THE UNITED STATES RAILROAD ADMINISTRATION (CONTINUED)
I bear no brief for Mr. McAdoo. On the contrary I have been one of his
most persistent, although, I trust, consistent, critics. In the columns of
the "Saturday Evening Post" and other widely circulated publications I
have tried to set down fairly, impartially, and thoroughly both the
accomplishment and the shortcomings of that remarkable organization, the
United States Railroad Administration. And with this final chapter written
I shall close for myself, I hope forever, the recital of its history.
It is but fair to say that even though McAdoo's great economies of
operation through radical consolidation and reroutings were obvious, it
took courage, none the less, to put many of them into effect. Tradition,
the sentiment built up through long years of hot competitive practice,
local pride and local spirit here and there and everywhere, had to be met
and overcome successfully, even though the war-time issue was to come into
the reckoning. McAdoo has never been known for lack of courage. He reached
out here and he reached out there and generally he attained his desires.
"You talk about Fairfax Harrison. Of all the men in authority in
Washington, it was McAdoo who really played the lone hand." So speaks a
man who from the very beginning of the war overseas made a careful study
of the Administration and its human components. He speaks the truth--and
does not.
"The trouble with McAdoo," says a radical who is immensely interested in
the entire railroad situation, "was that he was in the hands of the old
railroad gang and controlled body and soul by them."
He also speaks the truth, and does not. I presume that we may translate
the "old railroad gang" into the group of experienced and very able and
honest railroad executives that the first director-general gathered about
him, and who without exception rendered him efficient service. Mr. McAdoo
himself says this. And he ought to know.
In the preceding chapter we saw some of the sweeping changes and economies
that were wrought in the freight operation of the railroads under
governmental control; the passenger ones were even more dramatic. We have
already seen how at a fell swoop the excellent service between New York
and Washington was smashed almost into smithereens, and how the good
horse-sense of the first director-general came to the rescue then and
there and restored a service that would enable men to travel back and
forth between these cities on their war-time errands in a degree of
comfort sufficient at least to render them best able to carry on their
press of unusual duties. Other services were not so restored. The Broadway
Limited, the crack twenty-hour train of Mr. Rea's Pennsylvania railroad,
was an early sacrifice. In May, 1918, Mr. McAdoo approved of a sweeping
economy in the western portion of the country, the territory west of
Chicago and St. Louis. In this great slash alone estimated yearly savings
of 11,728,000 passenger train-miles were made. These savings were
accomplished chiefly by abandoning duplicate and expensive fast train
services (please also note this for future reference) between Chicago and
the Pacific coast cities and assigning, supposedly to the shortest and
most direct route in each case, the fastest through service. Under this
scheme the Santa Fe became the preferred route between Chicago and Los
Angeles; the quite logical grouping of Chicago and Northwestern, Union
Pacific, and the former Central Pacific division of the Southern Pacific,
from Chicago to San Francisco; the Burlington and the Northern Pacific to
Portland, and the Milwaukee to Seattle.
These selections were made arbitrarily. They cost many heartaches,
however. The Rock Island--the shortest route between Chicago and the
important railroad gateway of El Paso, and but thirty-five miles longer
between Chicago and Los Angeles--watched the decapitation of the Golden
State Limited, which it had worked so hard to upbuild, with feelings of
great bitterness and regret. It felt down in the bottom of its heart that
it had been discriminated against. When peace came again--if ever it
should come again--and the railroads were restored to their private
operators--if they ever were to be restored again--the Golden State
Limited would have to start once again at the very bottom of the ladder.
