“At sight it would appear that it [competition] has possessed certain advantages. It is found that in Great Britain, the only European country where different routes between the same important centers exist to any great extent under separate management, the train service is more complete than anywhere elseexcept France[the italics are my own] and the passenger-fares are by no means particularly high. But when we remember that Great Britain was the first country to develop railways and so got a long start of the rest of the world, and that the population of Great Britain for each unit of area is much greater than that of any other big country—more than twice as great as that of France, and half as great again as thatof Germany—we see that there are other causes to which these effects may be ascribed.“No conditions of this kind, however, tend in any way to show that competition, if attainable, is incapable of producing good results on railways at the present time. Far from it; railways present so many possibilities of improvement that if any really effective means could be discovered of inducing their managers to make bold experiments, it is more than likely that the best results would ensue. As has just been remarked the facilities offered to passengers are certainly on the whole greater in Great Britain than elsewhere, and in conjunction with—probably in consequence of—this, it is found that the passenger receipts per head of the population are approximately twice as large as they are in France or Germany.“On the face of it then there is a very good reason for supposing that the receipts increase with the facilities offered. Now the two things above all others that passengers may be expected to care for are reduced third-class fares and increased speeds. If railway managers, animated by some real spirit of competition, were to offer these advantages, it is possible and even probable that travel would increase so much that the railways, besides conferring a great boon on their customers, would themselves secure large benefits.“As regards the goods traffic, the definite elimination of all competition would be likely to have the result of doing away with several unsatisfactory features of this traffic. Even though there is ostensibly no competition in rates between the different companies serving the same points, there can be no doubt that the fear of losing traffic has frequently induced railways to make concessions of various kinds to traders, the results of which have been to give more or less secret rebates to the traders in whose favor the concessions were made.â€
“At sight it would appear that it [competition] has possessed certain advantages. It is found that in Great Britain, the only European country where different routes between the same important centers exist to any great extent under separate management, the train service is more complete than anywhere elseexcept France[the italics are my own] and the passenger-fares are by no means particularly high. But when we remember that Great Britain was the first country to develop railways and so got a long start of the rest of the world, and that the population of Great Britain for each unit of area is much greater than that of any other big country—more than twice as great as that of France, and half as great again as thatof Germany—we see that there are other causes to which these effects may be ascribed.
“No conditions of this kind, however, tend in any way to show that competition, if attainable, is incapable of producing good results on railways at the present time. Far from it; railways present so many possibilities of improvement that if any really effective means could be discovered of inducing their managers to make bold experiments, it is more than likely that the best results would ensue. As has just been remarked the facilities offered to passengers are certainly on the whole greater in Great Britain than elsewhere, and in conjunction with—probably in consequence of—this, it is found that the passenger receipts per head of the population are approximately twice as large as they are in France or Germany.
“On the face of it then there is a very good reason for supposing that the receipts increase with the facilities offered. Now the two things above all others that passengers may be expected to care for are reduced third-class fares and increased speeds. If railway managers, animated by some real spirit of competition, were to offer these advantages, it is possible and even probable that travel would increase so much that the railways, besides conferring a great boon on their customers, would themselves secure large benefits.
“As regards the goods traffic, the definite elimination of all competition would be likely to have the result of doing away with several unsatisfactory features of this traffic. Even though there is ostensibly no competition in rates between the different companies serving the same points, there can be no doubt that the fear of losing traffic has frequently induced railways to make concessions of various kinds to traders, the results of which have been to give more or less secret rebates to the traders in whose favor the concessions were made.â€
I have quoted Lord Monkswell in some detail because his remarks, made upon the British railway situation eight yearsago, are so pertinent and applicable to our American railroad situation of this moment. He has seen the rise and the decline of competition upon his home island. And we too have seen its rise and its decline, upon the North American continent.
Return for a final moment to the British regional grouping plan as it has finally been effected by Parliament; some of the many details are vital to us because they are details that before long we shall be compelled to face in the remaking of our own national railroad structure. The Railways Act over there, after outlining rather precisely the geography of the regional grouping, sets up an Amalgamation Tribunal, consisting of three commissioners, who will approve and confirm the amalgamation schemes submitted to them. This tribunal is to be a court of record and is to have an official seal. Its decisions are subject to a review by the Court of Appeal, whose decision is to be final, unless it gives leave to carry it up to the House of Lords itself.
It is expected that the work of this tribunal will be finished early in 1923, so that the new groups may begin active operations upon July 1 of that year. At one time it was suggested that the entire scheme be made operative upon July 1, 1921; the whole thing was suggested by the minister of transport as early as June, 1920. But that was obviously far too short a time. The railway companies would have none of it. They wanted it to begin not before January 1, 1924, and have nearly had their own way in the matter.
For it need not be supposed that the bill was adopted without contentions. These were many and some of them were bitter. The Scottish question was but one of several vexing sub-problems. A good many of the British railway men looked upon the rate return to come from the proper fixing of the tariff charges in each of the groupings as quite too low. The fact that it was the equal of 1913 has meant little or nothing to them. That year returned but 3.64 per cent. to the average British railway share, and some large holders of these securities feltthat they should have a much bigger return upon their investments.
Yet to go further into this vexing point would involve an intricate study of British railway capitalization. It is enough for our point now to say that it is large, extremely large, per mile as compared with our American capitalization. Those people who have made it their particular business to shout upon watered stock and bonds of our roads will have interesting food for thought if they will study the capitalization of railways overseas; particularly so if they will consider that the preliminary valuation reports of the Interstate Commerce Commission show many of our carriers as possessing an actual property value well in excess of the combined securities issued against it.
The entire field of British railway operation offers many valuable and suggestive hints, even to a nation as supposedly expert in railroad operation as this. It is not possible in the limits of a single chapter to go into all of these. Among them is the development of electrification upon the standard lines of Great Britain; despite a seemingly slow progress in this great work (but 365 miles out of 24,500 being operated by electricity at the moment) it is known that a group of distinguished American electrical engineers has been engaged for some time past in devising a scheme for the operation of every mile of British railway by electric power. Others are the exquisite simplification and economy of her terminal operation and the facility of her small goods-wagons for short-haul traffic. These are all interesting. Yet, the single phase of her regional development so far outranks even these as to demand an almost exclusive attention.
France has led the way, has proved almost beyond doubt the value of the regional system; Great Britain now falls in line. The United States will be next in turn. Because the possibilities of the extension of this, the greatest of immediate railway economies, are so vast in this land of huge railroad development I shall leave their description until later. ThenI shall endeavor to show how as a nation we can all benefit—railroad patron, railroad shareholder, railroad employee alike—by the extension to our national transport machine of a plan which is so ingenious, so genuinely economic, and yet withal so simple as to make it a bewildering wonder that our biggest railroaders did not come to it long ago. That they did not is rather a sad commentary upon their vision—or lack of it.
