washington Railway,'" said one of the

really big men of that community not long ago. "It was a good railroad and

we felt that in no small sense its goodness reflected that of this

particular corner of the U. S. A."

If this feeling comes to the patrons of these railroads how much more

distinctly must it come to their workers? In subsequent chapters in a

pleading for a division of our national railroad structure into shorter

operating units, despite the ponderous suggestions of the Transportation

Act, I am going to refer to the fact that in this country a half-dozen or

so of the small railroads ("small" at least in a comparative sense) are

the best operated and hence the most profitable lines in the land. And

incidentally, despite the great tangle of red tape that the government

system of railroad control has spun about them, they still enjoy

comparatively friendly relations with their labor.

With the fundamental idea of railroad consolidation one can have no

quarrel whatsoever. It was inevitable. It came logically and

sequentially--in some ways before many folk were really aware of it. When

a very few years after the close of the Civil War the merger of the Grand

Trunk railroad was accomplished--a single system of nearly four thousand

miles, stretching all the way from Portland, Maine, by way of Montreal and

Toronto to Detroit (a little later, on to Chicago)--America stood aghast.

And yet what were four thousand miles to be compared with a single system

of twelve thousand miles of main-line track--nearly one-twentieth of the

total mileage in the United States, upon which moves one-seventh of the

traffic of the nation? And yet here is but one of three or four big

twelve-thousand-mile systems that our land holds.

In our Yankee version of the English language we dearly love that word

"big." Yet is it not now a fair time to ask what that bigness has really

cost us? Granted that with a certain amount of real aid from the state it

has given us through rail and through car routes of an amazing

multiplicity--even though one cannot cross the United States from the

Atlantic to the Pacific in a through car, unless it be a freight-car--that

it has simplified vastly our tariffs, our ticketing and our way-bill

systems, it certainly is failing to-day in many, many instances to give us

the high degree of service which our railroads themselves have educated us

to expect. As I said at the beginning our transport service to-day is

appreciably poorer and the rates a great deal higher than they were a

decade ago, while the personnel problem of our railroads, in their

executive ranks as well as in the ranks of the great mass of their labor,

has become a matter of real alarm.

In this book I am going to give scant attention, if any, either to the

scandals or to the triumphs of railroad finance for a half-century past in

this country. Neither am I going to hark back to the evils of multiple and

ofttimes conflicting regulation of our carriers by the Federal and the

forty-eight State governments. Both have been pretty thoroughly treated

over and over again. And so we shall assume, first that the railroads must

be properly financed in order to function at all, and second that the

principle of regulation by the state is so thoroughly established by this

time as to be removed from the field of controversial argument; while the

perplexing factor of many and ofttimes annoying conflicts between the

State regulatory bodies, or between them and the Federal Interstate

Commerce Commission, is being solved automatically by the steadily

increasing usurpation of the individual rights of the various States by

the centralized government at Washington.

The problems upon which I shall prefer to linger in this book are those

that concern the physical side of our national railroad structure, future

as well as present, its operating problems as well as its purely human

ones, in these last including not merely the very human problem of the men

and women who work upon the railroad but those who ride upon it or

otherwise become its patrons. Granting the great importance of its

questions of finance and of state regulation, I still feel that these last

are of still greater portent to its future. With these properly solved,

finance and regulation, to a large extent at least, will solve themselves.

A national railroad structure well operated, with efficiency, with

economy, with vision, with a broad human relationship, will not have to

worry very much about the sale of its securities or about interference

from fussy regulatory bodies. I think that this may be fairly set down as

a fundamental fact in our argument.

As to what constitutes good operation, efficiency, economy, vision, broad

human relationship, there will of course come more than one opportunity

for an honest difference of opinion. It is in the sincere effort to gain

the real current of forward-looking opinion upon these great questions of

our national transportation problem that the writer for the last sixteen

years has traveled many thousands of miles across the United States and

Canada and has interviewed hundreds of people in railroad circles and out.

For more than a dozen years past he has foreseen the present crisis. The

coming of the World War hastened it a bit perhaps but the crisis was

inevitable. A drifting policy, which ofttimes was no policy at all,

followed by both the railroad and the various groups of persons that

assumed to control it, has brought us almost to the edge of supreme

catastrophe.

* * * * *

Go back with me once again to the beginning. Remember if you will that the

railroad in the United States to-day is a little more than ninety years

old. For eighty of those years it was in a state of steady and healthy

development and progress. For the last ten or twelve of them it has not

only been in a state of arrested development but narrowly approaching

entrance into a state of decadence.

For eighty years the American railroad grew, and grew heartily. It

financed its own growth and, consisting very largely of independent units,

financed itself quite readily and as a rule locally. It kept its physical

facilities, track and rolling-stock and all the rest of it, abreast if not

ahead of actual traffic requirements. About the beginning of the present

century, as presently we shall see, it began to feel the burden of greatly

increased material costs, and of taxation also. It met these added costs,

without any very visible addition to its revenues, by holding rather

tightly down on its pay-roll and by adopting large operating efficiencies

and economies. For a while these sufficed. They had to suffice. Appeals to

the State and Federal regulatory commissions for increased rates were

generally vetoed pretty promptly. Since the establishment of the

Interstate Commerce Commission in 1887 these regulatory boards had

increased steadily in strength and in prestige. They felt their oats. And

many did not hesitate to deny the applications of the roads for rate

increases.