The most notable consolidations of passenger service under the government
administration came, however, in the central portions of the land. In the
district about Chicago under private and competitive control there was
(and to-day is once again) a great waste of through passenger-train
service. With six competing railroads from Chicago to the Twin Cities, six
to Omaha, six to Kansas City, four to St. Louis, and three to Cincinnati,
and with almost every one of these roads trying to maintain a service as
good as its competitors, if not better, there was and is a vast
preponderance of through passenger-trains, many times to the cost of
weaker or branch lines, even of well-to-do-systems. It is not at all
uncommon for a branch line, particularly if it passes through a
non-competitive district, to be paying with its all-too-few and
overcrowded local trains for the extravagances of the underfilled through
ones upon the main line. The little wheezy locomotive and the two
forty-year-old battered day-coaches of the down local to Willettsburg or
Sand Corners was and still is the upkeep of the lordly limited all-Pullman
and aristocratic from the point of its crack new locomotive to the far tip
of its brass-railed observation-platform. Do not forget that. And also do
not forget that a good proportion of the voting population of any State
lives upon the branch lines, which may have accounted in the past for some
pretty radical railroad legislation and regulation. Here is a point that
the average railroad operator, with his nose close down to freight
ton-miles, may overlook. He may have and frankly express a contempt for
the passenger service but it is at all times the chief point of actual
contact between the railroad and its patrons.
* * * * *
Moreover from Chicago to the group of cities a night's ride distant from
it in several directions the plethora of superb trains moved in
competitive squadrons. By that I mean, even though there were on four
railroads between that city and St. Louis before the coming of the war
fifteen fast through trains in each direction, there were to all practical
purposes but three or four. For competition so bunched the trains that
there was an important group of through expresses leaving Chicago at noon
and another important group at midnight, with two or three less important
slower expresses at nine in the morning and again at nine in the evening.
An intelligent centralized management would seemingly have found it
possible so to distribute fifteen through trains that there would have
been a through train from Chicago to St. Louis--or the reverse--almost
each workaday hour. The through service between New York and Washington
and between New York and Boston is so distributed.
Even under centralized control, however, such an even distribution of
passenger-trains between midland cities of the United States is not
entirely possible. For even in the case which we have before us, there are
important connections to be reckoned with, both at Chicago and at St.
Louis. These trains must be met, and if the best through passenger-trains
for the Southwest leave the St. Louis Union Station at about nine o'clock
in the evening, the resident of Decatur, which is on the main line of the
Wabash, and of Springfield, which is on the main line of the Chicago and
Alton, should in all fairness have an equal chance at them.
Yet, despite this hindering factor, the McAdoo centralized authority
succeeded in cutting the fifteen through trains in each direction down to
nine and in slightly spreading the leaving times. The result apparently
worked little hardship to the through traveler of war-time days between
Chicago and St. Louis. The train on which he rode might be a little longer
and a little better filled than usual, but its running-time and its
equipment, save for the probable elimination of the observation-car, were
virtually unchanged. And 15,706 train-miles and 9,538 tons of coal were
being saved in Chicago-St. Louis passenger service each month.
But how about Monticello?
Monticello, Illinois, is not a big town, as big towns go. Yet it is an
enterprising county-seat of some 2,000 people situated on the Chicago-St.
Louis main line of the Wabash just a few miles north of Decatur. And it
has definite rights. Do not forget that. In the old days of ante-bellum
private control--sin-filled and really wasteful competitive control--there
were four through trains and two locals through Monticello in each
direction each day. And the Monticello banker or merchant who wanted to
run down to St. Louis and come back at night had an easy affair of it. But
with the government train consolidation he could get up in the middle of
the night and catch the 2:30 train south or else wait for the next express
at 4:05 in the afternoon. The Government was not particularly worried
about him.
Let me repeat. Monticello has definite rights to adequate railroad
transportation. And this holds true whether that transportation comes from
the Government or the individual. Monticello--ten thousand Monticellos, if
you please--has a considerable voting population. And once the real war
emergency was passed and the Armistice safely signed, ten thousand
Monticellos began asking if government operation was going to offer them
no better relief from the ills of private operation. It was as nothing to
them that there had been a saving of trains and of train mileage between
Chicago and St. Louis with no apparent diminution of the service between
those two metropolitan cities; they simply knew that there had been a
great lessening of their own service. And while they were willing to
accept such a lessening as a part of their war sacrifice they did not
intend to accept it as a permanent transportation condition, either from
the Government or from private capital.