THE REGIONAL RAILROAD AT HOME
Nearlysix years ago I began a careful study of the possibilities of a regional railroad development within the United States. At that time I had not visited Europe. Yet a fairly thorough knowledge of the general plan of her railway organization, acquired through a process of careful reading, had made me cognizant of the regional plan as it exists there; particularly of the Frenchréseaux. It was then apparent—well before our entrance into the World War—that the scheme of organization upon which our roads had been upbuilt for eighty-five years was approaching the end of its usefulness. Over-consolidation, the decline of real competition between the separate carriers, the increasing unintelligent interference of government with the minor details of railroad operation, the decline of morale—each of these things separately, all of them together, bespoke the slowly approaching end of our old order of railroad things.
What was to replace it? Government ownership? Some of the people who in 1916 had a stray thought or two that the state ownership and operation of our railroads might not be such a bad thing after all, by the end of 1920 were pretty well disillusioned. At the beginning of this book I reviewed in some slight detail the achievements and the failures of the United States Railroad Administration. It proved that in the centralization of an entire railroad structure of this land certain great operating economies might be accomplished; it also proved quite as definitely the fact that our 265,000 miles of railroad consolidated into a single structure was far too clumsy and too unwieldy for any sort of efficient operation whatsoever.A paradoxical statement in sound, but one in fact quite accurate.
Three years ago I attempted the fabrication of alternative railroad centralization and decentralization schemes. In the one I bowed abjectly to our great American god of competition. To the limit of my ability and knowledge I recognized banking control, natural traffic routes and breaking points, and interlocking directorates and ownerships. On paper I laid down a number of “competitively consolidated†railroads—not more than twenty, or at the most twenty-five,—for the entire United States. I linked widely separated roads because they already had linked themselves by joint ownership; I split New England in twain, giving the New Haven to the Pennsylvania and the rest of her railroads to the already overburdened and somewhat unwieldy New York Central. Such moves followed the logic of Wall Street. The comfort and convenience of Boston mattered not at all. Did she not have competition? What mattered it that under such a plan the Baltimore and Ohio, the Erie, the Lackawanna, the Lehigh Valley, or the Canadian roads would have no entrance either to her or to the fine industrial territory about her, save over the rails of competitors? That was a mere detail!
And while Boston might have the competition of two roads, little of the rest of New England would. As I have already said in this book, railroad competition may be the industrial necessity, nay even the very breath of commercial life, to such fine manufacturing towns as Rochester or Akron or Dayton or Grand Rapids, but how about such fine manufacturing towns as Bridgeport, New Haven, Hartford, and Providence? Are they not also entitled to the breath of commercial life? Yet to give these four big typical New England towns railroad competition would mean the complete dismemberment of the compact New Haven system—an almost utter impossibility. Southern New England is already pretty tightly set as a simon-pure railroad region. It can be regarded as nothing else.
So I tore up my “competitive consolidation†plan and beganwork trying to place the entire country on the simon-pure regional idea, beginning with New England, which can easily be considered as a single region even though Boston shudders at the mere thought of such a thing. And in fact from the point of view of better operation New England would far better be divided into two regional railroads, each with its headquarters in Boston. One of these roads would embrace the Boston and Albany and the roads south of it, the New York, New Haven, and Hartford and its controlled properties, the Central New England, and the New York, Ontario, and Western. Incidentally this last road is something of a teaser in any regional planning. From Campbell Hall, New York, where it connects with the Central New England and the New Haven (by way of the Poughkeepsie Bridge) down to Scranton and the heart of the anthracite district, it is an essential part of New England’s railroad system. From Cadosia—where the Scranton branch diverges from the present main line—north to Oswego it decidedly isnotNew England. There its value is very questionable, even for local traffic. From Oxford to Oswego, in any new order of things, it might either be given to a combination of the Erie and Lackawanna or else to the New York Central—neither road probably would be bidding for the opportunity.
Return to New England. Just as the present Boston and Albany would make a good east and west main-stem from Boston through Massachusetts to Albany for our newly created Southern New England Lines so would the erstwhile Fitchburg perform a similar office for the Northern New England Lines, which would include the Boston and Maine, Maine Central, Rutland, Central Vermont—probably, as to-day, right through to New London—and the Bangor and Aroostook. There would be left when this was done but two separate or “foreign†roads in the New England territory. And these would be “foreign†in the fullest sense of the word—the Grand Trunk (just now being absorbed into the Canadian national railroad system) and the Canadian Pacific, which reach across Maine toward Canada’s winter ports uponthe Atlantic; Portland, St. Johns, and Halifax. It is not conceivable that these lines would be disturbed, any more that we should wish Canada to disturb the important links of the Michigan Central and the Wabash across the southwest corner of the Province of Ontario.
A good many people attempting this very difficult problem of regionalizing the railroads of New England have attempted to leave the Boston and Albany out of their calculations, which not only spoils the picture but makes the entire regional plan almost utterly senseless. Others doing the same thing have attempted to balance matters by giving the New Haven to the Pennsylvania, which is perhaps a little worse. That distinguished student of American railroads, Professor E. Z. Ripley of Harvard, who undertook recently a regionalization scheme at the behest of the Interstate Commerce Commission, fell into no such error. He gave New Haven to the Baltimore and Ohio, and I suspect did it knowing full well that the Pennsylvania, having been offered the New Haven long ago and having refused it, would probably not have a change of heart in the near future.
In its recent close new traffic alliance with the New Haven—an alliance whose outward expression consists very largely of some new through trains and sleeping-car services from New England by way of the Hell Gate Bridge and the Pennsylvania Station in New York City—the Pennsylvania undoubtedly has all of the New Haven that it can easily digest. Broad Street cannot be anxious to undertake the management of the Litchfield branch in Connecticut, or the Chatham one down Cape Cod way.
Yet I hear you asking Professor Ripley, if the Pennsylvania does not want to buy the New Haven, how much more so would the Baltimore and Ohio, whose terminals in New York are weak and whose finances generally are in a far more precarious condition, want to attempt the thing? Can the keen-minded Mr. Willard at Baltimore be more anxious than the keen-minded Mr. Rea at Philadelphia to undertake themanagement of jerk-water branches in Connecticut or in Rhode Island or down on Cape Cod? In answer to all of which a Harvard eye of deep wisdom would be winked. Mr. Ripley knows well that the New England railroad should be purely a regional railroad—or two regional railroads—and yet I think that he would be quite willing to embrace the suggestion of the Boston banker that its ownership—not an enviable honor to-day or apparently for many days to come—should be divided between the three or four or five trunk-lines that it serves.
This entire question of the probable ownership of the regional roads I have left until the succeeding and final chapter of this book. I do not agree in the opinion of many bankers that the regionalization of the roads should be attempted in a supine bowing to their financial results of recent years, and so should be based upon these showings. I believe that it should be based fundamentally upon the service needs of the communities that the regional roads of to-morrow will have to serve. The Southern Tier of the state of New York for too many years suffered set-backs from the fact that virtually its sole railroad servant was a historic line, which wholesale fraud had doomed to a lifetime of perpetual near-paralysis.
