Inasmuch as “no man can serve two masters,” and the efficient operation of the railroads for winning the war and the serviceto the public is the purpose of Federal control, it was manifestly wise to release the presidents and other officers of the railroad companies, with whose corporate interest they are properly concerned, from all responsibility for the operation of their properties.... All ambiguity of obligation is thus avoided. Officers of the corporation are left free to protect the interests of their owners, stockholders, and creditors, and the regional and operating managers have a direct and undivided responsibility and allegiance to the United States Railroad Administration.
Inasmuch as “no man can serve two masters,” and the efficient operation of the railroads for winning the war and the serviceto the public is the purpose of Federal control, it was manifestly wise to release the presidents and other officers of the railroad companies, with whose corporate interest they are properly concerned, from all responsibility for the operation of their properties.... All ambiguity of obligation is thus avoided. Officers of the corporation are left free to protect the interests of their owners, stockholders, and creditors, and the regional and operating managers have a direct and undivided responsibility and allegiance to the United States Railroad Administration.
He then went ahead in accordance with this announced policy and appointed Federal managers for the larger roads, incorporating into their direction smaller lines, closely affiliated or connected with them. But in almost every case the president of the railroad became its Federal manager, invariably at a lower salary than the private corporations had paid. Mr. Harrison, Mr. Willard, Mr. Rea, Mr. Kruttschnitt, and Mr. Underwood (of the Erie) were extremely conspicuous exceptions to this rule.
I am setting down these intensely personal episodes in the conduct of the Railroad Administration under its first director-general solely for one purpose—they have had a very large bearing on the present-day plight of our railroads of the United States. The bitternesses that were then engendered have not ceased. I do not feel that Mr. Harrison or Mr. Willard or Mr. Rea, to-day restored to their old positions and influence, now harbors a single grievance against Mr. McAdoo because of them. The damage that he did has all been done, in the thrust against the morale of the rank and file of our American railroad organization. McAdoo talking to the men from the rear end of his own private-car at Pueblo and at El Paso and telling them that at last they were come into their own rights did not begin to do the damage that the whispered rumors, running here and there and everywhere, of what the director-general was doing to the former big bosses of great railwaysdid to our old-time traditions of railroad respect and discipline.
In giving labor a seat in his cabinet McAdoo did a big thing. In making speeches such as those at Pueblo and at El Paso he did a far smaller thing, to put the matter very lightly indeed. In the innuendo of his attitude toward a group of important railroad presidents a very great wrong was done unquestionably.
The functions of the director-general’s cabinet were national. In addition to its members the steersman of the craft chose regional directors, at first (and with but a few changes thereafter) as follows: for the extremely congested lines north of the Ohio and east of the Mississippi, A. H. Smith, president of the New York Central; for the lines of the Southeast, as we have just seen, C. H. Markham, president of the Illinois Central; and for those of the rest of the country, R. H. Aishton, president of the Chicago and Northwestern. Later Mr. Aishton’s huge territory was subdivided and three sub-regions made of it. In a similar fashion New England also was made a sub-region, and James H. Hustis, the very popular president of the Boston and Maine, placed in charge of it, after him came Percy R. Todd of the Bangor and Aroostook, an executive equally experienced in New England railroading.
Mr. Smith was the very first of these men to be chosen. He received a telephone request to come to Washington one day late in December, 1917. Boarding a midnight train, he was in McAdoo’s office the next day. The director-general of the railroads notified him that he had been drafted to work out the fearfully congested situation in the Northeast. Without a word of comment Smith turned on his heel, walked to a desk in the corner of the room, and, picking up a block of paper, began inditing detailed telegraphic instructions to the presidents of the roads in his new jurisdiction as to their part in the great drama of national control whose opening scene was so close at hand. A little later he returned to New York. And at noon on December 28, 1917, the exact time set by President Wilson for the curtain to rise on government operation of thecontinental railroad system, Mr. Smith stood in his window on an upper floor of the Grand Central Terminal, and, looking down at the maze of tracks below him, trains coming, trains going, began the dictation of a short statement as to the history, the size, and the strength of the property he headed.
“I want it to go into the record,” said Smith. “The opportunity might not come again.”
He turned immediately to the work in hand. There was plenty of it to be done. The great city around about the terminal was on the edge of panic. There was a fuel famine and no promise of relief. New York at last was paying the penalty of her medieval, not to say archaic, system of distribution. At last the war was very real and very close at hand. They were saying that many of the schools would have to close, that there was a possibility the theaters would have to shut down each Monday night. Poor New York! She did not then know that the worst was yet to come!
