lest you accuse me of forgetting that you long ago graduated from the
kindergarten. So you did; but when in doubt get back to early methods.
After reading recently an article on scientific management, I had to
recall my catechism to feel certain that handling pig iron is not the
chief end of man. We all, you and I included, sometimes show up smaller
than we really are, because we seem to think only in the narrow terms
of the things to which we are closest. It once fell to the lot of a
young official to escort over his road some of its directors, bankers
from New York. Being an enthusiast for his section of country, being an
operating man with an instinct for developing traffic, he talked of
progress, of the economic and social welfare of the people. When he
spoke of sugar planting, or of cotton growing, of blooded stock and
dairy yield, the bankers asked, "How much does it cost to raise an
acre?" or "What percentage of profit do they make?" He returned from
the trip feeling that money must be their god, that his directors could
think only in terms of dollars and cents. It dampened his ardor for a
time. Then he was so fortunate as to ride for a few days with some of
the really big modern bankers. He found himself listening with open
mouth to their expression of practical sociological truths. He marveled
at their recognition of the human element, and he understood better why
the board sometimes turned down his recommendations. His only lament
was that he could not see more of them. There, my boy, is the great
misfortune, there is a problem to be solved. There is too much Boston,
New York, Philadelphia and Chicago. The directors seem too far away. It
is a step forward that the overlords of transportation are bankers who
have won their way rather than hereditary descendants of once reigning
families. Some method must be evolved to make for more elastic control.
Annual inspection trips will not overcome that rigidity in
administration at which the public chafes and from which it seeks
relief in drastic laws. An interesting and hopeful phase of present
development is the election to directorates of trained railway
executives like L. F. Loree and H. I. Miller. The professionally
equipped railway director is a desirable evolution. Supply always
follows demand, and the broad solution will be a composite made up of
many elements of progress which perhaps have not yet unfolded
themselves to any of us.
It is a great game, this transportation business. The more you study
it, however, the more you discover that it is amenable to the same
underlying principles on which rest the great and small activities of
the human race. Like all professions, it has its distinct technique.
Like all professions, it suffers from the inborn tendency of human
nature to segregate itself behind an exaggerated class consciousness.
"We are a little different," or "You do not quite understand
our peculiar local conditions," are the arguments with which
ultra-conservatism has opposed progress in all ages, are the
obstacles which make so interesting all real contests for principle.
I make no apologies for taking you in this letter from the witness
stand of the west to the financial chancelleries of the east. When both
the banker director and the general manager learn that signatures on
letters and tram orders must be as sacred as when signed to bank
checks, we shall be winning back a little of that old-time sense of
personal responsibility which is so needed for improving composite
efficiency to-day. What better epitaph could any man desire than this,
"He helped to teach corporations to remember that lasting composite
strength comes only from intelligent recognition of individual
manhood?"
Affectionately, your own,
D. A. D.
LETTER V.
LIMITATIONS OF THE CHIEF CLERK SYSTEM.
Tucson, Arizona, May 6, 1911.
My Dear Boy:--I have had a good deal to say to you at one time and
another about chief clerks and the chief clerk system. From actual
experience as a chief clerk I know that it is a trying position. It is
because the railway chief clerks of the country are as a class such a
splendid body of men that I am trying to do what I can to help them.
Too many times a chief clerk misses promotion because he is such a
valuable man that he has to stand still to break in all the new bosses
who come along and leave him in the side track.
The chief clerk system as we know it to-day cannot long survive because
it is too feudal in conception to reflect the spirit of a progressive
age. We need a chief clerk to be a head clerk, a senior clerk, a
foreman of the office forces, as it were. Much of the time on American
railroads the chief clerk is in effect an acting official, acting
trainmaster, acting superintendent, acting general manager, acting
vice-president, and even acting president. As such he signs the name of
his boss, the theory being that the latter, like a feudal baron or a
king, is omnipresent within his own dominions. Not only does this
outgrown conception violate the fundamental laws of matter; it often
borders upon a breach of honor, integrity and good faith. Legal
fictions are fast giving place to the law of common sense. Railway
officials should not risk arraignment before the bar of public opinion
for such indefensible practices.