In 1906 something happened which in later years was to loom large in

American railroad history. Congress, under a considerable pressure from

President Theodore Roosevelt, passed the so-called Hepburn Bill, radically

amending the Interstate Commerce Act and giving the I. C. C. an almost

unbridled authority over railroad rates. The Interstate Commerce

Commission could not itself authorize changes in the tariffs of the

carriers but it could, and frequently did, veto any changes that the roads

themselves saw fit to make.

Parenthetically it may be stated that even though this increase of power

granted to the big Federal commission stirred up something of a

competitive energy on the part of the State regulatory commissions to

supervise more carefully than ever before the operation of the railroads

through their respective bailiwicks, it also marked the long beginning of

the end for the State boards; as far at least as our steam railroads are

concerned. As I have said already, it is still another of our difficult

national question-marks in which the old, old problem of States' rights

again shows its disagreeable face. Eventually it probably will be ended by

shearing these State boards of virtually if not absolutely all of their

supervision over interstate railroads; and the I. C. C. long since has

shown marvelous ways in which this phrase may be extended to cover even

the tiniest of apparent intra-state lines.

The passage of the Hepburn Bill put the first quietus upon the development

of the carriers. Soon after, they began to cease large additions to their

plants, even though the nation that they served went steadily ahead in its

development, by leaps and by bounds. Yet for full ten years after 1906 the

net earnings of the carriers continued to increase, in pace with the great

growth of the nation and its industries in those selfsame years, until

under the war stress of 1916 and 1917 they had come to the astounding

total of almost a billion dollars a year "net operating income," which

under the rigorous accounting systems of the Interstate Commerce

Commission signifies the amounts available for paying interest and

dividends and making permanent improvements. In other words the

deterioration of the national railroad structure had begun well before the

maximum of net earnings had been reached, and by the end of 1917 had

reached so serious a stage as to threaten a possible breakdown--I am

using this last word advisedly--or at best a fearsome congestion and

uselessness, in the face of one of the gravest national crises that the

United States has ever had to meet.

Confronted with such a possibility President Wilson did not hesitate. He

took no chances. With the supreme powers which were his as the war leader

of the nation he reached out and took over the railroads and made them a

direct agency of the national conduct of the war, under the name of the

United States Railroad Administration, placing them under the direct and

autocratic control of William G. McAdoo, secretary of the treasury and a

man with not only a large knowledge of railroad finance but with a degree

of success as an actual railroad operator--of the short but busy Hudson

and Manhattan rapid transit lines connecting New York, Jersey City,

Hoboken, and Newark.

There has perhaps been no single activity of the Wilson administration and

its conduct of the war more seriously discussed and criticized than its

control of the railroads. Even the gigantic expenditures and manifest

blunders of the Shipping Board have been passed quickly by, to linger upon

those of Mr. McAdoo and his fellows in the Railroad Administration. Yet

when all has been fairly considered the Railroad Administration in its

brief twenty-six months of life accomplished some very creditable things,

and some not so creditable--some of these obvious, some others most

unexpected and strangely outre. It was obvious for instance that a highly

centralized, automatic, and supreme control could obtain large operating

economies by completely obliterating competition and could by appealing to

the traveler and the shipper in the role of a sadly harassed government,

obtain a cooperation that no private agency might ever obtain.

Because the brief history of the Railroad Administration enters so very

vitally into any consideration of the railroad situation in the United

States both to-day and to-morrow, I shall come to it for the next chapter

of this book. For the final paragraphs of this, consider once again the

present lowered efficiency of our rail transport in this country. That it

has been bettered in some of its phases since its relinquishment by the

government I shall not deny; that it has been bettered in some of the most

vital of them I shall dispute until the end. The proofs are too easily at

hand. And so the reading of them may lead us into a really intelligent

understanding of the situation.

* * * * *

What's the matter with our railroads?

That question is being asked hundreds of times each day by business men

all the way across the land--from Portland, Maine, to Portland, Oregon,

from north to south and back again. These men, keen in their perception of

many of the great and perplexing problems assailing the United States at

this moment, frankly admit their lack of an understanding of the railroad

one. They are torn by a vast conflict of statements and of opinions.

Skilled propagandists succeed only in adding to the confusion. Apparently

nowhere is an independent voice raised in the interest of the common

citizen of America, the man who perhaps is not a wholesale user of our

overland transport but who realizes from personal contact each time he

makes a shipment of his goods or goes himself abroad into the land that

our national railroad has suffered a vast deterioration within the last

decade, that it no longer functions with anything like the high efficiency

that it had attained say twelve or fifteen years ago.

What's the matter with our railroads?

It is a fair question, and one that demands a fair answer. Why should not

our railroad structure in the United States to-day be rendering service at

least as good as that which it rendered but ten or twelve years ago? Is it

man failure, either in the lists of the rank and file or in those of the

executives? Is it, as has been charged frequently, interference by the

Federal and State governments or, to put it in a gentler fashion,

over-regulation by these same agencies? Is there lack of intelligence or

vision or human understanding? If so, just where are these lacks?

It is to the answering of these questions that the writer puts his sixteen

years of intimate and personal study of the American railroad and, as he

has just promised, takes up that problem on April 5, 1917, the day that

the United States of America officially entered the World War overseas.

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