All this occurred with 300,000 tons of coal upon the Jersey side of the Hudson River opposite the city, while in the midst of a winter of almost unprecedented bitterness an ancient lighterage system struggled with ice hardly less thick than that which once sufficed for a footpath for Henry Ward Beecher from New York to Brooklyn, and could bring less than 30,000 tons of coal a day across the river. Nor was this all—no, not even a reference now to the freight upon the Jersey meadows. Know now that the greater part of that accumulated 300,000 tons of coal was in cars and that production at the mines actually was being slowed down by the delay in the return of these cars.
“Open the Pennsylvania tubes to the coal trains!” shrieked the radicals of Manhattan. “Give us fuel trains and food trains instead of Florida Limiteds! Put them through at the rate of fifty, one hundred, one hundred and fifty a day, if needful!”
Some of these lost their heads. Smith did not lose his. Neither did he impose any more humiliation upon the head ofhis great competitor. He does not do business that way. Instead he gave careful heed to the terminal possibilities of the Pennsylvania, the traditional and very real rival of the road he himself headed.
“We may possibly make a freight use of the tubes,” he said quietly, “but it will be a moderate use. I shall limit the length of the trains to thirty-six or thirty-seven cars, which really is no train at all. For I do not want to see one of those fifty-ton battle-ship coal gondolas jumping the track in a tube which was not designed for it, and so completely blocking the line. I am going to be in a position to hand the terminal back to the Pennsylvania in quite as good condition as I found it.”
Then he made further explanations. After all the Pennsylvania tubes, thrusting themselves across the island of Manhattan, are even in an emergency of little or no freight use to it. They are too deep to be of freight service to the heart of metropolitan New York. To Brooklyn, with a population almost equal to that of Manhattan, to Queens, and to the Bronx they eventually were made of some slight service.
This was not the big part of Smith’s job, however. He made a quick survey of the entire situation in his big district; trains and cars cluttered here and there and everywhere. For the final thirty days of private operation the situation steadily had been growing worse. In the districts roundabout Pittsburg and Philadelphia and New York it had become intolerable. Take, if you will, the industries in those vast manufacturing districts and consider them multiplied tenfold, their influx of fuel and of raw material increased in like proportion, and so with their output. Add these industries one to another and see them in units of tens of dozens of trains, of hundreds and thousands of coal-cars and flat-cars and box-cars. And on the other hand, see all of these poured upon railroads that had been steadily growing weaker for eight or ten years—more rapidly weakened, however, in the last four months than in the entire three years that preceded them. Bear in mind their tremendous loss of man-power through the draft, consider thegradual wearing down of engines and cars and tracks and terminals toward the breaking point, and wonder not then that we had congestion and much worse east of the Mississippi and north of the Ohio.
Throughout that autumn of 1917 we watched the bending of the rod of the railroad just as we had watched it bend and then recover again through the two hard winter seasons that have preceded this one. It bent further this winter than ever before—the traffic was so much greater, and the facilities with which to meet it so much weaker. No wonder that freight moved slowly, more slowly, most slowly, and in many cases finally ceased to move at all; that upon the Jersey meadows outside of New York were 30,000 car-loads of merchandise that could not be moved up to that port and to the ships waiting to carry it overseas. At one time 150 ships stood waiting for coal alone in New York Harbor. And overseas was a great war in its critical stages. No wonder, though, that coal began coming in dribblings to hearthstones that were whining for tons of it, that finally it ceased coming at all for whole days, while great and ordinarily comfortable American cities shivered and watched their death rates mount higher than they had mounted in many a year.
It was a man-sized job that confronted A. H. Smith. Like a real railroad man he handled it. He went in at once upon it. He began to do things. He issued immediate embargoes against shipment into the New York district of anything save food, news-print paper, live stock, perishable freight, and freight consigned to the Government. He did more. With a great map of metropolitan New York and its railroad terminals spread before him he began ordering freight concentrated west of Buffalo and Pittsburg and south of Washington into the trunk-lines which variously best serve the great group of cities that constitute the metropolitan district of New York. The Baltimore and Ohio for instance has exclusive terminal facilities upon Staten Island, which with its many shipyards and wharves is an important freight consignment point.In ordinary times, when the situation was dominated by competitive conditions, a car-load of freight offered the New York Central at Toledo or Detroit would be carried on its lines to New York and then floated to Staten Island by car-ferry. In this non-competitive war situation, in this hour when the temporary continental railroad system of the United States was being born, such a car would be taken by the New York Central from Toledo or Detroit to the Baltimore and Ohio at some point west of Pittsburg, and then over it to Staten Island by the shortest possible route.