When the chief clerk does business in the name of some one else the
effect is dwarfing to all concerned. We do not get the effect of either
one or two men, but that of a fraction of both. Again, the chief clerk
is handling important correspondence with officials below of higher
rank than himself, of greater compensation, and presumably of wider
experience. Human nature is such that sooner or later the chief clerk,
a junior, is telling an official, a senior, where to head in. Among the
hundreds of railroad officials with whom it is my proud privilege to
claim acquaintance, I have found nearly every one flattering himself,
"My chief clerk never makes such breaks." To avoid awkward and
embarrassing silences, I am learning to discontinue the acid test, "How
about your boss's chief clerk?" So widespread a belief indicates a
generic trait of human nature rather than a sporadic condition.
Organization as a science seeks by proper checks and balances to
minimize such amiable failings of human nature. Organized society
preserves the effectiveness and dignity of its courts by allowing only
a duly qualified judge to administer justice. The old clerk of the
court may really know more law than the young judge, but only the
latter can sit on the bench and decide causes. The lay reader must be
duly ordained before exercising the full functions of a minister. The
man who uses another's autograph signature in the banking business
becomes a malefactor. Are we so different in the large corporations
that we can with impunity ignore such safeguards?
The chief clerk system had its origin when railways were small and
officials were few. On a division, for example, the superintendent was
perhaps the only official and by common acceptance his clerk was really
the next in rank. When a small tradesman or a small farmer goes away
for a day his wife and boy may do the work without any one knowing the
difference. In a larger enterprise there has to be an understudy in
charge when the head is away.
You may have noticed that I use the word "rank" considerably. Rank
is a practical necessity for the proper enforcement of authority.
Rank makes its appearance as soon as society organizes for its own
protection. Rank may be local, limited, changing and temporary as
contra-distinguished from general, extensive, hereditary, or permanent,
but it is rank just the same. The purest democracies clothe their
chosen leaders with temporary rank. Before misconstruing the poetic
aphorism of Robert Burns, "rank is but the guinea's stamp," remember
that the guinea is only fluctuating bullion until the stamp of
authority of government can be invoked.
Let me now enunciate a principle, which is this: "In modern
organization the chief clerk as we now know him has no place. When
the stage is reached that such a chief clerk seems to be needed,
there should be another assistant this or that." Mind you, I do not
say assistant _to_, because that little word "to" may give a
sent-for-and-couldn't-come appearance. Nearly every week you notice the
announcement of the appointment of an old chief clerk to the position
of assistant _to_ somebody. This is encouraging, since it permits him
to do business in his own name. It also shows that railway officials
are waking up to the distinct limitations of the chief clerk system.
The discouraging feature is the failure to profit by centuries of
experience of such well-handled activities as the Navy and the merchant
marine. At sea the executive officer ranks next below the captain and
is in effect, though not in name, the latter's chief of staff. The
captain's clerk or the purser cannot hope to become executive officer
and then captain without getting outside and working up through the
deck. When railway executives and directors become better students of
organization, the science of human nature, their stockholders will pay
for fewer unnecessary experiments. One railway profits by the
discoveries and mistakes of another, as to bridges and equipment, but
rarely as to organization and methods.
The United States Army, copied largely from the English, has the
assistant _to_ system, calling such officer the adjutant. The rank
of the adjutant has been raised to captain, or rather the grade from
which the colonel can select his adjutant has been elevated to that of
captain. The adjutant has thus gained, and many military men hope that
he will eventually be the lieutenant-colonel, and as in the Navy, be
the executive officer, and, in effect, chief of staff for the colonel.
Since no officer of the Army or Navy permits another to sign his name
the adjutant uses his own autograph signature, but preceded by the
phrase, "By order of Colonel Blank"; objectionable because it is
sometimes a legal fiction. The adjutant system in the army works better
than the assistant _to_ system on the railroads, because the adjutant
is relatively better trained for his position. Not only does the
adjutant know office work, but he has learned practically to perform
every duty required of non-commissioned officers and private soldiers.