So much for New England. Such planning is typical of that which might be expected of any non-competitive regional plan. Along the entire outer or coastline rim of the United States the regional plan without compromise or variation works out pretty well indeed, all the way from the proposed Northern New England Lines that you have just seen out to the Californian railroad, or the Puget Sound Lines, which would immediately adjoin the Californian upon the north. Along the outer edges of the country it would be easy to devise. It is a pretty plan, and in its simplicity most beguiling. And yet when one comes to the center of the country this same simple non-competitive regional plan becomes almost utterly impossible. After all we are working with things as they areand not merely with things as we should like to have them.
A careful study of the rival plans—non-competitive regional and highly competitive regional—has led me to a firm belief that the real solution of our problem of railroad organization in this country lies in a compromise between them. Were we to start afresh to plan the railroads of the United States, supposing that not a mile of track had been laid down between the Atlantic ocean and the Pacific and that our vision was sufficiently Aladdin-like to foresee the present growth of the land (really built up upon that very railroad development), we might well have adopted a purely regional plan, as did the French so long ago. But much as we may admire such a theory we cannot entirely ignore hard facts—the important properties already built and well developed, the recognized making and breaking points of traffic, the individual morale and tradition of the several roads—the sort of thing that we have shown, despite all of its recent labor troubles, still so existent upon the Pennsylvania and some other roads.
So in compromise we use the purely regional idea where the purely regional idea best serves high theory and the broad pathways of hard fact and established principle. We begin in New England and there we create an autonomous regional railroad—probably two, for reasons which we have already stated—each as we have seen with headquarters in New England’s traditional capital, Boston.
Next we cross the Hudson River and tackle the great congested railroad district that lies between it and the thousand-distant cities of Chicago and St. Louis as a bloc. Here begins our problem in dead earnest. Shall we make two great regions of most if not all of it—the one to the north with the dark-green cars and the traditional name of New York Central, and the one to the south occupying all the rest of the territory down to the Potomac and the Ohio River with the wine-red cars and the traditions of the Pennsylvania? No, not unless we want to consider the operation of two great railroads of between twenty-five and thirty thousand miles ofline each. If we are to have any sort of intensive or good operation this is out of the question. With twelve thousand miles to be operated, each of these roads at times already flounders.
No, I think that we can do better than that. We can easily make four long narrow regions, stretching from New York about four and five hundred miles to the west, and to these give auxiliary regions, or rather regional railroads, further on, to Detroit, Chicago, St. Louis, and Cincinnati. The most northerly of these will be, of course, the New York Central, the unit management of which will be terminated or broken at Buffalo—as of other days—and to which will be handed the Delaware and Hudson, north of Albany, possibly the northern portions of the Ontario and Western, and some lesser properties. It might be possible to go even further and give the generally efficient even though somewhat unwieldy New York Central the Lehigh Valley, the Lackawanna, the Erie (east of Jamestown), the Buffalo, Rochester, and Pittsburg, and the rest of the Delaware and Hudson. But I hardly think that this would be practicable. We are trying, even in our theories, to keep our feet on the ground.
It would be better by far to take this last group and make it the second of our long, narrow northeastern regions—call it, if you will, the Erie-Lackawanna and place its eastern terminals at Albany, at New York, and, by means of the absorption of some sixty miles of the Reading, at Philadelphia too. This would make a well-balanced and compact group, fairly competitive and yet accomplishing great economies in the common use of trackage and terminals. The wastage in these things alone is hardly less than appalling, the opportunities for saving tremendous.
The third of this particular grouping of regions would be quite naturally the Pennsylvania. It too would be terminated as of other days, at Pittsburg, although, as we shall presently see, with its own auxiliary regional railroad it would go into the chief cities east of Mississippi.
And finally the Baltimore and Ohio! In an earlier plan, and in an earnest seeking for the simon-pure regional grouping of our railroads, I sought to thrust this historic property—not only one of the very oldest of our American railroads but the only one which has existed eighty years without a change of name or important change in its organization—into the melting-pot with its traditional rival, the Pennsylvania. But that would not go. Tho two metals refuse to amalgamate.
But suppose one takes the Baltimore and Ohio, chops it off at Parkersburg, at Wheeling, and at Pittsburg—as one did with the Pennsylvania—and adds to it the greater part of the Reading, the Central Railroad of New Jersey, the Western Maryland, and one or two much lesser properties. The result is a fairly compact property, sufficiently competitive in its reach to the larger terminal cities of its territory to appease those who must continue to bow the knee before that particular god of business, and yet enough unified to be easily handled from its traditional headquarters at Baltimore. That would seem to be more generally satisfactory than the obliteration of the Baltimore and Ohio, with its fine traditions, its good morale, and its general record of excellent service.
So much then for our four regional railroads to lie north of the Potomac, west of the Hudson River and east of Buffalo, Pittsburg, and Wheeling. How about the region that lies immediately west of these three last important gateway cities? Shall we consider those great railroad States of Ohio, Indiana, Michigan (the lower peninsula), and Illinois as a great single non-competitive region, in full accord with the high theory of the regional plan? No, not if we have any real regard for the feelings of the residents of those four great States. A single railroad for those four States might be workable, but I doubt it. I even doubt if you could operate successfully either a single railroad for either Ohio or Indiana. Illinois we shall leave out of consideration for the moment, while Michigan would probably be pleased as Punch to have herbeloved Michigan Central returned to her as her own regional railroad, with its eastern terminals, as of yore, at Buffalo and at Suspension Bridge and its chief western one at Chicago—a single, independent, autonomous railroad property with a genuine presidential headquarters at the very important city of Detroit.
It is south of Michigan that the problem complicates. And here it is that I can only see to-day, and for many many hundreds of days to come, the retention of a pretty generally competitive transport plan. Regions, yes, if we still like the sound of the word. But regions which interlace so that in reality the word becomes a good deal of a misnomer. The New York Central Lines West (formerly the Lake Shore, the Big Four, and the Pittsburg and Lake Erie and the Lake Erie and Western), reaching from the terminal of the parent property at Buffalo out to Detroit, Chicago, St. Louis, Cincinnati, and Pittsburg, would have a president and real headquarters at Cleveland; the Erie-Lackawanna West would consist of the Wabash (east of the Mississippi River), the Nickel Plate, the Erie (west of Jamestown), the Wheeling and Lake Erie, the Clover Leaf and the Bessemer and Lake Erie. The Pennsylvania Lines West would be virtually as they existed prior to the recent after-the-war reconsolidation, but with the addition of a needed feeder into Detroit; and finally the Baltimore and Ohio West would consist of its present property plus the Cincinnati, Indianapolis, and Western, the Monon, and the Hocking Valley—all with headquarters at Cincinnati. That interesting little cross-country road of the interesting Henry Ford, the Detroit, Toledo, and Ironton, might easily fit into the westerly region of the Pennsylvania, while the Baltimore and Ohio would be given at least a trackage entrance into Detroit over the Père Marquette, so as to keep it on par with its three regional competitors. The rest of the Père Marquette would be merged into the embracing Michigan Central.