What Smith was doing in New York his fellow regional directors in Atlanta and in Chicago also were doing. Order was being worked out of chaos. The great railroads of the United States, even temporarily and very hastily welded into a single national system, showed good results of efficiency and economy, just as some of their far-sighted private operators had predicted more than two decades ago. Released from the shackles of the Sherman Anti-Trust Law—Congress had refused such a release to the Railroad War Board but quickly granted it to McAdoo—and from the conflicting regulatory commissions all the way across the land, they were able to simplify and unify their facilities—even though many times at public cost and inconvenience—in a way that enabled them not only to handle the pressure of war traffic and in an admirable fashion but also to show great economies upon their cost-sheets.
To come to actual cases: It was good railroading when the centralized Washington administration began assembling various sections of various lines so as to gain not only more direct routes between important traffic centers but lines of lowest possible gradients as well. In the West particularly, great progress was made in this direction. For instance in the old days of competitive railroading the Southern Pacific quite naturally operated its through route from Dallas or Fort Worth to Los Angeles and San Francisco over its own tracks through San Antonio or El Paso. Of course the old-time and somewhatunfortunate Texas and Pacific had a far shorter route from Dallas and Fort Worth direct to El Paso, but the competitive situation, the fact that it was the Texas and Pacific and not the Southern Pacific, prevented it from getting much volume of traffic for its short line. Under government unification the T. & P. line came into its own, with the result that 500 miles were taken off the through route between the important North Texas cities and southern California—with great resultant time and operating economies.
Similarly, there arose a war-time assembled through line from the oil-fields at Casper, Wyoming, to Montana and Puget Sound points, 880 miles shorter than the route which the competitive situation formerly forced. Freight from southern California to Ogden was hauled 201 miles less than by the pathway formerly used; while the Railroad Administration route between Chicago and Sioux City was 110 miles shorter than the old, and 289 miles were saved in the through traffic between Kansas City and Galveston and Houston. Multiply these examples and it is easy to see how in a period of sixty days in the summer of 1918 nine thousand freight-cars were so rerouted as to effect a saving in mileage traveled by each car of about 195 miles, or a total saving of about 1,754,805 car-miles.
To be ranked with this sort of operating economy was the work undertaken by Regional Director R. H. Aishton at Chicago when early in the spring of 1918 he began consolidating train movements so that instead of the several competing trunk-lines coming down from out of the Northwest, each operating competing through freight-trains each day into the great terminal and interchange yards at St. Paul, and there shifting and resorting their cars incredibly for distribution between the six trunk-lines leading for another five hundred miles down into Chicago, through trains were operated solidly from the Puget Sound points through to Lake Michigan. For through freight the great railroad yards upon the line between St. Paul and Minneapolis represented no more of a stop thanwas necessary for changing engines, cabooses, and crews. Moreover these through trains were distributed in alternation between the Northern Pacific and Great Northern lines from the Pacific coast down to the Twin Cities, but because of its superior mileage and gradient conditions they were handled on to Chicago almost exclusively by the Northwestern.
Nor was Chicago—with almost inevitable traffic congestion, despite the fact that it now bears upon its western rim the largest interchange and clearing-house yard for freight-cars in the entire world—a railroad point big enough to break this simple scheme of through service. Take the export corn specials out of the Missouri valley. One of these trains, let us say, consisted of thirty-one cars from Omaha and five cars from Sioux City, all moving under special government permits, and was routed intact from Omaha to Philadelphia. It came east over the Northwestern to a point well outside of the Chicago congested district. There it was turned to the tracks of the Elgin, Joliet, and Eastern, one of the outermost of the belt-line railroads which encircle Chicago. The Elgin, Joliet, and Eastern in turn delivered the train—intact and unchanged, you will remember—to the Nickel Plate, which at Buffalo handed it to the Lackawanna, which in turn carried it as far as Scranton, giving it there to the Central Railroad of New Jersey and the connecting Philadelphia and Reading for prompt handling through to tide-water and a waiting ship at Philadelphia. There was no switching and but little delay en route, and the train generally went through from the Missouri to the Delaware in considerably less than a week. Such a prompt through movement, with its saving of time and money, was quite unheard of in the days of competitive railroad management.