Very few assistants _to_ could run a train, switch cars, handle a
locomotive, or pick up a wreck. This is why soldiers and sailors have
more faith in the ability of their officers than railway employes have
in that of their officials. He who would be called Thor must first
wield Thor's battle axe. We should office from the railroad rather than
railroad from the office.
Since these things are so, as runs the old Latin phrase, I would
recruit my office assistant from the road, from the head of a so-called
department, from an official who has gained a face-to-face experience
in handling men. The old chief clerk is the first man I would consider
for appointment as one of my junior assistants. I would so assign him
that he would get outside experience. Sunburn and redness of blood
sometimes go together. For the pink tea contact of the telephone, for
the absent treatment of the typewriter, I would ask him for a while to
substitute the strong coffee of the caboose and the surprise test of
the through freight. Office railroading has its origin in the mistaken
theory of overspecialization, that office work is a highly-segregated
specialty beyond the ken of the average man. The world advances, and as
education becomes more general, as tenure is made more permanent, and
employment more attractive, we can impose increased requirements.
Suppose that it all could be so worked out that a generation hence no
man would expect to be a railroad clerk until he had served some such
outside apprenticeship as trackman, brakeman, switchman, or fireman,
etc. This would mean that in an organization like the post office
department every clerk in the department in Washington would have been
graduated from some such outside position as letter carrier, railway
mail clerk, country postmaster, rural free delivery carrier, etc. Every
clerk in the war department would be a soldier and every clerk in the
navy department a sailor. Then the papers that the clerk handled would
have a living meaning for him. His action would be more intelligent.
Pardon me a moment while I shake hands with the highly-conventional
gentleman who is approaching--Mr. Cant B. Dunn. No introduction is
necessary. We have met all over the United States, in Canada and in
Mexico. We usually differ, but never quarrel, because each is so
necessary to the other.
Sure, my boy, all these things can't be done right away quick, or
before the Interstate Commerce Commission again asks for increased
authority and larger appropriations. I do not expect to live to see the
consummation, but hope that you may. I do expect to survive long enough
to see a good start made along such rational lines of elasticity.
Because we cannot accomplish it all at once is no reason for not making
an intelligent beginning. If a compromise with principle is ever
advanced its advocates should be prepared to pay the ultimate cost.
Those questions on which the Federal Constitution compromised required
the expensive settlement of civil war. Otherwise the Constitution has
been elastic enough to cover nearly fifty states as fully as the
original thirteen. It is even strong enough to withstand the latest
political fallacy, the recall of the judiciary, as solemnly proposed
out here in fascinating Arizona.
Remember always, my boy, that although the good old days have completed
their runs, there are better days arriving and still on the road; that
from beyond the terminal at the vanishing point of the perspective the
best days are coming special because no railway time-table is big
enough to give them running rights.
Affectionately, your own,
D. A. D.
LETTER VI.
PREVENTING INSTEAD OF PAYING CLAIMS.
Phoenix, Arizona, May 13, 1911.
My Dear Boy:--You ask me to give you my views on the handling and
settling of freight claims.
I restrain my impatience and consequent desire to jump on you hard.
Allow me, therefore, with expressions of distinguished consideration,
to invite your esteemed attention to the fact that your valued request
contains no mention of an intelligent desire for possible enlightenment
on the most important feature of the problem, namely, the prevention of
claims, the eradication of causes.
A railroad is a complex proposition. Seldom can we discuss one of its
problems independently. So ramified are its activities that the
penumbra of one shadow coincides with the outline of the next. Studied
from the broadest view of railway administration, freight claims are
found too often doing duty as a shadow which hides the real substance,
poor operation. It was formerly the almost universal practice on
American railways for freight claims to be handled and settled by the
freight traffic department. It was felt that the man who secured the
business, who dealt with the shippers, was the man to placate the
claiming public. No, this did not always lead to rebating. It placed
before the man hungry for gross revenue a temptation which he often
resisted. Since the passage of the Hepburn act and the consequent
inspection of claim disbursements by the Interstate Commerce
Commission, the general trend of railroad practice has been to place
the so-called freight claim department under the accounting department.