This general plan held, however. There are some pretty big and powerful
Monticellos between Chicago and the coast. Denver is one of them, Omaha is
another, Kansas City a third. And because, to make a single instance, any
one of these cities demands a fairly quick and efficient service to
Portland and the Puget Sound points, it was necessary after a time to
modify to some extent the simplified route plan and to give these
intermediate points through train service, or at least through Pullman
service.
These changes and others like them have brought great savings in passenger
mileage. That cannot be denied, even though one is tempted to add a
doubting corollary as to the shattering of the finest passenger service
that any land ever has received. The war crisis demanded curtailments. The
railroads themselves had recognized that, even before the coming of the
McAdoo administration. From May 1, 1917, up to the end of that year their
War Board succeeded in reducing the passenger service by 28,656,983
train-miles. Yet this was not a circumstance to the slashing done by the
Federal Administration. In September, 1918, McAdoo reported to President
Wilson that he had succeeded in eliminating passenger-trains to the extent
of 47,420,000 additional miles a year, a really astounding total.
But in all probability the most popular economy of this sort that McAdoo
succeeded in bringing about was in the consolidation of passenger
terminals across the land, all the way from the biggest towns down to the
very smallest. He began at the top in the city of New York. The
Pennsylvania railroad since the opening of its wonderful new station in
Seventh Avenue in that city in November, 1910, quite naturally had held it
exclusively for itself and for its subsidiary, the Long Island railroad.
In that tight stand it was right from every competitive point of view. It
had taken the great engineering problem and its financial risk entirely
upon its own shoulders; shrewd railroaders had shaken their heads
dubiously as they contemplated the daring move; and there was no reason
why it should share the fruits of its enterprise with its competitors.
But the competitive situation had been eliminated. Therefore McAdoo did
not hesitate in personally ordering that the highly competitive Baltimore
and Ohio, as well as the non-competitive Lehigh Valley (which up to that
time had been using the old Pennsylvania station in Jersey City), should
bring its through trains into the Pennsylvania terminal on Manhattan
Island. (Incidentally, at the eleventh hour of the existence of the
Railroad War Board the Pennsylvania had proffered the use of its station
for this purpose.) The tickets of the B. & O. and the Pennsylvania between
New York and Washington and intermediate points were moreover made
completely interchangeable.
The Pennsylvania people did not enjoy these orders, even though they had
proffered the station at New York. But they were good soldiers. The
country was at war, and they complied readily with war-time orders, no
matter how unreasonable they may have seemed to them.
In a similar fashion the Southern Pacific people made wry faces over the
order that admitted the Santa Fe into their ancient train-shed and "mole"
at Oakland, opposite San Francisco. Their position was not so well taken
however. Even in the competitive era the fast ferry-boats of the Santa Fe,
coming from its rail terminal at Richmond, had entered the same terminal
with the S. P. at San Francisco--the great union ferry-house at the foot
of Market Street. And had not the Santa Fe, as the longer route, been
compelled as a war measure to sacrifice its two pet trains between San
Francisco and Los Angeles and San Diego, the precious Saint and the Angel?
These consolidations--there were many similar ones in the freight
terminals as well--went on all the way across the land. Where there were
two or more engine-houses in a place fairly close together, and it was
humanly possible so to do, they were consolidated. Trackage at terminals
was simplified; for instance at Chicago the trains of the Baltimore and
Ohio and Pere Marquette systems, which formerly had entered their
passenger stations by a rather circuitous route, were now sent in to them
over the tracks of the Pennsylvania, and a saving of approximately seven
miles and forty minutes of running time made.
Certain captious critics of Mr. McAdoo's constructive policies have seen
in these terminal and other physical consolidations of the several
carriers a deep-laid plot to "scramble the railroad eggs," which means so
to weld the properties together that they could not be easily separated
again. Despite the fact that the "unscrambling" has indeed been no
particularly easy task, I do not see in McAdoo the deep-dyed villain that
so many others perceive. I think that he consolidated these terminals and
other operating devices in the interest of real war-time efficiency and
economy, and for no other reason. That would seem at this time to be an
impartial verdict upon his actions.