Just as this region, almost immediately east of the Mississippi River, bids fair to remain competitive for an indefinitetime, so is the territory immediately west of that great stream also bound to remain competitive. Reserve the greater part of Illinois Central for future and separate consideration, and now come to that Middle West territory. Are we going to create simon-pure regions there and ignore the fine traditions of properties such as the Burlington, the Rock Island, and the Santa Fé? No, not if we have any real sort of wisdom. North of them the problem is far easier of solution. The Milwaukee will merge quite easily into the Northwestern; although to operate the combined properties through to the Pacific coast would require at least three separate regional organizations—the Northwestern, between Chicago and the Missouri River, the Montana Lines from there to Spokane, and the Puget Sound Lines from there to the actual shore of the Pacific. Into these almost purely regional systems would also be merged the Great Northern and the Northern Pacific. The Burlington’s line into the Twin Cities (St. Paul and Minneapolis) would cease to be. And in fairness to that road the Milwaukee’s lines to Omaha and Kansas City would be withdrawn from the new Northwestern combination and parceled out between Santa Fé, Rock Island, and Burlington. Into such parceling would also go the always perplexing Chicago Great Western and the extraneous arm of the Illinois Central between Chicago and Omaha, running at right angles to the main-stem of that important system and to a larger extent disassociated from it.
It might be found more practicable to bring Union Pacific directly into Chicago over the rails of one or the other of these last two properties (Union Pacific’s financial interest in Illinois Central already is a powerful one), although the Union Pacific’s operating heads would probably prefer one of the routes between Chicago and Omaha discarded by the larger Northwestern grouping; the present Milwaukee between those two cities is better built and so more easily operated than Illinois Central or Chicago Great Western. Union Pacific for a long time has felt that it has the same right as its chief transcontinental competitor, the Santa Fé, to a direct entrance intoChicago. In a way such as this it would be brought to a parity with the direct, although longer, southern route.
“But,†you interrupt, “how about Southern Pacific in such a case? It is also a pretty warm competitor of the Santa Fé.â€
To bring both Santa Fé and Union Pacific into the Chicago gateway as transcontinental competitors and bar out Southern Pacific would be indeed grossly unfair. I have no intention of doing anything of the sort. Cross quickly with me from the Middle West territory to the lovely Pacific coast. Here again we think clearly in our own terms of purely regional railroads. Two of them would occupy the extreme coastal district all the way from the Mexican line to the Canadian. The most southernly of this twain is the Californian railroad, a fine, dignified name for a fine, dignified railroad extending well beyond the bounds of even the great Golden State, north to Medford, Oregon, and east to El Paso, to Albuquerque, to Salt Lake, and to Ogden. Within this huge and rather sparse territory—sparse as compared in a rail traffic sense with the territories west of the Mississippi River—we should have an absolutely non-competitive railroad, but under strict regulation operated for the greatest good of the greatest number. That has been done before in California; it is being done to-day and most successfully. The Southern Pacific is usually most responsive to its huge non-competitive territory. It gives to it in most cases an adequate service.
New England lends itself to the non-competitive and highly economical regional railroad. So does the west coast too, but because of its giant sweep we give this last seaboard two regions, the one to the north of the Californian railroad, the Puget Sound Lines, extending, as we have seen, north from Medford, and west from Spokane as well as south from Vancouver, British Columbia, and northwest from Ogden, Utah.
East of these two great railroads—and yet neither of them too intensive for successful management by a single executive head—are the Colorado Lines, embracing roughly the main mass of railroad trackage within the State and extendingnorth to Cheyenne and west to Salt Lake, by way of the present lines of the Denver and Rio Grande as well as by the yet uncompleted Denver and Salt Lake. It is a far smaller region than the two we have just considered, yet a territory of a considerable traffic and, because of its location, necessitating the most intensive sort of operation.
Now we begin to get these roads running down into the immediate Southwest from Chicago and into their proper relationship—the Rock Island, with its lines from Chicago, St. Louis, and Memphis, coming together and reaching to El Paso and out to the Colorado Lines near the eastern Colorado border; the Santa Fé, taking the original Missouri Pacific between Kansas City and St. Louis for a much-needed entrance into the latter city and touching the Colorado Lines at La Junta and the Californian both at Albuquerque and at El Paso; the Burlington shorn of its Twin Cities line, but given either the Missouri Pacific west of Kansas City or the former Kansas Pacific (to-day a detached but well-built branch of the Union Pacific) or both and terminating both at the Colorado State line and, by the acquisition of the Kansas City, Mexico, and Orient and the building of a few hundred miles of railroad, with the Californian somewhere in the general neighborhood of Albuquerque.
Here is balance. Here is a fair adjustment between logical competitors, the retention of competition where it is not practicable to eliminate it, and its abolishment where it is feasible to uproot it and establish great operating economies in the wake of the change.
We are not quite done. We have hardly considered the South. It is very much entitled to consideration, with its great growth in the last few years and its wonderful opportunities of the immediate future. But because, like California, it still has its intensive growth in the future rather than in the past, it is not too late to bend it into the economic regional plan.
We left the Californian railroad with an important easternterminal at El Paso. El Paso is in Texas, even though it is barely in it, and so becomes quite the logical western terminal of the Texas lines, which would exclusively cover in our scheme virtually the entire State east from Beaumont, Shreveport and Texarkana and south from Dallas and Fort Worth. It might even be possible to give the Texas regional system a direct entrance into Kansas City by acquisition of the entire Kansas City Southern, but I would doubt the wisdom of this. It would have the effect of throwing the delicate competitive shading remaining about that very great railroad center considerably out of balance. For if Kansas City by direct line, why not St. Louis or even Chicago?
No, that would hardly do. The Iron Mountain reaching in a splendid strategic position from St. Louis to Texas, shorn of its wretched mésalliance with the Missouri Pacific and given instead the Alton and certain portions of the ’Frisco and Missouri, Kansas, and Texas systems, would make an excellent feeder for the Texas Lines right through to Kansas City, to St. Louis, and Chicago, and still avoid the operation of too many miles or too attenuated a single system under one executive head. Meanwhile the competitive factor in the competitive territory which we have permitted to remain within the land would be appeased by the fact that the Rock Island, the Santa Fé, and the Burlington would also bind the Texas Lines to Kansas City, St. Louis, and Chicago. Our plan continues to balance, and to balance extremely well.
The Texas Lines would have still another competitive entrance into Chicago. We will take the Illinois Central—deleted, if you will recall, of its rather superfluous line to Omaha—and make it the main-stem and core of a far larger railroad which we may well give the more dignified and embracing title of Mississippi Valley railroad. From New Orleans straight north to Chicago, west to Beaumont, northwest to Shreveport and to Little Rock, possibly east to Mobile, and northeast to Birmingham—here is the making of a really dominating and yet very logical regional railroad. It also might and probablywould be both practicable and possible to make it live more closely to its name and give to it the line along the eastern bank of the upper Mississippi, between St. Louis and St. Paul, now operated by the Burlington.
