THE TWILIGHT OF COMPETITION

The distinguished Boston jurist who not so many years ago astounded and startled the entire nation by saying that he could save a million dollars a day in the operation of its railroads was quite right, even though not exactly along the lines that he then suggested. Mr. Justice Brandeis at that time proposed to accomplish his great savings—then roughly estimated at 2 per cent. a year upon the property valuation of the railroads of the United States—by radical operating economies. That these might be accomplished and in a large measure, I do not now doubt. In fact for several chapters past I have been trying to show some of the larger opportunities to be accomplished along these lines; economies that to-day might be effected upon our carriers were they possessed at this moment with the proper imagination and vision, aided by an Interstate Commerce Commission possessed of the same qualities. We have seen how, in a test long enough to be definite, the motorized terminals in the city of Cincinnati have saved the railroads there something more than a thousand dollars a day. This was just one typical congested American city. I have tried also to show how that plan, in the main at least, could be extended to other congested American cities. It would not take very many such terminal savings to make a fair fraction of the national economy once proposed by our distinguished jurist of the Supreme Court bench.

Similarly I have tried to show the economies to be accomplished in the most neglected field of our rail transport system, the branch line and local service: the electrification of lines, the introduction of the gasolene-motor unit, both upon the rails and off, the steady refinement of the locomotive, the development of the all-important container. Yet even these by no means represent the limits of operating economies yet to be attained upon the American railroad. There are many other operating savings that might be made and that are not being made to-day. For instance the field of a more scientific train movement through better signaling is of itself a most fascinating one. The second important function of a railroad signal—second only to its all-important one of safety to human life and to property—is to keep trains moving. It is a poor business man indeed who does not recognize the high value of keeping all of his moving equipment as nearly as possible in constant motion and in this way holding down the cost of his overhead.

There are two ways to direct the movement of trains. The first is the one still most commonly in use upon the railroad of the United States, by the written instructions of the train-order; the other is by the indications of the fixed signal—upon the open line, generally the automatic block. For train-order instructions the moving train must either slow down or stop completely, but with signal indications it may keep moving ahead at a good pace. In the one case time is lost, in the other it is gained.

This may seem in itself a small matter, but much multiplied it comes to a real saving indeed. On a single important division of a single important freight-carrying railroad—the Susquehanna division of the Erie railroad, 140 miles of double-track—a careful test was made of the savings accomplished by the installation of electric block-signals within the first calendar twelvemonth after they had been put in service, supplanting old-fashioned manual block-signals. Over that division in a typical year there move the huge traffic of 2,322,070,451 ton-miles.

Under the manual block the year before, the Erie’s train-despatching was by written train-orders sent by telegraph. The division was divided into two despatchers’ districts, two men for each district, four men for the division, for each of the three eight-hour tricks, or twelve men for the twenty-four hours, in addition to two chief train-despatchers. Moreover the Susquehanna division had employed in the twelvemonth immediately preceding the installation of its automatic electric blocks 136 signalmen at forty-six intermediate stations who had been paid $94,752 on the eight-hour day basis. Even then it had sought to economize by closing down a number of its block stations at night to make a little saving on its pay-roll, even though the net result was to make its blocks excessively long in those hours and so slow up and greatly delay its train movement.

Contrast this with a despatchers’ service of but six men—in addition, of course, to the two chief despatchers—for the entire division with no signalmen whatsoever (aside from the telegraph offices open at seventeen intermediate points instead of forty-six as of old, where the retention of an operator and the written train-order system was imperative), and we begin to see real savings. The Erie people took that first year of their automatic block operation and compared it with the twelve months immediately preceding when they had moved 2,137,868,274 ton miles of freight traffic over the Susquehanna division. With their new kink in scientific railroad operation they were able not only greatly to reduce their operating force but to increase their ton-miles per train from 254,054 to 274,217, a very considerable efficiency increase. In other words they not alone made the valuable saving in time from having fewer trains upon the line—the actual saving in that first year came to 697 trains—but an operating cost of $87,969. At the rate at which money was then worth, this was the interest on a capital investment of $1,759,380.