I am also setting these things down in some detail because they too are
essential to a proper understanding of the final results of the nation's
first sweeping experiment in centralized and governmental railroad
control. The most of these operating economies were the accomplishments of
the Railroad Administration of the sort which some time ago I
characterized as obvious. Now consider a few of them that were
strange--marvelously strange, you may prefer to put it:
The Railroad Administration sought as one of the first of its economies
the consolidation of the various city ticket-offices that competition long
ago had set out in the larger cities of the land, as well as the complete
abolition of the so-called "off the line" offices--agencies in cities more
or less remote from the actual territory of any given railroad. So far, so
good. So far was obvious and sensible economy. If an office here and an
office there had been retained for the essential travel needs of the
roads and their office forces and furniture had been brought together
wherever it was necessary, the others being either abandoned or
temporarily closed, there would have been no complaint. But the "winning
of the war" took the strange effect in most of the large cities of the
land that the Railroad Administration hired new office space--in Chicago
it took virtually the entire ground-floor of a huge new sky-scraper on a
ten-year lease at $65,000 a year--and installed elaborate and expensive
new mahogany office equipment. In New York alone four of these great new
offices were fitted out, and many of the smaller and cheaper offices,
abandoned, stood idle for months, while the rent went merrily forward.
These things were inexcusable. So were many others. Apparently the
ordinarily astute first director-general made a great mistake at the
outset. He did not realize perhaps that he was attempting to do two things
at once--trying to solve an acute war problem as well as a great economic
one that had been gathering urgency for nearly a decade before the coming
of the World War. That at least is a kind construction to place upon his
policy. And if it was indeed his policy it was not so very different from
that which was followed those days by many other large activities down at
Washington. Apparently we have not yet learned that almost any war problem
is separate and distinct from those of our great social economic questions
that are forever showing themselves in one form or another. For instance a
good many of us confused the problems of the capitalization and labor of
the railroads with that of taking them over as an emergency war measure,
just as we repeatedly mixed up all sorts of social and economic problems
with the making of an emergency war revenue tax.
Such apparently is also a fair construction to place upon Mr. McAdoo's
remarkable activities in setting great forces of designers and draftsmen
at work to create new "standardized" locomotives and cars for our
temporarily nationalized railroad system. He made a widely circulated
statement that he had found "2303 different styles of freight-cars and
almost as many different descriptions of locomotives" and that these
presently would be reduced by his experts to twelve standard types of
freight-cars, and to six standard types of locomotives of two weights
each. Unquestionably our railroad freight equipment has stood and still
stands greatly in need of much standardization, although the roads
themselves long ago established enough of this to permit common operation
of their cars. But I doubt if such a standardization program had any real
part in an emergency war plan. I never have been able to reason that out
to my own satisfaction.
Nevertheless McAdoo was satisfied with his own idea and in 1918 alone
ordered 1430 of his standard locomotives and about 100,000 of the
freight-cars, at prices enormously above those of peace days. The engines
and the cars eventually were delivered. That they were good engines and
good cars I do not doubt. But they have never enjoyed any marked
popularity with the railroad operating people. They are a conservative
lot, these old hard-shell railroad executives who still hang on to a
remarkable degree all the way across the land. You cannot lead them easily
to new ways of thought.
All these fine frills, introduced in the midst of one of the most acute
national crises ever visited upon this country, cost the Railroad
Administration much time and much money--much useless time and much money
that might have been used to better advantage in other directions. Digress
for a moment with me and compare the great and bulky operations of the
Railroad Administration with those of its prototype across the Atlantic,
the war-created Railway Executive Committee of England.
The war wreaked no ravages elsewhere in England more striking than those
that were wreaked upon her railways. She was quick to realize the supreme
importance of her rail carriers to her in her crisis. And so she reached
out within a fortnight after the outrage of Louvain and, with the
authority that had been given her long years before by Parliament, took
over the rail lines and began operating them for the national weal. There
was no policy of vacillation on her part. It was a situation that she had
anticipated and solved several years before the coming of the war.