There still remains the southeastern corner of the United States—and right here our problem reaches its final and most perplexing phase. Whether to rearrange it in two or three simon-pure regions or to have two or three competing systems within a comparatively large regional district is a question not easy of correct solution. I believe that the latter is the solution most likely to come, however. The inter-ownership of the Atlantic Coast Line and the Louisville and Nashville railroads is a factor not easily to be ignored. Ranged against this combined system—which in its final entity probably would include the Nashville, Chattanooga, and St. Louis and the historic Georgia railroad—is the huge Southern railway, upon which much thought and money has been expended within the last ten or twelve years, and which would meet it at virtually every important competitive point.
Only two other important railroads occupy this southeastern territory, south of Virginia—the Central of Georgia and the Seaboard Air Line. The first of these is the property of the Illinois Central and yet could not logically be made a portion of the Mississippi Valley railroad which we were outlining but a minute ago. The economic thing probably would be to parcel out these two properties, and several smaller ones, between the new Atlantic Coast Line and Southern railway combinations and finally retain for each of these their present valuable entrances into the City of New Orleans.
A great portion of the Seaboard Air Line lies in Florida, but Florida like New England and Texas and California lends herself quite readily to the absolute non-competitive regional plan. A Florida railroad would be touched by the Atlantic Coast Line and the larger Southern railway at Jacksonville, at Pensacola, and at intermediate points.
And finally, Virginia! She too lends herself to the regional plan, with the sole exception of the north and south lines of the Southern and the enlarged Atlantic Coast, the first coming north toward Washington through Charlottesville and the second through Richmond. The rest of the rails in both of the Virginias might very logically be grouped into a single great efficient system which would stretch from tide-water in the neighborhood of Norfolk back over the mountains to the Ohio River, and even beyond it to Columbus, to Cincinnati, and to Lexington. That the chief business of such a railroad would be the transport of coal goes without saying. With its vast combined water terminals in the neighborhood of Hampton Roads, it would be in a dominant position either for the export of its bituminous fuel or for its further shipment, both north and south, by the highly economical water lines along the coast.
Economy is indeed a watchword for this plan. I shall not attempt to take your time or dull your interest in its details by giving you too many of them. A very few single but rather typical examples of the savings to be made, were it ever to be placed in effect, will be illustrative. Here for instance is that so-called Southern Tier of New York—the long row of counties which lies for nearly two hundred miles against its Pennsylvania line. Many years ago the historic Erie pushed its rails through the Southern Tier. From its main line—originally built from Piermont-on-Hudson to Dunkirk, New York—it gradually shot branches north into the heart of the Empire State to Canandaigua, to Rochester, and to Buffalo. Eventually it made an interlacing of these branches, and in those days—when men hardly dared dream of the motor-car or the improved highway—the branches generally were profitable.
The Rochester branch, about one hundred miles in length, was typical of many of its fellows. It diverged from the main line at Painted Post, just west of Corning, and for thenext forty miles threaded a very rich and prosperous valley situated between deep hills. It was a small railroad but essential, and for many years it prospered, to a moderate degree at least.
Then in the early eighties there came a competitor through that narrow valley. The rich Delaware, Lackawanna, and Western, ambitious for a line of its own into the growing Buffalo gateway, in 1882 and 1883 laid down its rails alongside the Erie—along the main line all the way from Great Bend, Pennsylvania, just a few miles east of Binghamton, New York, to Painted Post, and along the Rochester branch as far as Wayland. The new railroad was a main-stem; double-tracked it gave frequent and swift service. The little Rochester branch line of the Erie shriveled up and all but died.
In the regional organization that you have just seen me outline, I have brought together the rich Lackawanna and the poverty-stricken Erie, along with the Lehigh Valley, the Buffalo, Rochester, and Pittsburg, the southerly divisions of the Delaware and Hudson, and the Ulster and Delaware railroads. It takes no large amount of imagination to forsee that such a combination—and most railroad executives and broad-visioned bankers will agree that it is a logical one—can greatly simplify operation in southern and western New York and abandon miles of railroad that should have been abandoned many years since.
In effect, this Erie-Lackawanna system would have at least two separate main lines from its combined terminals at New York (how effectively these might be combined we discovered when we saw the possibilities of the electrification applied to the suburban traffic of the New York metropolitan district) all the way to Binghamton, a little more than two hundred miles distant. From that point west to the brisk small city of Corning the traffic could be consolidated upon one of these main lines, possibly three-tracked or four-tracked, and the other abandoned—a quick and easy solutionof some perplexing grade-crossing problems in the communities that it would thread. Similarly the old antiquated Rochester branch of the Erie could be abandoned all the way from Painted Post to Wayland. The parallel double-track would render it of no further use.
I could take the atlas maps of western New York and show you many, many more miles of railroad which could be abandoned profitably to-day, not to the hindrance but to the positive benefit of the communities which they are supposed to serve yet no longer serve, efficiently at least. But let us turn our attention from trackage to terminals and for the moment consider the chief city of western New York—the chief in size at any rate, Buffalo. Twelve steam railroads to-day enter Buffalo and share four main passenger-stations there. The Lackawanna has a handsome new terminal at the harbor-front, into which enter not only its trains but those of the Buffalo, Rochester, and Pittsburg and the Nickel Plate lines. The Lehigh Valley has an almost equally new and handsome station, which it shares with the Grand Trunk. The Erie plays the lone hand in a very ancient building, while the New York Central, the Pennsylvania, the Michigan Central, and one or two other roads are housed in the Exchange Street Station, which is fairly antediluvian in its antiquity and its inefficiency.
For some years Buffalo dreamed her dreams of a real union station, which would rise majestically from the lake-front in the neighborhood of the historic court-house and jail where Czolgosz, the assassin of William McKinley, met his trial and his just fate. Travelers who have had to pass through Buffalo and who have been compelled to change from one railroad to another there shared these dreams of a station into which all the trains should pass. But the city authorities and those of the railroads came to an absoluteimpassein the matter. The New York Central, for instance, did not want to continue backing its through New York-Chicago passenger trains into the Buffalo station. It proposed as a compromisea union station somewhere east of Clinton Street. But “somewhere east of Clinton Street†isdéclasséto Buffalo, and the big lake-front town would have nothing of that.
So while mayors and general managers and high-priced engineers and all the other bigwigs stormed and argued the Lackawanna people and the Lehigh Valley people went right ahead and built their own passenger stations. It is not conceivable that these large handsome stations would now be abandoned. In the creation of the regional plan it is not necessary. It becomes obvious from the beginning that the many trains of the Erie-Lackawanna would easily fill the Lackawanna Station to repletion and permit of the final abandonment of the ancient Erie passenger-house with one of its most exasperating rail grade-crossing problems in the land as a perplexity always attendant upon its operation.