All the reroutings and consolidations of this sort by no means had been confined to the western portions of the land. In the East many others were made, particularly in the congested sections of war-munitions manufacture, where, in addition to great numbers of war brides and shipyards and camps andcantonments, requiring not merely outbound shipping facilities but large quantities of raw materials and fuel, there had been a vast movement of coal for both domestic use and export. In the handling of this coal ingenious savings were made, both in the routings and in the details of train operation. Roads and portions of roads, formerly in bitter competition, were joined together in a way only possible under absolutely unified and autocratic control. And in some cases the routings were so made as to divert the great streams of through freight traffic, in order to avoid areas already badly congested. Thus Atlantic-bound freight coming up into St. Louis from the Southwest was sent far to the north and even through Canada before it reached the seaboard. A glance at the map and a fair understanding of the present traffic situation will show the necessity of this. The lines that reach into the coal-fields of eastern Kentucky and West Virginia and western Pennsylvania were much burdened these months. It hardly was fair to ask them to carry much through freight upon their already heavily laden shoulders. And the Pittsburg district, with its various narrowimpassesmade by broad rivers and sharp-sided mountains, is a railroad abomination—a fearfully congested traffic gateway which, by reason of those selfsame rivers and mountains, is hardly capable of radical enlargement, even at great cost.
The railroads that run along the south shore of Lake Erie, ample as are their facilities, already had a full load of traffic from Chicago, the West, and the Northwest. So the traffic from St. Louis and the rich country back of it must needs cross the Chicago currents and go to the north of Lake Erie. The Wabash—one of the least understood and most abused railroads in America—in those days first began really to justify the fine strategy of its position. It became the main factor in bringing St. Louis freight up to Detroit, where it no longer crossed into Canada by ferry but through the great tunnel which the Michigan Central completed about twelve or fourteen years ago; and by sweeping easily along through thegradeless tangents of the Province of Ontario that freight re-entered the United States at the Niagara frontier, and so on to New York or Boston by any one of a half a dozen uncongested traffic routes.
These things apparently could not have been done under private management; at any rate they were not done under private management, although it is but fair to say that some of the far-sighted railroaders who sat at the table of the former Railroad War Board—which had attempted at the eleventh hour to consolidate the lines and so save the obvious perils of government operation, even as a temporary war measure—had the vision of these very consolidation economies. They had the vision but not the power. Too many powerful considerations bore in upon them and bore them down. Regulation, which was not fair regulation, the inability to finance the lines with rates fixed and expenses increasing by leaps and by bounds, competition refusing to bury itself even in emergency, even traditional jealousy—all these things prevented the Railroad War Board, constituted by the roads themselves to have a sort of supreme authority, from accomplishing its real purpose. These things were accomplished by the United States Railroad Administration and William G. McAdoo, as director-general of railroads, almost at the very beginning.
I have set down these operating details of the United States Railroad Administration under its first director-general at some length, not because of any desire to glorify Mr. McAdoo but because I may want to refer to them again in the final chapters of this book when I am endeavoring to show the folly and the waste of many of the phases of our competitive system of railroading in the United States. Failure as it was in many ways, the McAdoo episode was perhaps valuable after all as a laboratory experiment in rail transport. I am not sure but that as such it was worth every cent that it cost; and its cost was not small. For some years past, before the coming of the war, a certain proportion of our railroaders had been gettinginto something of a rut, to put it lightly. McAdoo came along and, if he did nothing else, succeeded in shaking them well out of that rut. Yet it is but fair to recall again that the Railroad War Board might have done the same thing had it possessed two great powers that the United States Railroad Administration possessed—absolute authority and virtually unlimited financial resources. McAdoo, on the one hand, might order new locomotives by the hundreds and box-cars by the thousands—no matter what the price, we were at war—and upon the other, he could—and did—raise the railroad tariffs, both freight and passenger, to a point hitherto deemed virtually prohibitive. He raised the rates all the way from 25 to 35 per cent., and the railroads but two or three years before had found the Interstate Commerce Commission deaf to their appeals for mere 5 and 10 per cent. advances.
THE UNITED STATES RAILROAD ADMINISTRATION (CONTINUED)
I bearno 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 inthe 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 Fé 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 andregulation. 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 eachdirection 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 hadbeen 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 everycompetitive 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 Fé 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 Fé, 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 Fé, 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 fairlyclose 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 essentialtravel 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 asmany 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 thenational 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 knewof 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 ElPaso, 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 hiswage. 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 heceased 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 Fé 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 sizableproblem 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 experimentwas a success. In a recent issue of the “Quarterly Journal of Economics” he says: