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 coördination 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 whichbusiness 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.
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 coördination 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 whichbusiness 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?
THE RETURN OF PRIVATE OPERATION
Beforethe roads could be actually handed back to their owners for operation once more, it was highly necessary of course that a definite plan be formulated, not only for the method of transfer but for the protection of the roads against the deficit that was piling up steadily against them. Congress, which hates to be definite about anything, wrestled with the problem through dreary and seemingly endless weeks, and then in the last few days—nay, even hours—before the date set for the return of the properties—March 1, 1920—passed the hastily constructed and far from satisfactory Transportation Act, which speedily went to President Wilson at the White House and there was signed by him.
There has been so much discussion, so much argument pro and con, about this measure that I am going to present a carefully made resumé of it, originally prepared for a group of business men who sought to make a most impartial study of the measure. The act itself provides that the railroads of the United States shall be operated by private corporations under a comprehensive system of government regulation. One of the very best things about the act is that in its very essence it represents a fair interpretation of the feeling of the majority of the American people after two years of government operation. That that majority did not take into account the great difficulties under which both McAdoo and Hines worked is not germane to the present point. It saw their mistakes—the waste as well as the many efficiencies of the Railroad Administration—and it demanded a prompt return to privateoperation. Under the pressure of this public opinion—some of it very skilfully aided, to be sure, by inspired propagandists—the members of Congress who framed the Transportation Act were almost unanimous in their honest belief that in the hands of private corporations the railroads could be operated more economically and more efficiently and would give better service than would be possible under government operation. The Transportation Act came as a very natural sequence to such a belief.
The most important provisions of the act are:
(1) That on March 1, 1920, Federal operation shall cease and the railroads shall be returned to private operation.(2) That under a new rule of rate-making the railroads shall be assured adequate revenues; and adequacy shall be defined in the first two years as a net return of 5½ or 6 per cent. on the fair value of the property as determined by governmental authority.(3) That during the transition period the Government shall aid in restoring the financial stability and the credit of the railroads:(a) by continuing the government guaranty of a standard return for six months after the roads are returned to their owners;(b) by creating a revolving fund of $300,000,000 from which the roads may obtain under certain conditions short-term loans to meet their most pressing needs;(c) by extending the carrier indebtedness for capital expenditures made by the government during Federal control for a period of ten years with interest at 6 per cent.; and(d) by the creation of a reserve fund containing one-half of the excess earnings of those railroads whose net earnings exceed the 6 per cent. specified in the rule of rate-making.(4) That the rates and services of interstate carriers shall continue to be regulated by the Interstate Commerce Commission; that the commission shall be enlarged by the addition of two new members, making eleven in all; and that the commission shall have authority:(a) to make inquiry continuously concerning the transportation facilities and services of the whole country, and when and how they should be improved; the state of the credit of all common carriers; and the new capital which the public interest may require any carrier to secure;(b) to permit the consolidation of two or more carriers provided that such consolidation is in harmony with a comprehensive plan (previously adopted by the commission) for consolidating all of the railroads of the country in a limited number of strong competing systems, and also provided that, in the opinion of the commission, the proposed consolidation is in the public interest;(c) to fix interstate rates that shall be just, reasonable, and adequate;(d) to determine the valuation of railroad property;(e) to prescribe a uniform accounting system for all carriers;(f) to exercise exclusive jurisdiction over capital expenditures and the issuance of securities by carriers;(g) to prohibit the extension of present lines or the construction or acquisition of new lines by any carrier until it has obtained from the commission a certificate of public necessity and convenience;(h) to require the construction of docks and rail connections between rail and water carriers;(i) to provide when necessary for the redistribution of traffic and for joint use of terminals;(j) to exercise jurisdiction over the use, control, and supply as well as the movement, distribution, andinterchange of locomotives and cars and also over the supply, movement, and operation of trains; and(k) to order a carrier to install automatic train-stop or train-control devices.(5) That the wages and working conditions of railroad employees shall be regulated by a Railroad Labor Board composed of three representatives of the carriers, three representatives of the employees, and three representatives of the public; and that disputes between the carriers and their employees in regard to rules or working conditions may be referred to railroad boards of labor adjustment—local, regional, or national—voluntarily organized between the roads and their employees, or if such boards are not voluntarily formed, such disputes shall be decided by the Railroad Labor Board.
(1) That on March 1, 1920, Federal operation shall cease and the railroads shall be returned to private operation.
(2) That under a new rule of rate-making the railroads shall be assured adequate revenues; and adequacy shall be defined in the first two years as a net return of 5½ or 6 per cent. on the fair value of the property as determined by governmental authority.
(3) That during the transition period the Government shall aid in restoring the financial stability and the credit of the railroads:
(a) by continuing the government guaranty of a standard return for six months after the roads are returned to their owners;(b) by creating a revolving fund of $300,000,000 from which the roads may obtain under certain conditions short-term loans to meet their most pressing needs;(c) by extending the carrier indebtedness for capital expenditures made by the government during Federal control for a period of ten years with interest at 6 per cent.; and(d) by the creation of a reserve fund containing one-half of the excess earnings of those railroads whose net earnings exceed the 6 per cent. specified in the rule of rate-making.
(a) by continuing the government guaranty of a standard return for six months after the roads are returned to their owners;
(b) by creating a revolving fund of $300,000,000 from which the roads may obtain under certain conditions short-term loans to meet their most pressing needs;
(c) by extending the carrier indebtedness for capital expenditures made by the government during Federal control for a period of ten years with interest at 6 per cent.; and
(d) by the creation of a reserve fund containing one-half of the excess earnings of those railroads whose net earnings exceed the 6 per cent. specified in the rule of rate-making.
(4) That the rates and services of interstate carriers shall continue to be regulated by the Interstate Commerce Commission; that the commission shall be enlarged by the addition of two new members, making eleven in all; and that the commission shall have authority:
(a) to make inquiry continuously concerning the transportation facilities and services of the whole country, and when and how they should be improved; the state of the credit of all common carriers; and the new capital which the public interest may require any carrier to secure;(b) to permit the consolidation of two or more carriers provided that such consolidation is in harmony with a comprehensive plan (previously adopted by the commission) for consolidating all of the railroads of the country in a limited number of strong competing systems, and also provided that, in the opinion of the commission, the proposed consolidation is in the public interest;(c) to fix interstate rates that shall be just, reasonable, and adequate;(d) to determine the valuation of railroad property;(e) to prescribe a uniform accounting system for all carriers;(f) to exercise exclusive jurisdiction over capital expenditures and the issuance of securities by carriers;(g) to prohibit the extension of present lines or the construction or acquisition of new lines by any carrier until it has obtained from the commission a certificate of public necessity and convenience;(h) to require the construction of docks and rail connections between rail and water carriers;(i) to provide when necessary for the redistribution of traffic and for joint use of terminals;(j) to exercise jurisdiction over the use, control, and supply as well as the movement, distribution, andinterchange of locomotives and cars and also over the supply, movement, and operation of trains; and(k) to order a carrier to install automatic train-stop or train-control devices.