The Lehigh Valley Station, but slightly enlarged in its head-house accommodations, can easily be brought to meet the necessity of the other regional systems entering Buffalo—those of the New York Central, the Michigan Central, and the Pennsylvania. For it so happens that the present train-shed of the new Lehigh Valley passenger terminal lies parallel with and immediately adjacent to the tracks and platforms of the old Exchange Street Station of the New York Central. To make the head-house (the passenger, baggage, mail, and other facilities) of the Lehigh Valley Station accommodate the trains that now enter Exchange Street would hardly involve more than a rearrangement of these last groups of tracks and platforms, at an astonishingly low cost and with an astounding degree of operating saving—this last a factor which seemingly enters but little if at all into the calculations of the men who design our dazzling new American railroad stations.
Economy enters into the operation of a passenger terminal as it does into that of a freight terminal—and what can be accomplished in this last direction we already have seen. The upkeep of the passenger, baggage, and mail facilities of arailroad station—even one upon a comparatively simple scale—will come to a large figure in the course of a twelvemonth.
Rochester is but seventy miles distant from Buffalo. It is entered by six steam railroads, which occupy five separate and distinct passenger stations. McAdoo brought this down to but four, yet recently the Pennsylvania decided that it could no longer share the occupancy of the handsome and commodious station of the Buffalo, Rochester, and Pittsburg, so it reopened its former individual passenger station, for three trains in and three trains out each day. We do not have to go as far as Vancouver to see the essential waste of the pride of the competitive system.
Rochester is a city of a little more than 300,000 persons. Two stations, anyway—two of the existing stations—and possibly but one—the excellent new station of the New York Central—would serve all the passenger needs of both her steam and her interurban electric railroads, and with no more than the slightest trackage rearrangement. And at an operating economy, as well as an economy to the purse and time of the average traveler who must cross the city from one road to another, that is not capable of quick estimate.
Cleveland has just embarked upon an extravagant union station project which, after all is said and done, is not to be a union station. For some of the more sensible of the railroads who come to her have refused to be beguiled by so obvious a real-estate scheme and one involving huge expenditures at the very time when the average American railroad is pleading poverty and reducing its expenditures because of that plea. The huge capital expenditure of that proposed new Cleveland passenger-station might be saved in a large part, and still that enterprising city be given a fine passenger gateway that would express worthily her great pride and her great wealth.
I have always had a feeling that with foresight—andan abolition of foolish competitive pride—the huge capital expenditure already made and yet to be made upon the new Union Station of Chicago could have been very largely savedby an enlargement and an adaptation of the existing passenger terminals of that city. The Northwestern for instance has a head-house out of all proportion to the train-house. A second train-house could easily have been built alongside of the present one without the real necessity of adding to the main frontage of the station upon Madison Street. Unquestionably new and much larger stations were and still are needed both at Dearborn Street and upon the lake-front. But these new stations will be needed even after the completion of the so-called Union Station, at an expense now estimated at well in excess of $50,000,000. These other stations could have been built to a larger size without the expenditure of the $50,000,000, and the Chicago Union Station permitted to become a matter of history.
It is useless, it seems to me, to stress too heavily the wage of the American railroad employee when gross capital expenditures of this sort have been made and are continuing to be made; or the rate of the traffic return. Our railroads have been far too greatly burdened by these gewgaws. Once in a while, of course, a station comes along, like the new Grand Central Terminal in New York, which is the fruition of a positive genius. If all of our passenger terminals had the economic strength of the new Grand Central it would not have been necessary to write these paragraphs. And I do not think either that it would have been necessary to raise the passenger-fares far from their before-the-war levels. But when one balances one Grand Central against a baker’s dozen of Washington Terminals (with that overhead and operating cost of thirty-four cents a passenger) he sees at once the genuine value of that one Grand Central.
I can have no quarrel with the fine civic spirit that demands that the railroad station of the modern American city shall be the full architectural expression of its progress and its growth—in truth a city gateway. The exquisite monumental concourses of the Pennsylvania Station, the new Grand Central Terminal, and that at Washington have not been lost upon me,while the somber but ecstatic beauty of the interior of the Kansas City Station—to say nothing of the wonderful toys in Fred Harvey’s drug-store there—gives me a new thrill each time that I pass through it. But it does seem that we might sometimes use a little more sense and judgment in the planning of these stations. Monuments are quite all right in their way, if they do not cost too much to build and to maintain. Again let me illustrate.
When we were considering the electrification of the standard steam railroad in the United States in general, and the Boston suburban zone in particular, I called attention in a brief word to the fact that electrification would vastly increase the passenger capacity of the two great terminals of that city—South Station and North Station. I did not stop then to tell in detail of what it might mean to both of those two civic gateways, already badly crowded in the rush hours of the morning and the evening; of how it might avoid for twenty-five years or more the somewhat imminent present-day necessity of tearing them down and replacing them with far larger stations, at a huge capital expenditure. In South Station the fact that its builders of a quarter of a century ago had the wisdom and the foresight to place underneath the train-shed and head-house loop terminal tracks for future electric operation (tracks and platforms which have never been used and whose very existence is not even suspected by the majority of the people who use the station daily) might defer this necessity. At North Station the time for imperative and radical enlargement is close at hand, unless warded off by an electric installation upon most if not all of the many suburban lines that now enter that busy place.
Also in these chapters have I likened New England, in both its topography and its traffic problems, to Old England. Now may I go further and see in Boston fairly accurate replica of London, not alone in appearance—and that it is, with its Christopher Wren churches, its medley of old-time streets, its little parks and squares, and its general appearanceof staid sobriety—but in its own local problems of transport. Into London come the tens of thousands each business day by surburban train, both steam and electric. Yet London has no station in size comparing with the North or the South Stations of Boston. Even Liverpool Street and Waterloo, which come the nearest, fall far short in mere physical bulk, though not in train operation. Yet I am thinking of Victoria—that marvel of conciseness and terminal operation.
Victoria—both of the stations that rest side by side and share the name in common—seemingly is no larger than the Broad Street or Market Street Station in Philadelphia. The combined station certainly is not as large as Broad Street, barely larger than Market Street. Yet in each business day more trains arrive and depart from its train-sheds than either at Broad Street or at Market Street.
How is this done? In the beginning the British railway man does not feel that when he builds a railway terminal he has to provide a great congregation place for the people. There is of course at great interchange points in the heart of this country—such as Kansas City or Atlanta or Cincinnati or Omaha or St. Paul—a real need for abundant waiting-room capacity where through travelers may be properly housed between their trains—for a number of hours, if need be. At more strictly terminal or near-terminal points such as Philadelphia or New York or Boston this necessity largely disappears, and the space that is taken by huge waiting-rooms can better be used by more essential station facilities.
Victoria Station does not exceed ten platform-tracks in width. To handle more than 300 trains a day within this limited capacity means the very highest efficiency in train handling. Not only does it mean the maximum of promptitude in loading and unloading the trains but an adaptation of their schedules wherever possible so that an incoming train bringing passengers into the station is used for a regular run taking other passengers out again, and so the necessity of an “empty movement†into the storage-yards and back again is avoided. Moreover thevery arrangement of the tracks and platforms themselves leads to efficiency in these things.