Railroads are waking up to the fact that the new order of things means
more than an accounting proposition; that in government regulation and
supervision the whole matter of railway administration is involved.
What we technically term "operation" is the largest of the component
elements of administration.
The tendency of overspecialization has been to leave to the accounting
or the legal department the matter of relations with the various
branches of government, both state and federal. Since a part can never
equal the whole the results have been disappointing. Railroads are
learning by costly experience that traffic men and operating men must
have an active part in these vital relations. Government in the long
run reflects the spirit of its people. The American people as a nation
are positive and constructive. The training of railway lawyers and
railway accountants is often negative and resisting. The general
counsel and the general auditor are inclined to tell us what we can not
do. The traffic manager and the general manager, on the other hand,
tell us what we can do. Out of it all should come a well-balanced
administrative machine. We need the whole machine, not a specialized
part, the positive as well as the negative elements, when we move
alongside the reciprocating engine of government.
Again, putting a man in the accounting department does not make him any
more honest than the rest of us. There is more logic in taking freight
claims away from the traffic department than there is in placing them
under the accounting department. The traffic man, the accounting man,
or the legal man can settle or refuse a claim. None of these can
eradicate its cause. Only the operating man can do this. Many roads
cling to the belief that their wonderful interior combustion and hot
air harmony give the operating department sufficient information to
serve the practical purpose. My observation has been that this
information is not sufficiently fresh; that it trails along too far
behind the actual transaction. Some roads, like the Southern and the
'Frisco, have organized special bureaus in the operating department to
minimize the causes of freight claims and to follow up discrepancies
while the case is fresh; in other words, to investigate before the
claim is filed. Sometimes this duplicates the work of the freight claim
office and sometimes it does not.
So bad have been freight loss and damage conditions on most American
railroads that almost any kind of attention has resulted in
improvement. Nearly every road can cite figures in defense of its
particular treatment of the situation. There are many good ways. In the
absence of an absolute unit of comparison the best way must be largely
a matter of opinion. To me the logical and practical principle has been
discovered by two of the best managed railroads in the country, the
Chicago & North-Western and the Chesapeake & Ohio. These roads, among
others, place their freight claims under the operating department, thus
reserving the hair of the dog for treatment of its bite. With such a
system the general manager controls the disbursements to operating
expenses for which he is responsible. Under other systems the general
manager accepts charges which he does not directly control. Some roads
have endeavored to correct this last defect by requiring claim vouchers
to be signed by the general manager and the division superintendent.
This beautiful example of circumlocution is expensive. There are only
twenty-four hours in a day, and even claim papers can not be handled
for nothing. Furthermore, the claimant himself refuses to see the
beauty of delaying payment to carry out a theory. In some states he has
secured legislation penalizing railways for delay in settling
intrastate claims. Can you blame him? The claimant aforesaid may happen
to be a country merchant waiting for the way freight to come in. It
brings him six boxes of groceries. In his presence, and that of the
agent, the way freight brakeman drops and spoils a box. On many roads,
not only is the agent not allowed to pay for this spoiled box, but is
expected to require the indignant consignee to pay the freight on all
six boxes before removing the other five. The consignee is told to file
a claim, which then makes its weary round through the circumlocution
office where clerks are called investigators. Such companies say in
effect to the agent: "Yes, you are a good fellow; you get us a lot of
business; you handle thousands of dollars of our money; you represent
us in many things; you must understand, however, that a freight claim
is a specialty requiring expert advice; a bad precedent might involve
us in the future; you know, too, we might be criticised as opening the
way to grafting by some other agents if we let you pay out money
without authority from the accounting department; yes, we like your
work and expect to promote you in the sweet by-and-by," etc., _ad
nauseam_. Fortunately, these narrow views are giving place to more
enlightened practices. On several railways in Texas most station agents
are authorized to settle instanter certain classes of palpably just
claims up to $20 or $25.
Among the practical advantages of claim control by the operating
department are quicker recognition of lax methods causing claims,
better discipline and morals of train and station forces, prompter
settlement, and greater attention to seal records. The Chesapeake &
Ohio makes surprise tests by breaking a seal and resealing the car with
a different seal to see if the next man copies the last record, or
actually takes his seal record from the car. This road also appeals to
the human element. Claims settled are tentatively charged to the
conductor or agent apparently at fault, and he is given an opportunity
to explain. This is not real money, but a combination of Brown system,
Christian Science coin, and 1907 clearing house certificates. The
practical effect is very real, however. Each man learns to feel a
responsibility which is reflected in a desire for a clean record. The
general claim agent, who is under the general manager, sends monthly to
each division superintendent a list showing the name of every freight
conductor on the division, with number of claims, if any, charged to
him on account of pilferage from train, rough handling, etc. The local
divisions of the Order of Railway Conductors have been interested and
feel some responsibility in keeping the work of their members upon a
plane above the imputation of collusion with pilferage. Seek, my boy,
to develop the higher natures of your men and you will be astonished at
the response. Let them know that you know what they are doing, and it
becomes easier for them to withstand temptation.
Freight claims are a fine example of an exaggerated specialty resulting
in unnecessary centralization. The whole proposition can be
decentralized for the good of the service. Because the division
superintendent can not well settle interline claims of other divisions
is no reason why his forces should not settle such local claims as
concern his division.
A thorough study of freight claims will bring you early to a
consideration of personal injury, stock and fire claims. The fad has
been on many railroads to take these items of operating expenses away
from their former location in the operating department and give them to
the legal department. This exaggerated view of the laws of liability is
partly responsible for the growth of the damage suit industry. It is
another case of considering a part of the railway at the expense of the
whole. We need legal advice and expert knowledge. The true function of
the expert and the specialist is to see how much working knowledge he
can impart to the layman for everyday use and reserve himself for the
real complications which, if his tutelage has been sound, the layman
will quickly recognize and bring back for expert assistance.
Not long ago I happened near a freight wreck. One of the cars in the
ditch contained an emigrant outfit in charge of a man. This man was
bruised, but not seriously injured. With the superintendent and the
wreck train came a specialist, a claim adjuster for the legal
department. He could settle only the personal injury. The damage to
property was a freight claim and belonged to another department, the
accounting, not formally represented at the impromptu function, and
over which the superintendent as master of ceremonies had no
jurisdiction. The various items of operating expenses involved on this
occasion were in a decidedly diverged condition. What the spiritualist
medium calls the control was in this case the office of a busy
president some fifteen hundred miles away. Of course, the company
spirit and common sense guided the superintendent, and he made the best
of circumstances; perhaps risking criticism and censure for crossing
sacred departmental lines. What do you think of a system that breaks
down in emergencies? Is not an emergency a test of a system, a proof
of its elasticity? Can we develop the highest efficiency of
superintendents when we, the executive and general officers, place upon
them the burden of departing from a system that fails to meet their
practical problems? Is it not a species of unconscious administrative
cowardice for boards of directors to impose implied and practical
responsibility without conferring corresponding authority? Can such
questions be ignored as exceptional, trifling, and captious? Do they
not reach to the heart of railway organization and efficiency? Will the
railways correct such errors themselves, or will they await once more
the remedy by legislatures and commissions?
If a study of conditions does not convince you theoretically that one
claim bureau should handle freight, stock, fire, and personal injury
claims--in short all claims covering injuries to persons and damages to
property--go down on the Chesapeake & Ohio and watch them do it
practically. Instead of several specialists duplicating each other's
itineraries, you will find some all-round claim men doing a variety of
practical stunts. When they do strike a really different and highly
technical case, they utilize the services of their best specialist in
that particular line, not infrequently the general claim agent himself.
Overcharge claims are very properly handled under their traffic
auditor, being a matter of correction and not of operating
disbursement. Were it up to me, I would make the general claim agent an
assistant general manager, so that in claim matters he would have rank
and authority superior to the division superintendent's. The division
claim agent I would make an assistant superintendent, so that in claim
matters he would have rank and authority superior to all employes on
the division.