(a) to make inquiry continuously concerning the transportation facilities and services of the whole country, and when and how they should be improved; the state of the credit of all common carriers; and the new capital which the public interest may require any carrier to secure;
(b) to permit the consolidation of two or more carriers provided that such consolidation is in harmony with a comprehensive plan (previously adopted by the commission) for consolidating all of the railroads of the country in a limited number of strong competing systems, and also provided that, in the opinion of the commission, the proposed consolidation is in the public interest;
(c) to fix interstate rates that shall be just, reasonable, and adequate;
(d) to determine the valuation of railroad property;
(e) to prescribe a uniform accounting system for all carriers;
(f) to exercise exclusive jurisdiction over capital expenditures and the issuance of securities by carriers;
(g) to prohibit the extension of present lines or the construction or acquisition of new lines by any carrier until it has obtained from the commission a certificate of public necessity and convenience;
(h) to require the construction of docks and rail connections between rail and water carriers;
(i) to provide when necessary for the redistribution of traffic and for joint use of terminals;
(j) to exercise jurisdiction over the use, control, and supply as well as the movement, distribution, andinterchange of locomotives and cars and also over the supply, movement, and operation of trains; and
(k) to order a carrier to install automatic train-stop or train-control devices.
(5) That the wages and working conditions of railroad employees shall be regulated by a Railroad Labor Board composed of three representatives of the carriers, three representatives of the employees, and three representatives of the public; and that disputes between the carriers and their employees in regard to rules or working conditions may be referred to railroad boards of labor adjustment—local, regional, or national—voluntarily organized between the roads and their employees, or if such boards are not voluntarily formed, such disputes shall be decided by the Railroad Labor Board.
Like almost all hastily constructed and compromise measures the Transportation Act falls considerably short of being an entirely satisfactory solution of a difficult problem. Perhaps the best that can be said of it is that it is probably the best that could be expected out of Congress. It is not fair as yet to assume that it is a failure. But on the other hand how can it be to-day accounted a real success? It has not returned to the carriers its promised 6 per cent. upon their capital. Please notice that I say “promised,” not “guaranteed.” The last word is incorrectly used in too many instances. The Transportation Act endeavors to fix rates that will bring in 5½ or 6 per cent. to the railroads; at no time does itguaranteethem. And even this set figure of 5½ to 6 per cent. expired March 1, 1922, two years after the enactment of the statute. Thereafter the adequacy of the return is left to the judgment of the Interstate Commerce Commission. Quite a difference from a 6 per cent. guarantee!
To-day railroad stocks lie virtually inert within the market. Gun-shy investors in Wall Street, and elsewhere too, will have nothing of them. They know the facts. Despite theradical advances made in both passenger and freight-rates since the adoption of the much-heralded Transportation Act, earnings have not measurably increased. The slight net return earned in the last ten months of 1920—but 3.3 per cent., as against the expected 6 per cent.—was wiped out by the poor business of the first two months of 1921; with the result that the net result of the first twelvemonth of private operation was an actual slight deficit. As a year, 1921 was absolutely the worst in the history of American railroading. The total net return for the twelve months ending November 1, 1921, was less than 2.75 per cent.—considerably less than the promised 6, or even 5½.
The situation to-day is hardly improved, despite desperate efforts on the part of the roads to reduce their operating expenses. What they have accomplished along these lines, aside from a further lowering of the reduced service that they are rendering these days, is shown in the fact that by June, 1921, they had brought their wages and transportation costs to eighty-two cents out of each dollar that they earn, and by October it was seventy-four cents. Less than a year before this was slightly over ninety-five cents. By the present time it is just above seventy. The roads themselves are now inclined to attribute much of their financial depression to two things; to the vast industrial slump with its obvious effect upon their revenues, and to their huge pay-rolls. Ingeniously they argued this last point before the Railroad Labor Board out at Chicago in the early summer of 1921 and succeeded in getting a cut of some $500,000,000 in their huge annual wage-bill. But the average railroader of the rank and file still is paid considerably over 100 per cent. more than in 1913. (In exact figures his average pay to-day—on an eight-hour day basis—is $1700 for the twelvemonth, as compared with $761 nine years ago.) This is the figure, along with the figures representing his increased fuel and tax and material costs, that he uses when he justifies the increase of his carrying charges.
Yet the potent fact remains that the high rates are not only not attracting business but actually are driving it away. The long-haul use of the motor-truck, to which I shall refer in more detail in due time, is not due in these days of industrial depression to a lack of box-cars or to yard congestion, but is a protest against the existing rates. And that the railroads themselves are not deaf to these protests is shown by the fact that under the guise of “revising” their freight charges they are actually beginning to lower them. I am inclined to the belief that the partial failure at least of the Transportation Act must have taught all the wise men at Washington, and also a goodly number of our fairly wise railroaders, one distinct thing: You can lead a horse to water but you cannot make him drink. Which, being freely translated, means that you can raise railroad rates to a point where traffic begins to fade away, to find other pathways for itself, or to cease altogether. This is particularly true of passenger rates. A nation-wide rate of more than three and one-half cents a mile, with a heavy increase in the Pullman rates to keep pace, is not a particular inducement to travelers. Moreover the persistent refusal of our railroads to create a lower class of fares than the standard, with a slightly lowered quality of service, give the would-be traveler of modest means no alternative whatever, except possibly to ride in a small motor-car, or to stay at home. A good many of them are riding in motor-cars these days; and a good many more are staying at home. The passenger revenue of our railroads in 1921 was 23 per cent. less than in the preceding year. Which is commended to the attention of official Washington.
Consider now the railroads handed back on March 1, 1920, to their old-time owners—Fairfax Harrison returning from his temporary habitat at Richmond to his familiar offices in the Southern Railway building in the city of Washington, Mr. Rea, Mr. Willard, Mr. Underwood, and others who were temporarily deposed from power triumphantly returning to it. Triumph is the word. The Southern signalized its returnto its own by having its new time-tables, fashioned with their familiar yellow covers and with the odious words, “United States Railroad Administration,” glaringly missing, ready upon that memorable first day of March. It did more. Upon its lines it terminated instanter the use of the Railroad’s Administration passes which had been given rather freely to the henchmen of that branch of Federal service. Other roads quickly ended the life of those passes; but generally gave their holders time to get home with them. Not so with the Southern. For it the U. S. R. A. cardboards ended their value at midnight on February 29, 1920. After that they were good as souvenirs, and as nothing else. The unlucky wight who chanced to hold one, and no other pass, paid his fare from midnight on.
Personal feelings again came into play. One Federal manager of an Eastern railroad, who had had the audacity to move his former chief, the corporation’s president, out of an office that the old man loved, lost his job for his temerity. He was not the only executive who lost his job. R. H. Aishton, who had been president of the Chicago and Northwestern railway at the time of the creation of the United States Railroad Administration, and whose rare ability as an operating executive had been recognized by McAdoo in his appointment to the post of the regional director at Chicago, did not return to his old position. It is understood that he incurred the disfavor of Marvin Hughitt.