When but a few years ago it became necessary to enlarge radically the capacity of the side of Victoria Station belonging to the London, Brighton, and South Coast railway the engineers found that they would have to think twice before they accomplished their purpose. The station was but six tracks in width, divided into two groups of three tracks each—two of these alongside the platforms, with a middle one reserved for the switching of the locomotives backwards and forwards. It was not possible to increase this limited width. Upon the one side stood an important through street of London—Buckingham Palace Road—and upon the other the equally immovable twin-station of the Southeastern and Chatham railway. Therefore the engineers did the one thing possible, short of the enormously expensive job of double-decking the station—they lengthened it, and at a comparatively low cost doubled its capacity.
To-day two long trains, standing one behind the other upon the same track, may load and unload their passengers at the same time, and without the slightest confusion or difficulty. The high-level platform (the station-platform at the same height as the floor of the train), which Parliament forced upon the British railways many years ago, is a tremendous help to quick entraining and detraining. Why it has not been more universally adopted in this country it is hard to understand. It is in successful use both in the Grand Central and the Pennsylvania Stations in New York, but at very few other points. And this despite the fact that in order to serve these two highly important stations virtually all the Pullman equipment in the country now has been adapted to high-level platform use. Yet only the Pennsylvania has had the courage and the vision to adapt this very sensible form of platform to its intermediate stations. It already has become a standard upon that great railroad.
That the adoption of a regional railroad system for this country would bring this and a hundred other neededimprovements—both greater as well as smaller than these of the economical passenger terminal—I am not attempting to argue. But I do believe that the regional railroad system, with its setting of the competitive phase in its proper position in relation to the conduct of our roads, would be a powerful factor in bettering present conditions, and in a way that would bring wholesale operating economies all the way across the land. This, in turn, should be translated most promptly to the public in two ways—lowered rates and bettered service. Here then is always the nub of the situation; railroad efficiency accomplished through operating efficiency, not necessarily wage reduction but reduction in other costs as well, as long as they may be accomplished without detriment to the service. The service upon our American railroads has long since been reduced to a point where their actual efficiency and value as public servants have begun to be impaired. From this time forward we must begin to puzzle out how their service may be bettered, and there is no better way for this than that which lies within a real correlation of their activities.
THE UNITED STATES RAILROAD
Toassume infallibility or even great accuracy in sketching a regional railroad plan for the United States would be of course ridiculous. We have just had the mere suggestion of twenty-five or twenty-six railroads, some of them non-competitive monopolies and others quite completely competitive, in form at least, which is about all that our so-called competitive railroads are to-day. Still the great transport god of our transport world apparently must continue to be appeased. Form seems to please him. We shall grant him that. But in a national transportation plan which begins to assume any real form of high organization we shall not permit the component parts of it to indulge in internecine struggle. It is too expensive business.
So probably we shall begin the operation of our regional plan, which you already have seen outlined geographically, by first taking our thousand or more separate railroads—nearly 265,000 miles of line—and thrusting them together into a great single organization. This we might easily call the United States Railroad, even though it is to be in one sense not a railroad, from an operating point of view at any rate. For once we have centralized our great rail transport plant, we shall at once begin to decentralize it. We shall make many railroads of it. We shall follow in the main the scheme used by those vastly successful private organizations, Standard Oil and the Bell Telephone, and the equally successful government institution, the Federal Reserve Bank, and set up regional and highly autonomous separate organizations. I began my planning of the regional railroad for this country with the number ofseparate units fixed at about the same as of these three organisms that I have just mentioned—approximately an even dozen. Gradually I found, however, that in as intricate or as extensive a business as railroading in the United States twelve or fourteen or even sixteen regional companies would not be enough. Perhaps twenty-six is not even enough. After all, that is but a detail. What we really are seeking now is the proper method of organization.
Our regional railroads, recentralized and each provided with a president and other directing and operating officers extremely local and sensitive to the territory which they would serve, would have left something behind them in the central organization which was created primarily for the business of rearrangement. For having transacted that immediate business the United States Railroad still would continue to exist as a permanent body, with its headquarters either in New York or in Washington. Its modus operandi would be the virtually continuous sessions of vice-presidents designated from its constituent railroads—one vice-president for each road, especially chosen for this purpose—together with the occasional meetings of the presidents and other executive officers. These men would form a congress whose powers along almost all phases of our national railroad would be virtually supreme.
Its greatest power—its greatest responsibility, if you please—would be the proper financing of our railroad structure. That problem is far too big to-day to be handled locally, even in the locality which we know as Wall Street, New York. And Wall Street has shown itself capable of taking care of some pretty large financing problems. Before we are done with our railroad financing, it may be necessary for no less a hand than Uncle Sam’s to take hold of it, either by assuming the bonded indebtedness of the roads and against this issuing his own bonds at a slightly higher rate of interest, or else by direct and complete ownership of the carriers.
I am not going into this vexing and highly controversial phase of the railroad question in America further than to say that Ido not feel that this country is ready yet to accept government ownership and operation—particularly the latter. Please note that I have differentiated between these two. It is not often done. And yet in that very shading of difference may yet rest the solution of our entire railroad problem. At the conclusion of this book I shall refer to this again.
According to a man who has made a critical inspection of the outstanding securities of our American railroads and of whose ability and impartiality there can be no doubt whatsoever, these are represented chiefly in about ten billion dollars’ worth of perfectly good bonds and about five billion dollars’ worth of good stock, at least normally returning dividends. About $100,000,000 might be written off in poor bonds, that either are fraudulent or else never should have been issued, while there are four or five billion dollars par value of stock certificates which to-day may be regarded as fairly hopeless. Out of all these securities three quarters would assay, which after all does not compare so badly with the estimate of value of from $18,000,000,000 to $20,000,000,000 which the railroads themselves place upon their properties.
These “good securities†in normal time average a return of from $750,000,000 to $800,000,000 each twelvemonth. Suppose that our Uncle Samuel, heeding what seems to be a rather certain voice of his people at this time to avoid both government ownership and government operation, should arrange that the “good†stock of the present railroads be turned in for that of the United States Railroad, which might either keep the stock issue in its own name or else at the proper moment divide it pro rata between its constituent regional roads? This certainly would not be either government ownership or government operation.
Upon the stock portion of this trade our good Uncle Samuel would arrange to guarantee a 4 per cent. dividend annually (possibly 4½ per cent.) and try to standardize and pay a 6 per cent. one. That sounds a little different from the Transportation Act, does it not? As a matter of fact, it ishardly conceivable that even a 4½ per cent. guarantee would ever become a serious drain upon the United States Treasury, while the fact that the stock end of the capitalization of this railroad which is not a railroad would never be permitted to exceed more than 35 or 40 per cent. of the whole would be a real help in the situation.
If the roads that belonged to the United States Railroad found themselves earning more than 6 per cent. upon the entire property a tripartite even division could be arranged of the excess between their stockholders, their employees, and the Government. It is hardly conceivable, however, that such a condition would long continue without a demand arising for a downward revision of the rates. It is a question that would settle itself rather automatically most of the time.