Even before 1912 there was in existence an English body known as the War
Council of the Engineer and Railway Staff Corps. This council consisted of
the general managers (in England the post of general manager compares with
that of the president of an American railroad) of the railways that in the
event of war with a Continental power would have the most to do with
military traffic. The council made elaborate and definite war plans. The
possible invasion of the east coast was anticipated and detailed
plans--even to the working out of actual train and engine schedules--were
made for the evacuation if necessary of the population of east coast towns
and cities and the movement of troops and heavy guns up to them. This
council by 1912 had developed into the Railway Executive Committee, which
was composed of the general managers of the twelve most important railway
systems of Great Britain. It in turn formed an integral part of a Board of
Communications, which included representatives of the War Office, the
Admiralty, the Board of Trade, and the Home Office. Among these
representatives was Sir Eric Geddes, then first lord of the Admiralty, a
young Englishman of great promise and energy and to-day the British
minister of transport.
The Railway Executive Committee went to its job quickly and without
ostentation. While it sought to unify the operation of John Bull's
railways so that he might help win the war most efficiently and most
promptly, it had no false or grandiloquent ideas of creating a single
national rail system overnight. It did not seek to tear down in a day what
had taken the patient labor of years to upbuild. It sought not to
standardize either baggage-cars or locomotives or dining-car meals. It
even escaped having a director-general. Its printed forms were few and
modest. It had no press-agent, no propaganda. Few people outside of
railway and army circles even knew of its existence. At the height of its
endeavors it employed in its joint efforts a total force of not more than
eighteen officers and clerks, who occupied two floors of a very small
office-building directly across the way from the Houses of Parliament. It
was an extremely simple enterprise. But it functioned and functioned
extremely well.
Eighteen employees, as against more than twelve hundred at the very
beginning of the United States Railroad Administration. Even to-day, two
years after it has ceased to function, there are still several hundred
retainers faithfully hanging on to their official jobs.
Mr. McAdoo might find some shrewd lawyer's way of proving his
"standardized" locomotives and freight-cars a necessity for the winning of
the war, even though the elaborate consolidated ticket-offices would not
be so easy to explain. But just why orders should have emanated from his
offices to place his name as well as his title upon every piece of printed
matter issued by the United States Railroad Administration--even to the
dining-car menus and even to each third mile upon the scrip-books issued
for passenger travel--is particularly difficult to understand.
Particularly so, as a war measure in a war for democracy, at any rate. The
hub of the troubles with Mr. McAdoo seems to have been that he regarded a
war crisis as a fit moment for an experiment in the details of a
centralized railroad operation for the United States.
* * * * *
The chief criticism launched against the first director-general of the
Railroad Administration is in regard to his handling of railroad labor.
The more conservative the mind that you scratch upon this extremely
delicate topic the more violent the immediate reaction. "Barron's Weekly,"
published by the "Wall Street Journal," regards Mr. McAdoo's attitude
toward railroad labor as that of an arch-tyrant. But that is merely
typical Wall Street attitude and to be dismissed as such. I had, as I have
already said, very little sympathy with the director-general's addresses
to the men at Pueblo and at El Paso, where he assured them that at last
they had come into the rights which had been denied them and that
hereafter they were to receive the square deal. That was unnecessary. More
than unnecessary, it was unfair. And more than that, it was an extremely
dangerous doctrine to be preaching, particularly at that time. I cannot
see how it possibly could do one single thing toward upbuilding railroad
morale, the thing needed at that moment more than anything else. It could
scarcely do else than lower that shattered morale still further. And it is
possible that Mr. McAdoo regrets at this moment that he ever gave
utterance to those two speeches, patting railroad labor on the back when
railroad labor should have been congratulating itself that it was not
conscripted and sent into the trenches. This is said with all deference
and with a high regard for railroad labor in the United States.
On the other hand McAdoo did a most commendable and forward-looking thing
when he gave labor a fair place in his official cabinet. Then and there he
played a trump card that private ownership and operation of our railroads
forever and a day had failed to play. He played another when at the very
beginning of his term of office he put the entire question of wages in the
hands of a competent commission headed by the late Franklin K. Lane, of
whose fairness and ability there could be no question whatsoever. Mr. Lane
knew men; he also knew railroads. He was perhaps the one man in the United
States who might have taken the Railroad Administration and made an
unqualified success of it. The ablest member of the Wilson cabinet, he was
compelled to take a back seat in the big war drama. His capabilities and
his experience were virtually ignored.
The Lane Commission went more carefully into the question of railroad
wages than any one had ever before gone. It did what no individual
railroad or group of railroads ever had the intelligence or the courage or
the fairness to do--attempted to make some sort of impartial analysis of
living costs to the railroader, and to use these as a basis for the fixing
of his wage. The question of compensation never has been placed upon a
scientific basis.
The whole question was so big and so vital that even despite war-time
pressure the Lane Commission took until May, 1918, to render its decision
in favor of considerable increases to almost every type and rank of
railroad worker. It unquestionably was a fair decision. Some that followed
may not have been so fair; McAdoo unquestionably was led far afield
himself by some of his advisers in elaborate and almost absurd attempts at
standardized wage and working agreements. Yet at the time he took over the
railroads for the Government the rank and file of railroaders
unquestionably were underpaid--in certain cases grossly underpaid, and
with their living costs rising by leaps and by bounds.
This entire question of railroad labor, its rights and its wage, is so
involved and so complicated in detail that I am going to leave it for
another portion of this book. It is enough to say here in review of the
McAdoo administration that on December 15, 1917, thirteen days before he
assumed control, the total number of employees upon the Class I roads of
the land (87 per cent. of the railroad mileage of the country; all save
the lines with gross revenues of less than a million dollars a year) was
1,703,685; on January 15, 1919, four days after he had relinquished
control, it had grown to 1,843,530--an increase of 139,846, or 8.2 per
cent. Yet the pay-roll expense, which had been 61.48 per cent. of all
operating costs in 1917, had only risen to 65.62 per cent. It was not
until the following year that an average increase of nearly 50 per cent.
in railroad wages was granted, in the face of a still generally increasing
cost of living.
But by the next year McAdoo was out of the job. The Armistice had been
signed on November 11, 1918, and immediately thereafter Mr. Wilson gave
heed to Mr. McAdoo's protestations that, the war-time emergency having
passed, he was no longer needed and that he must go out into the world to
recoup his shattered personal fortune. Accordingly he ceased to be
director-general of the United States Railroad Administration on January
11, 1919, and was immediately succeeded by his right-hand assistant,
Walker D. Hines, whom we have seen already as the one-time chairman of the
board of the immensely important Santa Fe railway system.
Hines is in many ways the very antithesis of McAdoo. There is nothing
dramatic or spectacular about him whatever. On the contrary he is what he
began to be, a typical corporation lawyer, cool-headed, judicial, shrewd,
and honest. He probably would tell you himself that he broadened a good
deal down in the offices of the Railroad Administration. I could see the
changes. He became vastly more human; his Washington experience seemed to
quicken his sympathies and to broaden his understanding of men.
His job was vastly different from that of McAdoo. The job, like the man,
now lacked fireworks. There were no longer troops and their munitions to
be moved double-quick to the seaboard; instead there was the rather
leisurely return of the boys in khaki to their homes. Industrial
production across the land was slackening, not quickly but appreciably.
Oddly enough, however, railroad revenues still were increasing; they were
not to reach their peak until near the end of 1920. Total operating
revenues of the Class I roads, which were $4,014,142,743 in 1917, and
which had increased to $4,880,953,480 in 1918, came to $5,144,795,154 in
1919. In 1920 they reached, under the stimulus of tariff increases ranging
from 20 to 50 per cent., the enormous summit total of $6,171,493,301. In
the first ten months of 1921, the most recent figures at hand, they were
but $4,672,651,346, as compared with $5,082,819,687 for the same ten
months of 1920.
It was under the Hines administration that most of the national working
agreements were made, to which the private railroad operators were to take
such extreme exception after the return of the properties to their
control. But again I must ask you to defer comment or criticism until we
have taken up the entire question of railroad labor as a sizable problem
by itself. It is enough to say here that Hines encountered a very
considerable opposition when he raised wages generously, and raised rates
not at all.