Mr. Hughitt is the last of the old guard of American railroad executives. He was born near Auburn, New York, in 1837, has lived in Illinois since 1854, and at eighty-five years of age is still the active controlling influence in the great Northwestern property. He has, to my knowledge, but one senior in the whole business, Chauncey M. Depew, chairman of the board of the New York Central railroad, who is eighty-nine years old; but Mr. Depew long since was very glad to relinquish the reins of operating detail of that great Vanderbilt property to younger and more energetic men.
Not so with Mr. Hughitt. His grip upon the Northwestern has been a firm one indeed. He has held his road to many old-time traditions. The lemon-yellow color of its passenger-coaches; the English fashion that it has of running its trains to the left upon double-track and not to the right, as is the ordinary American fashion; its generous, not to say profuse, local and suburban service—all of these are Hughitt. Since the death of the late Henry Clay Frick of Pittsburg and New York some years ago, there has been no one to oppose him. Frick could and frequently did. It is hard to conceive of any one successfully opposing Mr. Frick.
With Mr. Hughitt absolute dictator of Chicago and Northwestern there was none to oppose his arbitrary dictum in regard to Mr. Aishton. The fact that Aishton had been reared upon the property, that his record upon it was not only good but great, apparently counted for nothing. He was dropped. He had offended “the old man.” That was a heinous offense for which there was no possible excuse. Aishton’s powerful friends in the railroad world rallied to his defense. They elected him president of the American Railway Association at a salary reputed to be equal to that paid him by the Northwestern.
Apparently it is not only McAdoo who can afford to indulge his whim in personalities.
Before the Railroad Administration ceased its actual operation of the roads it began the restoration of much of the pre-war service, particularly of the passenger service. Soon after the signing of the Armistice and the removal of military pressure upon the carriers the important through trains that had been removed—the Broadway Limited and the Congressional chief among them—were returned to their former schedules, although not in every case with the same high degree of service as before. It was not, for instance, until the return of private control that the fastest trains between Chicago and the Pacific coast brought to their pre-war standard of approximately sixty-nine hours. The McAdoo administration as awar measure had lengthened this schedule to seventy-two hours.
Yet it was McAdoo who, once the war emergency was passed, removed the half-cent-a-mile extra charge that he had established against people who rode in Pullmans or other forms of sleeping and parlor-cars and left the fare at a flat three cents a mile—where it should have been suffered to remain in the interest of the railroads themselves.
The Interstate Commerce Commission raised it to 3.6 cents a mile, upon hints from the private operators of the roads. It is but fair to add, however, that there are certain members of the commission who long ago had conceived the idea that the passenger-rates were not bearing their proper burden of the costs of railroad operation. It is these men who have to-day steeled their hearts against any lowering of passenger-rates to a point where the service might at least have some competitive attraction against that of the automobile, publicly or privately owned or operated. In all this discussion at the moment of the possible lowering of freight-rates nothing whatever is being breathed of a readjustment of passenger-fares, with the single exception of a recent bill passed in the United States Senate for the enactment of a Federal statute compelling the roads to sell mileage-books at a low wholesale rate. This neglect of itself is, I think, a most unhealthy sign. While the 23 per cent. lowering of passenger revenues in 1921 as against 1920 is a fairly definite expression of that unhealthiness.
To my mind this is not entirely a question of the proper equalization of operating costs to revenues; the question of setting the tariffs of charges to a point where business shall again be attracted to the railroads, to my way of thought, is the real kernel of the problem. That is the way that the average merchant or manufacturer would look at the similar problems that confront him. To get the business the rates must be made attractive. If it then becomes necessary to reduce operating costs so as to exist at the lowered revenues, thenthe business man will move heaven and earth to reduce his costs.
Apparently the Interstate Commerce Commission does not see the question in this light. One understanding the complexion of its membership would hardly expect it so to see it. The commission is absolutely honest and, to a large extent, able; but it is generally dull. It has no traffic sense; no sense of salesmanship. It has no vision. It always looks backward, rarely forward. Being composed almost exclusively of lawyers,—long ago it was recognized apparently that it would be a fearful thing to place an honest, far-sighted, energetic railroad executive in its personnel,—it spends a great deal of time seeking for precedent. Therefore it hardly can be expected to look forward.
“Whatisthe precedent?” it keeps asking. “How has it always been done in the past?”
This is one of the very great reasons why our railroads to-day are not marching forward in step with the progress of the other great businesses of America, why so often they are called, and with such a deadly truth, “the sick man of American business,” why they have lost so much of public confidence and of public support, why the morale not only of the rank and file but of many of the executives as well has come to so low a pass.
The railroads of the United States to-day, deprived of so much of their initiative by the Government, should at least be able to look to that Government for some real qualities of inspiration and of leadership. Such qualities they need. Such qualities are not being given to them. The sick man needs medicine, physical and mental, not abuse. The Interstate Commerce Commission should be made into a doctor who can cure as most good doctors do cure these days, not by nostrums alone, but by good cheer and inspiration.
One or two things more, if you please, before we are done with this chapter.
The railroads generally wormed themselves out of the joint terminal arrangements which McAdoo had made for them, and made in almost every instance to the great comfort of the traveling public. The Southern Pacific expelled the offensive big Santa Fé and the almost equally offensive little Western Pacific from its ancient station and “mole” at Oakland opposite San Francisco. The Pennsylvania prepared to do the same thing with the Baltimore and Ohio and the Lehigh Valley at its station in New York. This last move was not carried out. I had something to do myself with preventing it.
The question arose in my mind at the termination of Federal operation: What will the Pennsylvania do with its chief competitor there in its fine station upon Manhattan Island? Will it do the obviously competitive thing and thrust the Baltimore and Ohio out, along with the Lehigh Valley into the bargain? A little questioning developed the fact that that was its precise plan. The question of rental charges did not enter into the situation. The Pennsylvania was not direct in its explanation; it did not say, as it might honestly have said: “We built this big, expensive station as a competitive move, and we do not purpose to share the fruits of our enterprise with a competitor who did not share the great risk of the undertaking.” It merely said that there was not room in the station for the fourteen daily trains of the Baltimore and Ohio and the eight of the little Lehigh Valley. It was handling 175 of its own trains there, and about 275 of the Long Island in addition, but it could not find room for twenty-two other trains.
Here was railroad competition showing its most disagreeable side to the public weal. The man who lived at Martinsburg, West Virginia, or Cumberland, Maryland, or virtually any of the other non-competitive points of the Baltimore and Ohio was to be penalized henceforth in the name of competition. Having enjoyed great comfort and facility under the non-competitive plan of the United States Railroad Administration in the use of the Pennsylvania Station in the heart ofManhattan, he was now to be shoved back into the old station at Communipaw, just below Jersey City, with its slow and cumbersome ferry connections across the Hudson River. It was not likely that he would henceforth become an enthusiast over the competitive system of railroading.