The stock distribution of the new centralized company of the holders of the existing stock-certificates of the present companies would be in the ration of the new standard dividend of 6 per cent. to be paid by the U. S. R. R. to the dividends maintained by the present companies for an average period of a certain number of years before the adoption of the scheme. Thus the stockholders of the Santa Fé railroad who have been receiving 6 per cent. would probably have a chance to make an exchange upon even terms; those of the Northern Pacific, who have been receiving 7 per cent. would gain one and one sixth shares of the new stock for one share of the present. New York Central stockholders would have five sixths as many shares of the new stock as of the old.
“Do you think that many stockholders would be willing to exchange their certificates upon this basis?†asks my querulous old railroad friend from out of the West.
I do notthinkanything of the sort. I believe that they would have to form many lines to the right of the security-holders who could not get to the places of transfer quickly enough. Uncle Sam holding the bag? Uncle Sam’s credit back of our transportation system? Let me ask you, OldRailroader, if you have any fondness for Liberty bonds in your own strong-box?
While the stock would be called in and reissued, the bonds of the American railroads—between ten and eleven billion dollars’ worth and returning an average of 4.30 per cent. during the period of government control—would be called in, principal and interest, by the United States Treasury, and, as we have just seen, new government bonds issued against them—at just enough lower interest to make the thing a profitable banking transaction for our Uncle Sam.
The essentials of this plan are not my own. They are those of the Hon. George W. Anderson of Massachusetts, a most hard-headed and far-seeing jurist, who has had a remarkable experience in transportation law, including some years as a member of the Interstate Commerce Commission. I am putting it forward here for just what it is worth—nothing more. It is most interesting, and seemingly most workable. Judge Anderson and I differ, however, in one large essential. Trained Federal officer that he is, he sees centralization as the one panacea for the situation, which is a characteristic attitude of the Federalist, from the days of Alexander Hamilton until these.
I believe myself that the United States Railroad, should it be found necessary to incorporate it, should be made a Federal corporation and nothing else. The State charters of the present-day railroads would be made virtually null and void once the roads ceased to operate as separate concerns. It is possible, I will admit, that litigation might arise in regard to this delicate point. But in the steady decline of States’ rights in all our political life I can have no great anxiety as to the final outcome of such litigation. Apparently the Federal Government and not the separate State has the power to-day.
I hold myself that once the centralized organization has been created—and I shall refer to its opportunities again in a moment—prompt decentralization is quite as essential to the situation. The Boston and Albanys, the Lackawannas, the Bessemers, allthe other successful small railroads of our present-day situation arise to bid me go very easily indeed when I suggest any national centralization of actual operation or of the actual relationship between the carriers and their workers. And Sentiment also crooks a warning finger. I know what she means by her glance.
It would be pathetic, nay tragic, to remove an American railroad name like the Pennsylvania or the Northwestern, to try to paint out the red cars of the one line and the yellow ones of the other. New York Central is too good a name to be scrapped. The same is true of Baltimore and Ohio. How can we prate of morale and then dare to take from under it the things that are its chief support? After all does sentiment count for nothing? And tradition? Have we not possibly become a little too materialistic a nation?
On the other hand Southern Pacific means but little to-day as the name of a railroad which reaches as far north as Portland, Oregon, and as deeply into the heart of the country as Ogden. The Californian railroad has a sense of dignity that ought to appeal to every man of that great State. Such a sense too has the Puget Sound Lines.
What’s in a name?
Everything. Sentiment. Tradition. Morale. Progress. Dollars and cents, if you will force me to be materialistic.
But the far greater thing to be gained is the intimacy of contact resulting by the location of a railroad president with large authority within but a few hours reach of the people that he is endeavoring to serve. Why should the man of Concord, New Hampshire, or he of Lewiston, Maine, have to go farther than Boston for the adjudication of even his most serious differences with the railroad? Or he of Madison or Racine further than Chicago? And when it comes to the contacts with his fellow-workers, how can a railroad president in our Federal capital city of Washington be expected to know ofliving conditions in Great Falls, Montana, or in Wichita Falls, Texas? Incidentally that is the chief issue upon which the Pennsylvania is to-day fighting the Railroad Labor Board in the courts. It wishes the right to meet its own workers, in its own way. This is real regional thought. The people in control of the Standard Oil and the Bell Telephone companies came long ago to bless the day when legislation embarrassing to them at the time, forced the regional system upon them. They now know its real advantages. The intimacy of labor control alone is worth all the trouble and all the expense.
There is little or no dispute among those who really know the situation that nine tenths of the solution of the railroad labor problem as it exists in this country to-day rests in better contacts between the employers and the employed. A predicament such as we saw but a little time ago—the general manager of a great railroad unable to get his proposals to his shop-workers—would hardly be possible in a road whose limits were not too great. A certain high executive of my acquaintance is going to take extreme exception to my suggestion that the regional trunk-lines in the immediate district between New York and Chicago be broken at Buffalo, at Pittsburg, and the Ohio River.
“I can sit in my office,†he says, “and each morning within an hour talk with each of my subordinate executives—in Pittsburg, in Cleveland, in Detroit, in Chicago, in St. Louis, in Cincinnati.â€
Yet that is just the trouble. Too many railroads in this country have been operated on the long-distance telephone principle. Ten minutes’ talk over a copper wire is hardly equivalent to a day of personal contact, once every ten or twelve or fourteen days. That the men who are at the very tops of our largest railroads have done wonders with the long-distance telephone I shall not deny. But I do not think that they have accomplished intensive railroad direction with it, or anything like intensive railroad direction. And I have not noticed themaccomplishing any remarkable results in bettering their relationships with their workers, or with raising the morale of their roads.
Yet just as regional operation and a pretty well divided regional operation, is essential to the best operating results in our American railroads, so on the other hand is centralization fairly vital to any large traffic or financial results.
It will be argued always against any plan for the centralization of our railroads that it makes an easy first step toward government ownership. Such argument is foolish. Yet if it might be good business for the Federal Government in some distant day to take such a step, why is it not good business to undertake it to-day? Particularly when it is in a position to command valuable governmental assistance in the taking of the step. Here is the real nub of this question.
For few practical railroaders will deny certain vast advantages to be gained by the complete centralization of our rail properties—not only in financing and in rate-making, but also in traffic solicitation and control, in expert staff study of mechanical and operating problems, and in the production of proper personnel, particularly for the filling of future executive positions. All of these functions and more too, the United States Railroad could and would undertake. In contentions which might arise from time to time between the regional roads, its word of decision would be absolute, its authority supreme. And nowhere is this more necessary to-day than in the vexed question of rates—particularly of freight-rates.
The expert traffic executives of this super-railroad would settle these rate questions, and be subject only to revisions, in the strict legal points involved, by the Interstate Commerce Commission, which then would become almost exclusively a high court of railroad law, in turn subject only to revision in its decisions by the United States Supreme Court itself. The traffic experts of the United States Railroad would controlabsolutely the routings of through business where it passed over the lines of two or more of the regional carriers. But as an immediate beginning the best construction step that they possibly could make would be the creation of a real scientific freight-rate structure for this country.