The fact remains, nevertheless, that Mr. Hines had in his stewardship a
very thankless job at the best; it is always hard to follow a prima donna
upon the stage. And McAdoo was some prima donna! Yet in loyalty and in
energy Hines gave place to no one. He took the thankless job and made the
best of it. He undermined his health by his devotion to it and received no
praise from any quarter. His best reward must come in his own knowledge
that, all in all, he did a good job, with difficult timber--the best of
the subordinates of the Railroad Administration already were leaving it
for future peace-time jobs of permanency--and with no encouragement
whatsoever. And when the United States Railroad Administration ceased its
active career upon March 1, 1920, and handed the railroads back to their
owners for operation, I fancy that none was more rejoiced than Walker D.
Hines.
What then was the net result of our first--and possibly our last--national
experiment in the government operation of our huge railroad plant?
Even to-day, fully twenty-four months removed from the experiment itself,
that is a difficult question to answer quickly and fairly. It is even
difficult to say that, regarded merely as an experiment, it was a fair
test. Certainly no laboratory expert deliberately would choose the
critical final hours of a great war as an ideal time for dispassionate
experimentation. It was in such hours that McAdoo, who was the head and
front of the entire experiment, worked. When his successor came to high
office the entire country was in the "let-down" that swept across the land
as the very natural sequence of great national tension and endeavor.
The distinguished writer upon railroad economies, William J. Cunningham,
James J. Hill professor of transportation at Harvard and himself for a
time a subordinate executive of the Railroad Administration, does not
believe that the experiment was a success. In a recent issue of the
"Quarterly Journal of Economics" he says:
Finally we ask ourselves whether our recent experiment in Federal
control affords an adequate test of the desirability of a permanent
policy of public ownership and management. The answer is plainly in
the negative. The results in 1918 were favorable. In 1919 they were
unfavorable. They were favorable in 1918 because at that time we were
actively engaged in war, every influence of patriotism supported the
Railroad Administration, and the organization was held at concert
pitch by the critical military needs. The unfavorable results in 1919
may be attributed in greater part to the pronounced reaction from
war-time strain, to the serious decline in traffic, and to the
disintegration of the organization in a too prolonged closing period.
No one should question the expediency of the Government's action in
taking the railroads in the emergency. The centralization of power and
the more effective coordination with other branches of the Government
in the crisis made possible effective results in the utilization of
equipment and facilities, which would have been much more difficult
under private management. But it is not proper to treat that period as
the test of what might be expected under normal conditions. As regards
the unfavorable year, 1919, it would be as unfair to make that a test
of government operation as it would be to take the present period of
subnormal traffic and disturbed economic conditions as the final test
of private management.
Those who advocate nationalization and look upon the results of both
years as favorable to government operation must concede that they are
to be credited to railroad men who rose to the emergency. The
proponents of nationalization who are disappointed in the results of
the two years attribute the failures to the fact that the real
management during the greater part of Federal control was in the hands
of men who were brought up under private management and who therefore
could not or would not avail themselves of the advantages of
unification.
It is plain therefore that nothing definite can be proved from the
results of 1918-19. A real test of government operation is possible
only if carried on over a longer period--one in which business
conditions are normal and in which political expediency would have
normal play. The period under review was so abnormal that the results
are valueless as guides to what might be expected from similar control
or complete government ownership when normal conditions return.
I do not agree entirely with Professor Cunningham. I am not a "government
ownership (or operation) man," but I feel that the experiment of the
United States Railroad Administration, despite the tremendously difficult
conditions under which it was operated, and also despite the fact that it
was made at a very inopportune and inappropriate time, did have much real
value. Unquestionably the time set for the experiment was far too short.
Both Mr. McAdoo and Mr. Hines went on public record as saying that there
be at least five years of peace to show their plan at its full worth.
But even in twenty-six brief and hectic months many things were developed
that should be, that must be eventually, of great value to the present
private operators of our railroads. Of many of these things as well as the
possibilities for their development, this book will have to tell. The
Railroad Administration at least pointed the way to them. In view of that,
shall we not be broad enough to overlook its errors and its mistakes, and
yet call it a real advance toward the solution of a national problem that
advances sluggishly to that end?