The whole thing seemed so absurd that I took it upon myself to mention it in the public prints. That apparently did the trick. Publicity ofttimes does. The Pennsylvania changed its position; in a big and graceful and generous way it waived what apparently were its obvious competitive rights in the situation, and invited both the Baltimore and Ohio and the Lehigh Valley to remain at least for some years to come in its great New York passenger terminal. The invitation was accepted with alacrity.
Most of the consolidated ticket-offices still remain, although there is a constant disposition among the more independent of our separate railroads to break away from them. Theoretically offering far better facilities to the traveler than the separate city offices, practically they rarely do this. For one thing, despite their brave show of mahogany and other fine forms of office fittings, they frequently are under-manned, particularly in seasons of heavy travel. And a man in a hurry going to one of them frequently is compelled to wait an outrageously long time. The fact also remains that the so-called weaker lines that use them seem so submerged as hardly to have a fair chance at the competitive traffic. A small railroad can make a large showing with an attractive office in the heart of a big city. Relatively it outshadows its neighbor.
Where the individual roads have remained in the consolidated offices up to the present time, it has been largely the result of a laudable desire to stand by their fellows. The Railroad Administration forced some one line in each large city to assume the rental of the consolidated offices. In Chicago, for instance, the ten-year lease (at $65,000 a year) of the consolidated ticket-office fell upon the broad shoulders of theBurlington. With the exception of the Northwestern system, which showed a particular antipathy to the late Railroad Administration, virtually all the large roads have remained with the Burlington.
There is moreover an economy argument in the consolidated office that is not without its appeal to the railroad executive. The only question in the mind of his traffic expert is whether the economy argument is not completely overcome by the additional business to be gained by a red-hot competitive little separate office. Of course if all the lines coming into any large city should maintain red-hot competitive little separate offices the gain would be theoretical rather than real. There might be some passenger traffic actually created by the brave showing of the separate offices, but I think that it would be negligible.
The convenient universally interchangeable mileage-book that McAdoo installed (with his name printed upon each third tiny coupon) has been retained with all of its universal privileges, up to the present time at least. But no longer with the name of McAdoo brightly displayed. It still represents no saving to the purchaser over the price of individual separate tickets, though offering a certain convenience in the checking of through baggage, in making Pullman reservations and the like. Yet the putting through of the Senate bill authorizing the Interstate Commerce Commission to reduce its price bids fair at last to lead toward a correction of this precise phase of the situation. Gradually a pretty well-defined feeling is being developed that railroad passenger-fares in the United States to-day are entirely too high. “Not more fares but more riders” is a slogan which a young man who is developing traffic for street railways is using, with telling results. His slogan is quite as applicable to the steam railroads. They apparently have brought their passenger-rates to a point where the riding, always a variable and uncertain quantity, no longer is attracted to their trains. And this is an hour when the motor-car is steadily gaining strength as a competitor of the railroad.
The flat abolition of the stop-over privilege which some enthusiastic railroad traffic expert urged upon McAdoo is now being slowly worn down again, at least to the point where most of the stop-over privileges that were in existence in pre-war days have now been restored. The traffic departments of our various railroads all the way across the land at last are beginning to unbend. The traveler is beginning to regain his old-time privileges.
We do progress.
THE PRESENT-DAY SITUATION
Yetour progress is by no means rapid; it easily may be described in the one word “halting.”
In the opening chapter of this book I directed attention to the ravages in the service of our national railroad structure that any man can readily find for himself. To discover, specifically, how the passenger train service across much of the land has been depleted he has but to turn over the pages of that ponderous tome, the “Official Guide of the Railways of the United States.” The many, many trains of yesterday that are missing to-day even after the partial reparations to this important branch of the railroad’s social obligation to the nation that the Railroad Administration made after the war crisis show the deletions that have been made. There too he might find how the speed of most of the trains that remain is slackened.
I have no argument to present for the excessively fast train in the United States; it is a risk and an extravagance that we can well afford to do without. One of the shrewdest moves that the New York Central and the Pennsylvania systems made was, some seven or eight years ago, when they lengthened the running time of their fastest New York-Chicago trains from eighteen to twenty hours. There is little doubt that the New York Central, at least, could operate a train between these two cities in sixteen hours or in a very few minutes in excess of that time by the use of the long straight tangents of its Michigan Central subsidiary across the southerly portions of Ontario and Michigan. But at what strain upon the men backof the enormously efficient machine, at what great risk to life and property!
Despite the proverbial reputation of the American for great haste in everything, we have had but little desire in this country for extreme high-speed trains such as our friends overseas take such keen delight in boasting about. A few years ago the world was running riot on train speed. We had our two rival eighteen-hour expresses between New York and Chicago, to say nothing of the once famous Empire State doing the 440 miles between New York and Buffalo in exactly eight hours. It was that train which a short distance west of Rochester once reached the unofficial speed of 112½ miles an hour, and held it for several minutes. There were a dozen mile-a-minute expresses between Camden, opposite Philadelphia, and Atlantic City, divided between the Pennsylvania and Reading systems. The latter road, in connection with the Central Railroad of New Jersey, ran fast expresses each hour of the day between Jersey City, Communipaw Station, and the Market Street terminal in Philadelphia, a distance of ninety miles, in an hour and fifty minutes. And the management of the New Haven was purposing to establish a four-hour train between New York and Boston—229 miles.
In those days our British cousins were maintaining our pace, or possibly going it a little better. Competing roads on each side of Great Britain all the way from London up to Aberdeen, its northernmost large city, were at each other’s throats. The London and Northwestern and the Caledonian railways, working together, operated a train from London to Perth which on the greater part of its run was scheduled for actual operation at 49½ miles an hour and which was given but two hours and five minutes for the 117¾ miles between Carlisle and Stirling. Finally the competition reached a point where these roads—the so-called “West Coast route”—had a regularly scheduled train from London to Aberdeen, 540 miles, in eight hours and thirty-two minutes. This was considerably better than the East Coast route—chiefly the Great Northern,the Northeastern, and the North British railways—ever succeeded in doing. Their best regular schedule, even though their route was seventeen miles shorter, was eight hours and forty-two minutes.
The best regular trains on the crack Chicago and Alton, the shortest route between Chicago and St. Louis, take to-day seven hours and forty-five minutes to traverse the 284 miles intervening between those two important cities. It is 451 miles across level country from Chicago to Kansas City by the double-tracked Santa Fé—a distance ninety miles less than by the West Coast route from London to Aberdeen—yet the Santa Fé’s best train between Chicago to Kansas City takes eleven hours and twenty-five minutes for the run. And even then it is not permitted to carry passengers; the best passenger time is five or ten minutes longer. I do not think that we Americans can be called speed crazy.
Great Britain also has now slowed her trains down. She progressed that way before the beginning of the war. A nasty accident or two close to the beginning of the century was responsible for the change; while the war itself, as in this country, slowed the fast train schedules to a vast extent. Now her service is back to its old general standard of reasonable (but no longer excessive) high speeds in almost every direction out of London. There are abundant service expresses running in an even four hours between that city and both Manchester, 184 miles, and Liverpool, 193 miles. Competition is supposed to have forced this service. Competition is forever supposed to be forcing service. Yet on the non-competitive Great Western railway I rode, but a few months ago, from London to Bath, 104 miles, in an even two hours, while across the Channel, I had ridden, but a few weeks before that, over the war-struck Eastern railway of France ninety miles from Paris to Rheims in just sixty seconds less than an even two hours.
We have slackened our running time appreciably in the United States these days; very wisely, I think, in the case ofthe twenty-hour trains between New York and Chicago. As a matter of fact the Twentieth Century Limited, doing the 979 miles of the longer high-speed route between those two cities, from 2:45 o’clock one afternoon (Eastern time) to 9:45 o’clock the next morning (Central time), still makes a remarkable train performance. The Pennsylvania still has two or three of the mile-a-minute flyers in service between Camden and Atlantic City—59.7 miles in fifty-seven or fifty-eight minutes. The Reading has one or two of its flyers left, not only between those points, but between Philadelphia and Jersey City.
Yet this is about all of the mile-a-minute work. From here the slackening in time is appreciable until we come to the comparatively slow performances of the high-grades between Chicago and the cities that lie back of it. The New Haven no longer talks about a four-hour train from New York to Boston; it has lengthened its schedule between those cities. There also has been a slight lengthening of the one-time high-speed schedules between New York and Washington. There has been a let-down. The once proud Empire State Express now takes nine hours instead of eight to go from New York to Buffalo, while out upon the Pacific coast the tremendously high-speed expresses of the Santa Fé between San Francisco and Los Angeles, the Saint and the Angel, which we saw but a little time ago being summarily dropped by the McAdoo administration, have never been restored. They are not likely to be restored.
The Southern Pacific takes thirteen hours and one-half for its best express between San Francisco and Los Angeles, a run of 475 miles. But a moment ago we saw the West Coast system of England doing 540 miles in eight hours and thirty-two minutes, and keeping it up month in and month out. Similarly the S. P. takes twenty-nine hours and ten minutes for its best train between Portland and San Francisco, a distance of 773 miles. It is 517 miles from Paris to Marseilles; the best regular express train between those two cities makes the run in twelve hours and thirty-three minutes. It is 652 miles fromParis to Nice; a regularly scheduled passenger train does it to-day in seventeen hours. And yet the French railway executives promise that they will do much better.
In these things we are not progressing. Take once again the worst of our national transport picture, the vexed New England situation. I have just referred to the slight lengthening of the time of the fast trains between New York and Boston, rather than any expected possible shortening of their schedules. The New York-Boston services of both the New Haven and the Boston and Albany roads are not typical, however, of the service that is being given New England these days; if it were there would be no large cause for complaint. It represents in fact the very top notch of the passenger service of the six most congested States in the Union, the very States which by all right and sense should to-day be enjoying the best passenger service, not the worst.
We have seen already the deplorable state into which the suburban service in and out of Boston has long since fallen. Boston is not all of New England, even though some Bostonians may so believe. Take the case of the Fitchburg. The Fitchburg started off as a railroad with good prospects. For it was bored the spectacular Hoosac tunnel (4¾ miles in length), upon the completion of which the Fitchburg became the short-line between Boston and both Troy and Albany. The lordly Boston and Albany meanders magnificently through the high hills of the Berkshires, and takes much longer for the process.
Unfortunately the little Fitchburg road never had much of a chance for its money. The close traffic alliances between the Boston and Albany and the New York Central, which preceded the actual leasing of the one road by the other, gave it little or no chance for through freight between New England and the West. Its short mileage and well-built line availed it nothing. Eventually it fell into the hand of the Boston and Maine and became, in large part at least, a local line, taking from the New York Central and the Delaware and Hudsonsuch freight as the Boston and Albany would not or could not take. Yet for years it kept up a brave show. It ran between Boston and Buffalo and Chicago and Detroit and St. Louis sleeping-cars a-plenty. It had an excellent dining-car service too.
The dining-cars are gone from the Fitchburg these days. It has become indeed a very secondary stem of the Boston and Maine. Two parlor-cars ply their way daily on slow trains between Boston and Troy; recently a Boston-Buffalo sleeper was added to the service. The road has lost not only its name but its personality and its service too.
What is true of the Fitchburg is equally true of the erstwhile Housatonic. Equally true also is the fact that twenty-five years ago the best train between Pittsfield and New York made the run in an hour’s time less than the best train on that line consumes to-day. There were more trains too, just as there were more trains then on the New Haven and Northampton line, the Connecticut River, the New England, the Boston and Providence, and a dozen other little individual roads that long since lost their name, their prestige, their individuality, and, what is far more important, their intimate personal touch with their patrons and their employees.
The main line express trains of the New Haven between Boston and New York, either by the way of Springfield or by Providence, have not lost their excellence to-day, neither have the main line express trains of the Boston and Albany nor the Boston and Maine’s trains to Portland and points far beyond, although there are none too many of them and they are none too generous in their accommodations. It is in the branch line trains, just as in the branch line stations, that the New England passenger service has not progressed but has distinctly retrograded.
Descend beneath the obvious. Ignore even the sickening decline in railroad dividends, whether average or cumulative—the records of Wall Street will give you all that you want of these—and come to the deterioration of the roads as shownin hard and unsentimental figures. The condition of the locomotives and cars of almost all of our railroads had begun to decline seriously even before the days of the Railroad Administration. When that supreme governmental organization came into being it pledged itself to return to the carriers their properties at least as well and as fully equipped as upon the day it took them over. It did not quite succeed in doing this. The extent to which it failed, by the statistics referring to freight-cars alone, was as follows: In 1917, the year of private railroad operation immediately preceding those of government control, our national transport structure had 2,479,472 freight-cars, which was much less than it should have had. The roads had failed to build enough equipment to keep pace with the overwhelming increase of traffic, which almost at the very beginning of the World War had been thrust upon them. Under almost all circumstances they found it necessary to “scrap” or otherwise remove from service approximately 100,000 worn-out cars each year. For several years before 1914 their construction of new cars had barely more than kept pace with this annual loss.
Yet under governmental operation things went from bad to worse; despite its orders for 100,000 box-cars the Railroad Administration did not buy enough cars to keep pace with those that were being scrapped. In 1918 the total freight-car equipment of our carriers had declined to 2,397,943, in 1919 to 2,361,102, in 1920 to 2,352,911—in other words a total decline since 1917 of 125,561—while the normal increase of our transport plant called for an increase of at least twice this number of cars and certainly admitted no decrease whatever.
In this connection, I think that it is at least worth a paragraph in passing to notice that in the seven years ending with 1913 our railroads increased their freight traffic 39 per cent. In those same years they added 315,000 freight-cars and 8,100 freight locomotives to their existing equipment. In the seven years that ended with 1920 the traffic increased again—virtually in the same ratio, 38 per cent.—but only 143,000 freight-carsand 4200 freight-locomotives were added to the total rolling-stock. In 1921 but 20,000 new freight-cars were purchased and but 250 locomotives of all types. It is no wonder that many of our railroaders now view with real apprehension any return of heavy traffic.
Moreover not only the number but the condition of the individual cars has declined. A small Eastern city which I know very well indeed is a brisk point in interchange freight. It is also a water port of fair importance, to which a large number of coal-cars come in the average summer and autumn. Last autumn I noticed that many of these cars were in a pathetic state of disrepair. The yardmaster explained it to me.
“The first time they come through from the mines,” he said, “they will have their hoppers braced with a bit of timber so as to keep all the coal from spilling out upon the tracks before they even reach here. Somehow that timber will get lost before the car gets back to the mines again. The mine-bosses will put in a flooring this time. Fine business, that! The hoppers won’t work at all then, and thirty tons of coal have to be shoveled out by hand—at the present price of labor!”
Think of this single all-too-typical instance many times multiplied; combine this fact with that of the great decrease of freight-cars of any sort upon our rails to-day and you begin to get the measure of the true condition of our sick man of American business. To-day approximately 354,000 of the freight-cars of the United States are reported as being in bad order. And while a “bad-order” car may be, and frequently is, used for some forms of rail traffic (as for instance a leaky grain-car utilized for the shipment of automobiles) the fact remains that nearly 15 per cent. of our total freight-car equipment stands in great need of large repairs or of replacement, while 19 per cent. of our locomotives are so far gone that they have been thrust upon the sidings virtually abandoned. In another chapter we shall see how these locomotives might be rejuvenated and put to work again, more efficientthan ever before. For this one however consider them nil and valueless to the American railroad.
It was partly to remedy conditions such as these as well as to provide for the return of the roads to private operation that the Transportation Act was passed. For there is not only a great rolling-stock shortage but virtually little or no extension of our railroad structure. As recently as in the decade from 1901 to 1911, 52,000 miles of brand-new line—a larger route mileage than that of almost any other nation in the world—were laid down. Since 1911 there have been virtually no new railroads in the United States. The comparatively small San Diego and Arizona railroad was completed but a year ago, but this was more than offset by the abandonment and removal of such lines as the Buffalo and Susquehanna and the Colorado Midland, to take two instances out of several. In 1920 only 314 miles of new railroad line were built in the United States, while 536 miles were abandoned. In 1921 service was discontinued on 1626 more miles of railroad. For six years past our total rail mileage has been going backwards, not rapidly but steadily and perceptibly; the small amount being constructed each year is being rapidly overbalanced by that which is being torn up. Our sick man of American business is a very sick man indeed.
Up to a decade ago our railroads were still busy increasing and enlarging their terminals, double-tracking their single-track lines, and three-tracking and four-tracking their double-track ones. The Union Pacific was achieving the distinction of being the first long-distance double-track line in the great West; in the East the Erie, the Lackawanna, and the Baltimore and Ohio were completing their remarkable series of cut-offs. All this has ceased, even though the necessity for its continuation has not ceased. For if the country does not absolutely stand in need of new trunk-lines to-day there still is a vast and unanswered demand for feeder branches in many, many corners of it, for duplication of tracks upon existing and badly overcrowded single-track and double-track lines. New York,Buffalo, Cleveland, Cincinnati, Pittsburg—other important cities as well—fairly cry aloud for a revision and extension of their terminal facilities, and cry in vain.
Rates have been increased, comparatively recently, to a point, as we have seen, not only higher than the most imaginative of our rail traffic experts might have dreamed five years ago but, as I have remarked already, to one where the traffic instead of being attracted to our carriers is actually being driven away from them; and some of the wiser executives have come to the point of asking the Interstate Commerce Commission for a modification of rates. From a niggardly policy of former years toward the railroads in regard to rates, this body, in professed obedience to the Transportation Act, raised them to the prohibitive point. Now it is beginning to see the error of its ways and, as we have seen at the behest of actual railroaders, is lowering certain of the freight charges, although not in any general or particularly scientific fashion. Recently the commission responded to a large public pressure by permitting the roads to reduce their freight rates on farm products 10 per cent. for a test period of six months, with the possibility that further freight rate reductions will be made.
And finally, as we all know, wages are now being reduced. Already they have been brought down half a billion dollars a year, and in all likelihood they will be even further lowered. As to the justice or wisdom of all this we shall talk presently. The fact remains here and now that a generous step has been taken in bringing down the greatest single item of the cost of conducting railroad transportation, while some of the other costs, chiefly materials, to-day are being reduced automatically by the steady fall in market quotations of supplies of every sort. The situation slowly but surely is working itself through.
On the other hand, what does the public demand in this railroad situation? What is the opinion of the Man on the StationPlatform? Surely he has a voice in the matter. He rides on the train, if not daily as a commuter, then perhaps as often as every week or every fortnight. He talks. He observes. He forms conclusions. And some of these last might be accepted as fairly indicative of his needs as a constant patron of the railroad in both its freight and its passenger services.
The Man on the Station Platform believes first and foremost that transportation in this country, as well as in all others, is not merely railroads or motor-trucks or canal barges—not even aëroplanes, if you please—but a scientific correlation of all of these agents of transport. He believes that each must have its own field in which it reigns supreme because in that field it is the cheapest and the most efficient form of transport. And therefore in that field should be recognized as supreme and so developed.
I share these beliefs of my friend who stands on the shady platform awaiting his up-local. I cannot see these agencies in the long run and in the fullest understanding as competitors but as correlators, if such a word may safely be coined. Each should supplement the other. In the full understanding of modern business competition has little real value; in the conduct of public utilities it has none whatsoever. We learned long ago that in gas-works or in water-works, in telephone service, even in the traction facilities of our largest metropolitan cities, it was no lasting help in the long run but merely an added expense burden upon the community, and so should be eliminated or at least brought down to its lowest possible level.
Here then is perhaps the greatest of the burdens that the man outside of the railroad can wish to see removed from it. There are others: the neglect of the fine intensive salesmanship of transportation, which should have been brought to the fore years and years ago; the opportunity for the development of electric traction, of the container system of handling goods, which oddly enough brings us back again to the correlation of the several agents of American transport and the elimination of our absurd competitive plan.
All of these things will have had our attention before I am done. The question is one that demands a great deal of attention. The condition of our rails, instead of growing stronger each day, daily grows more precarious. It is obvious that this condition cannot long continue—the service greatly reduced and impaired, the men sullen and ofttimes working at direct cross-purposes to the management, the rates raised to the point where traffic begins to refuse to come to the stations, the financial condition so depressed that railroad securities will not sell under the absurdly uneconomic prevailing conditions, no thought whatsoever being given to the morrow.
Out of this miserable mass we must raise a program, definite and distinct and statesmanlike, as sound as the program under which we changed our money situation from periodic chaos to vast and proved stability. It must be a program of progress, not a continuation of the absurd artifice of competition years after every other business has found that its economic strength comes in correlation and not in competition, but a genuine progress—progress in the physical fiber of our railroad structure, using the electric motor, the gasolene motor, the industrial terminal, the package container, a dozen other steps as well; progress in the really fine science of selling transportation; progress in human relationship. In such progress there is nothing chimerical, nothing even remotely approaching the fantastic. And in such progress, and nowhere else, can one hope to find a solution of our railroad problem of to-day that even approaches permanency.
THE MAN FACTOR OF THE PROBLEM
Progressin human relationship may be, I think, safely permitted at least the consideration of priority in any understanding of our surpassing railroad problem. For it may also be set down as fairly axiomatic that unless we progress in this phase of transport we cannot expect to go ahead in any other department of it. In its tense importance to the larger question this very human problem can be regarded as foundation-like. Upon it the railroad structure may yet build. Without it, it certainly must fall.
For more than two decades past, imagination, virility, foresight have been upon the wane in our railroads of the United States until to-day with these qualities quite gone upon many of them, the debacle of our national transport machine becomes a doubly depressing picture. The man with an idea may be needed upon our carriers but, as we shall see gradually, he is not often wanted there. They are ruled by conservatism; conservatism carried to the last degree. Yet only yesterday the man with an idea was at a premium in our railroading; our roads themselves were known for their daring, their strength, their progress. To-day too many of the men who operate them are the abject slaves of a system; the only ideas that they safely may advance are those leading to immediate economies. Immediate expenses, even with great and far-reaching economies as their ultimate result, are quite taboo. The railroader no longer may think. Apparently he may only execute.
What is the reason for this—for the human debacle of our carriers following so closely upon the physical, and in many cases responsible for it? Has the American railroader losthis ability to think and to act upon original lines? Has he sunk, with the debris of much of his once proud transport system, almost to the limits of degradation?
A hundred answers will be made to these questions. Some of them will come from banking interests—shrewd men, in banking. These will bear upon the degree of regulation to which our rail carriers are subjected to-day.
“These government sharks have killed railroad initiative,” it will be said time and time again. There is some truth in that answer, yet I think myself there is greater truth in the statement that absentee ownership of the carriers—if I may be permitted to speak frankly, long-distance banker control—has done far more than regulation, either State or Federal, to kill initiative and progress in our transport machine. Wall Street is likely to think too exclusively in terms of dividends; Wall Street does not think enough in terms of men.
People in Wall Street, and a good many others outside of that famous thoroughfare as well, think of the difficulties of our railroad problem as things merely of dollars and cents. They feel that the questions of rates and wages, of income and outgo, are the sole factors to decide the future weal or woe of the railroads. If the rates are put high enough and the wages and other items of expenditure are kept low enough the roads will prosper again. These people feel that the problem is solely an economic one.
I believe that they are wrong. Granted that dollars and centsdoenter largely into the problem and its solution, that unless our national system of railroads becomes a real “going concern” it can hope for no continued success, I still feel that the prime point of the entire question is contained in three words, the human factor. This factor comes first, not last. That Wall Street and other cocksure people have in the past placed it behind the problem of finance, is one of the very large reasons why our American railroads are having such extremely hard sledding at the present moment.
The human problem of the railroad may be fairly said to be divided into two classes, that of the patron and that of the employee. Before I am done the necessities of the first of these classes will have had attention; for the moment those of the second claim our full interest. There is always that meaningful phrase, “the fine tradition of our American railroading,” that we are using again and again because it stands for something very definite, the thing which was largely responsible for the first upgrowth and strength of our railroads and whose loss within recent years has been chiefly responsible for their downfall. It was that tradition, that old-fashioned affection for railroading and loyalty to it, that made men work, not eight hours, but ten or twelve at a single stretch, and under the stress of a great emergency, such as a flood or a blizzard, sometimes sixteen or twenty-four or even forty-eight hours at a stretch. To-day they will not do this.
Why?
It is not a story quickly told. To understand why the railroader of to-day will not work long hours, even in reasonable emergencies, save under the spur of fearfully high overtime pay, why he goes about with indifference in his manner and a lurking grudge in his heart, one must dive beneath the surface of the situation. There he may find the solution of the loss of our railroad tradition.
The beginnings of that tradition are in the beginnings of the American railroad itself. They root back to the days when the overland carriers were in that same flash stage of development that in our day we have seen come to the motor-car and the motor-truck—the days when romance rode the steel highway, when it was thrusting its stout tendrils here and there and everywhere, when earnings and enterprise and initiative were all alike unlimited, when, in a word, the railroad called in an all but irresistible way to the rich man’s son and the poor man’s too, when the banker’s clerk a president would be and the farmer’s boy had as his supreme ambition the driving of a fast passenger-locomotive.
What has become of that farmer’s boy who used to stand in a field for a single idle moment to watch the fast express go sweeping by and dream wistfully of future possibilities, or who stood for a fascinated minute beside the iron horse as it paused at the country depot, studying the intricacies of thrust and gear and bearing? Alas, he no longer covets railroading. It has ceased to enthrall or even interest him, despite the fact that the swing of the pendulum is to-day all in favor of the rank and file of men who work with their hands upon the railroad. Yesterday, in those same golden days of which I have just spoken, the swing was at the other end of the arc. The railroad employee was down; his employer was up. Two years ago this giant pendulum had completed its course. The employer was down, the employee up; and something approaching a social revolution in our railroading had been accomplished.
The railroad employee—succinctly the two million and a half of the rank and file of railroad workers—had become a political asset. Two million and a half direct votes are a bait that few shrewd politicians can ignore. That it was not ignored has in recent years been shown repeatedly, in the passage, by this State legislature and that, of various protective statutes for the railroaders, some of them good and some of them absurd; in the thrusting through Congress of the Adamson Eight-Hour Law; and in the extreme deference shown by the first Federal director-general of railroads to the big brotherhoods and other unions of transport employees, with the final result that those groups of railroad labor which had remained unorganized up to the period of Federal control proceeded to organize themselves. The stake was too good.
Incidentally it may be stated that in past years the average railroad executive was himself the largest single force toward the propagation of trade-unionism within his industry. While decrying its steady growth he placed a premium upon its advantages. Let me explain. A few years ago, say ten or fifteen, at the most, there were but four important unions ofrailroad employees—the four great brotherhoods of train workers: engineers, firemen, conductors, and trainmen. These were and still are high-grade organizations, extremely independent, refusing for many years even to affiliate with the American Federation of Labor. The men who conducted them were high-grade men of great principle and considerable vision. They fought for the rights of their fellows and fought well, with the result that there were few times when train employees were not adequately paid.
At that time the rest of railroad labor, with the very few exceptions, had no national organization; its individual loyalty was given instead to the properties for which it worked. With what result? Here is one glowing instance.
Conductors, then and now, belonged almost without exception to their strong trade organization, the Brotherhood of Railroad Conductors. It took good care of its own. A conductor on a fairly good run might easily earn from $175 to $200 a month, even in those prosaic days of butter at twenty-five cents a pound. It was a good pay, yet one could hardly say that the average conductor was overpaid. For he was far more than a mere train employee, particularly if he had a passenger run. He was a great point of personal contact between a railroad and its patrons. Upon his tact and diplomacy and understanding, or lack of these qualities, his road might rise or fall. True at all times, this was intensified in hotly competitive territory. A good conductor might easily bring or hold patrons for his road, a poor one drive them away to the other line.
Yet I think you will agree with me that at least an equal point of contact between the railroad and its patron is the man with whom he comes in contact before he boards the train—the station-agent.Histact and diplomacy and understanding have a good deal to do with attracting patronage to the road. Yet it was not more than a decade ago that I found in a certain small brisk Eastern city of some twenty-five thousand people the chief representative of an important railroad workingseven days a week, twelve or fourteen hours a day, and paid $85 a month. He knew what the conductors who ran the trains past his station were receiving and it rankled.
This was not an unusual case, this high-grade man, working long hours in his office at the passenger station and between trains scurrying out through the town to sell tickets to possible travelers over his line—it was in a genuinely competitive territory. It was all too typical. More than one railroad in past years paid its dividends out of the exploitation of its labor, and to-day is reaping the benefit of its short-sightedness. One can imagine the ease with which the former United States Railroad Administration was able to help bring about a strong union organization of railroad station-agents and employees!
Mr. McAdoo was not asleep to the possibilities of this situation. We already have seen how from the outset he extended to labor a place in his cabinet and placed the entire vexed wage situation in the hands of a special commission headed by the late Franklin K. Lane. Now in all fairness and in simple justice to the Railroad Administration it should be set down that no matter what its motive it did seek to place railroad labor on a more scientific and more human basis with relation to its employer than any private corporation had ever succeeded in giving it. It tried to place the railroad wage on a basis more directly in accord with living costs, and less with mere supply and demand. Similarly it endeavored to better the working conditions of the rank and file of the railroaders. That in some of these last cases, particularly those of certain of the so-called national agreements, eventually it went entirely too far, is not to be denied. That is now proved by the willingness of the new Federal tribunal, the Railroad Labor Board out at Chicago, to abrogate these agreements as soon as the individual carriers shall have succeeded in making new ones with their workers.
This last, however, seems to be much easier planned than actually accomplished. Months are slipping by and some of the outrageous and expensive agreements still stand, along withsome others which are neither outrageous nor expensive. The very worst of the lot, the meticulous arrangements under which a small job on a locomotive headlight (to make a single possible but rather typical instance) required six or eight men because each was a specialist and no man could infringe upon another’s specialty, are going now and going rather rapidly. There is an apocryphal story around one Eastern railroad town to the effect that the changing of an air-hose connection on a Pullman sleeping-car one day more than a year ago cost the railroad forty dollars—a small job which two ordinary capable mechanics would have been glad to perform for but two or three at the most. Instances such as these have been multiplied. A farmer’s boy who lived close to a railroad in the Middle West and who received five dollars a month and an occasional trip-pass to Chicago and back for oiling and watching an automatic electric pump at an obscure siding saw himself rated as an electrician and in receipt of $185 a month (standardized wage) without having lifted one finger toward the bonanza. It was heyday for the rank and file. The Lane Commission, which really did much scientific work on this wage question despite the exceedingly great time pressure and the war crisis under which it worked, started the ball rolling, yet in what seemingly was a very fair and reasonable fashion. It was after that, even after Mr. McAdoo’s actual term of office as director-general, that the real damage was done. The pendulum swung then, and swung far. From a point where the wage-scale was unfair to the railroad employee it came toward a point where it was unfair to the railroad investor.
This was particularly true in the case of the shop-craft men. They seem to have been the real offenders in the situation. With the position of the men in the train service, the members of the brotherhoods, I can have little else than great sympathy. Their plight at this moment is deplorable. At the best, they catch the hard end of railroading, the long, unconscionable hours, the stress of bad weather, the nights awayfrom home, all the other difficult conditions of life upon the road. I do not believe that there have been many times when these men have been seriously overpaid. The score is far more apt to lie upon the other side of the table.
True it is that even in these branches of railroad service the unreasoning form of national agreement has crept in. I can remember not so many years ago up in northern New York when if a switch-crew was sent down to one of the paper-mills to get a box-car it was paid two hours’ pay for two hours’ work. That was fair pay—and it was not. A switch-crew even in dull times could hardly exist on the prospect of getting no more than two hours’ pay out of twenty-four. Gradually the pay for such a job—any job at all—was set at a minimum of half a day. That seemed fair. A little later this minimum, no matter how small the job, was set at a full day’s pay. Even that might have been fair were it never abused. Let me illustrate.
Here is a yard-crew kicking around in Watertown yard. The first thing that happens in a brisk day is that an engine derails somewhere south of the junction. It is not a serious mishap, and the yard-crew, acting as a wrecker, cleans it up in ninety minutes or thereabouts and gets a full day’s pay. An hour later that same crew has to take a box-car two miles down the Cape Branch to a paper-mill, another ninety minutes perhaps, and another full day’s pay for every man Jack of the crew. They sit around for three hours in the yardmaster’s cabin and settle all the affairs of the New York Central railroad. In two or three more hours a careless switcher sends two flat-cars off the end of the siding up at Sewall’s Island. Our little crew is again a wrecker. It goes up to the Island, puts the derailed cars on the track again,—another ninety minutes of actual work,—and draws a third full day’s pay. Three days’ pay in eight or nine hours is not bad. I should like to be able myself to turn the trick.
This is an exceptional case, of course—and it is not. Some strange things are possible in the national agreements whichwere foisted upon the Railroad Administration during the control of Walker D. Hines. I do not believe that Hines himself ever realized how strange they might become—his own large railroad experience would have guarded him against them.
When the versatile Henry Ford embarked not so many months ago on the difficult and time-honored business of running a railroad he was not greeted with any warm-hearted reception dinner by the American Railway Association. He probably was not even asked to join the association. Its members had heard of Mr. Ford as a shatterer of traditions. And traditions, as you already know, to the heart of the old-time railroader are like unto the ten commandments themselves. I have no brief for Mr. Ford, any more than for Mr. McAdoo. He is not an economist, although he would like to think himself one. He is a mechanic, a super-mechanic if you please. And he has a glorious knowledge of men, their strength and their weaknesses. Yet this is not criticism. These last qualities are much needed in our American railroad situation to-day. By this time there is almost a superfluity of economists in it.
Mr. Ford at the outset sought to solve the railroad labor question by straddling it—by tearing up all the cumbersome and complicated standardized national agreements between the men of the small railroad that he now owns and substituting for them a generous minimum wage and the right of the road to utilize a man at whatever work it pleases, within his established eight hours of labor. On Mr. Ford’s railroad an employee may possibly drive a locomotive for ninety minutes and then spend five hours and a half washing car windows, or trucking cases upon a freight-house platform. And the astonishing thing is that in this one instance at least the plan apparently is working.