Project this to the entire main line of that railroad, 999 miles from New York to Chicago; remember that we have been considering but one 140-mile division of that main line, and savings begin to multiply. If the proportion of savings could be maintained the Erie would have been $630,000 ahead on its main line alone; if it could be carried to its branch lines too, the figure would run into a million dollars or more a year. Yet the Erie is less than a hundredth part of the route mileage of the railroads of the United States, of which a comparatively small part is yet equipped with automatic block-signals. To say that our carriers might save a hundred million dollars a year by the use of modern and scientific signaling alone would probably be a conservative guess. A million dollars a day, Mr. Justice Brandeis! It begins to look as if you had understated, not overstated the savings to be accomplished by our national transport.

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We have by no means reached our limits in operating economies. That our practical railroaders, under the fearful spur of a terrific demand for great retrenchments, have done much is not to be denied. In some things, notably the creation of the big car, the big locomotive, and the big train, they not only have accomplished marvels but to-day they have probably approached the extreme limits of efficiency, if indeed they have not already actually passed them. Recently they have increased the loading of the average freight-car and have speeded up its movement. On March 1, 1920, when the private operators took their roads back from the Government, they announced that they were going to try to make a “thirty-thirty” record—an average daily mileage of thirty miles (instead of the 22.3 which the United States Railroad Administration was then accomplishing) and an average loading of thirty tons (instead of the 28.3 tons which the Railroad Administration by almost superhuman efforts, including appeals to the patriotism of the shippers, had finally succeeded in reaching). Despite most unpropitious circumstances the railroad executives had virtually reached the mark that they had fixed for themselves when the industrial slump set in upon the land. And in a total movement of a million car-loads of freight a week (a fair standard for good business across the land) savings such as these are the equivalent of many new cars, particularly so at the times when our railroads find themselves short of freight rolling-stock. In an earlier chapter I showed how rapidly our total freight-car equipment has declined—in three years more than 125,000 cars. Yet the saving of but a mile a day in the operation of each car of our existing equipment is equivalent to the addition of 100,000 cars to it.

Our railroaders are expert already in the efficient use of the somewhat antiquated tools which they already possess. I have said long ago that man for man they are not excelled anywhere in the world in the small technical details of rail transportation. Their expertness was won in a hard school. Since that day, fifteen or twenty years ago, when the running expenses of our carriers began their long uphill climb, these men have been forced to great operating economies merely to make both ends meet. They have gone the limit in these savings. Now they must have more tools, bigger tools, finer tools. They must have electrification, better signaling, newer and larger terminals. Remember all the while that if they do not have them, and have them soon, it will not be the railroaders who will suffer primarily. It will be the communities that they aim to serve. Bigger and more modern tools will serve, it is true, to bring vast economies, but they will also help bring the United States a better railroad service, which is a point never to be forgotten.

To many of these suggestions your typical banker would reply that they were fine on paper but that in reality they cost money, a commodity in which the average American railroad is sadly deficient these days.

Yet what better way to obtain the money to pay for them than to announce the decision to adopt them with the sweeping economies that would follow in their wake? If A. is the village grocer and B. the local capitalist, and A. wishes to borrow money of B., does he go to him and talk this way?

“I’m sorry, B. but I’ve been up against it a good deal lately; they’ve put a lot of new and unjust rules upon me that tell me just how I must run every detail of my business. And things are going to get worse. I don’t see just how I am going to pull through with my worn-out equipment and all.”

A. never talks that way, not if he has any real hope of getting money out of the financier. He is more likely to argue after this fashion:

“Times have been pretty bad with me, to be sure, but I feel confident that I see daylight ahead. I’ve got to get some equipment, expand my business along lines that seem pretty sure to win, and turn some new tricks in my trade. Here’s one or two of them.”

That is the sort of talk that generally brings confidence, and with confidence, hard-cash loans. Our railroads might try a hand at it. If they should come with some pretty definite plans for the extension of electrification upon their properties, the modernization of their terminals, a better correlation between their service and those of the carriers upon the highways, the real development of the container system, better signaling, and all the rest of it, they might command better credit. Such things have happened. It is not unlikely that they would happen again.

There is one economy, however, that requires little or no plant expenditure—only vision for its introduction. All this while and I have not even touched upon it, the supreme economy which our national transport system may yet hope to accomplish.

For more than three quarters of a century we have had a great god in our American railroad policy—when we have had an American railroad policy. That god has been labeled “Competition.” That he is a false god I should not be rash enough to say, for he is a very popular one, whose dignity is not rashly to be trifled with. But like some other forms of monarch, no matter how popular they may seem to be, he is a very expensive piece of property. Heresy? Not a bit of it! Listen to me.

On the outskirts of Vancouver, British Columbia, two great railroad passenger-stations stand cheek by jowl. Each would easily serve a European city of half a million population. Stated in railroad terms it would not be difficult to operate from thirty to fifty passenger-trains each day in and out of either of them. Yet neither of these is the main passenger-station of Vancouver—that is the Canadian Pacific terminal down on the water-front, at which arrive and depart more than half of the trains that enter and leave Vancouver each weekday. At one of these two outer stations, that of the Great Northern, three trains enter and three leave each day: at its neighbor, that of the Canadian National, but two are operated in each direction. One can only guess at the overhead and operating coast for each passenger who uses these architectural extravagances. At the Union Station, in Washington, where monumental construction is a bit more justified, this cost for each through passenger is now thirty-four cents. The railroads that run in and out of our Federal capital must carry their passenger a considerable distance before they equalize and overcome this high terminal charge and begin to make a profit upon him.

It would be a matter of but slight cost and great economy to place a connecting track between those two Vancouver passenger-stations, consolidate the business in one, and abandon the other, as a passenger terminal anyway. It would have been a far greater economy never to have built either, but from the beginning to have operated the Great Northern and Canadian National trains in and out of the commodious and centrally located Canadian Pacific Station. A great capital outlay would have been saved.

Why was not this done, you ask? The answer is easy. Competition.

But Vancouver is in Canada, you insist. Very well; we shall hark to the vagaries of the Canadian railway situation at another time. For this come back across the international boundary. Spokane is not in Canada. It is a handsome, well-built city across whose civic heart there lies the disagreeable barrier of three trunk-line railroads; parallel and from one to two blocks apart. The right-of-way and station of any one of them could easily have handled the business of the other two. And not only would a large capital outlay have been saved, but Spokane would have been spared the existence of two Chinese-wall embankments through her business center.

Competition—a great god, indeed! It is competition that keeps alive the farce of separate passenger terminals upon the harbor “moles” of Oakland, despite the fact that the trans-harbor ferry-boats that serve them use the same common terminal at the foot of Market Street, San Francisco. Competition makes two elaborate passenger terminals in Seattle do the work of one; keeps three stations alive and eating up overhead and operation in Los Angeles; runs to its nth degree of extravagance in the small city of Tucson, Arizona, where a magnificent edifice in a park—at first glance you would be sure to call it the town’s Carnegie Library—serves as a competing passenger terminal for a railroad which runs but two passenger-trains a day in and out of it.

West, you say? All right, come East. Within the last two years there has been opened in the outskirts of the city of Richmond, Virginia, a very expensive and elaborate passenger-station development for which there was no call whatsoever. It is the so-called Union Station of the Atlantic Coast Line and the Richmond, Fredericksburg, and Potomac railroads and replaces the badly located and inadequate Byrd Street Station which they had used almost since the days of the Civil War. That Byrd Street Station deserved to be abandoned does not come into the question. The point is that there was no need whatsoever to build the elaborate new station away out in the outskirts of the Virginia city. For Richmond also had upon her Main Street a comparatively modern station already used by the Chesapeake and Ohio, the Seaboard Air Line, and the Southern railroads which, with a slight adaptation and enlargement, could easily have been brought to meet the needs of the two other roads entering the town.Why was this simple step not taken? Why not the large capital outlay saved? Competition. The Atlantic Coast Line felt that it could not have its trains entering and leaving the same station as its competitor in Richmond, even though it is doing that selfsame thing in Charleston, in Savannah, and in Jacksonville. Competition; competition and a little foolish pride.

“Pride; but not foolish,” says the big railroad executive, who stands at my elbow and whose eyes fall upon these paragraphs. “It is this sort of pride, the pride built up from competition, that long ago brought our American railroads to their high standards of service perfection.”

A pretty theory that, but will it last? What is the actual competition to-day between, let us say, New York and Chicago? They are two first-grade railroads of the highest type connecting these two chief cities of the United States and four more, of a second grade, yet in themselves quite excellent railroads. On each of the two first-grade roads there are five or six fine express-trains in each direction each day. Long ago we have seen in the pages of this book how each has one train making the journey in precisely twenty hours, to the exact minute, and how formerly these trains did the trip in eighteen hours, also to the precise minute. After the wise step of the lengthening of the schedules, these two American “super-trains”—I think that I may safely call them such—remained exactly the same on the two supposedly competing roads, despite the fact that the distance between New York and Chicago on the one is 911 miles and on the other 979. Why does not the Pennsylvania with its shorter route beat the New York Central on its schedules all the while? Is it because its mountain ranges take so much longer to traverse than the much advertised “water-level route” of the Vanderbilt system? Possibly, but I doubt it.

The real reason is that the schedules of all these so-called competing trains are regulated by agreement between the so-called competing roads. There is a multiplicity of these agreements. The Pennsylvania has its own rails between New York and Buffalo, the two chief terminals of the original New York Central road, but it may not advertise to carry through passengers between these two cities, in exchange for which the New York Central will not advertise to carry through passengers on its own rails between New York and Pittsburg, the two chief terminals of the original Pennsylvania.

Competition? It is a neat phrase.

Similar minimum passenger-schedule agreements rule the service between Chicago and the Twin Cities (St. Paul Minneapolis), Chicago and St. Louis, Chicago and Kansas City, St. Louis and Kansas City, Chicago and the Pacific coast points—elsewhere across the land. When a few years ago the Post-Office Department sought to establish a really fast mail-train service between Chicago and St. Louis—a train that would make the 283 miles in six hours—it found no enthusiasm whatsoever for the project in the four so-called competing railroads that connect those cities and who long before had fixed their minimum running time between them at a rather leisurely eight hours in order to suit the necessities of the slowest and the most roundabout of the four. Eventually the Post-Office Department carried its point and the Chicago and Alton to-day carries a through mail train from Chicago to St. Louis in six hours and ten minutes. But the regular passenger-trains still remain at the old slow running-time.

These instances might be multiplied. Have I shown enough now to make my point? When you go between New York and Chicago on either of the two highest-grade roads that connect those cities you ride on virtually the same trains—the Pullman equipment that each carries is standardized down to the finest details—at the same rates of fare, in the same running time, and in and out of passenger terminals equally advantageously located. The only deciding points between the two roads are such minor ones as whether you prefer the excellent griddle-cakes of the Pennsylvania’s diners or the excellent ham and eggs of the New York Central’s; the scenery of the Alleghanies or that in the valley of the Mohawk. Are these not rather fine distinctions to hold up as a real competition?

Competition did not bring the excellence of these trains, any more than it prevented the removal of their comfortable observation-cars a short time since, through agreement. Competition did not force the Santa FÉ into its wonderful equipment of overland de luxe expresses with their whole fleets of solid compartment-cars. Competition has never given the United States a through train from the Atlantic to the Pacific. We have to go up north into our rather thinly populated neighbor’s country, Canada, to find such travel boons. Competition has never given a really creditable service between New York and Montreal, the two metropolitan centers of the great sister nations of North America.

The idea that competition is an essential to real railroad service is gradually dissipating. People are coming slowly but very surely to realize that no public utility is in its essentials competitive. And this despite the fact that Congress through the expression of its Transportation Act has given a formal approval to the idea that the only thing that can save our sick man of America business is a retention if not an extension of our competitive system of railroading, through the adoption of a “competitive consolidation” plan. This is the scheme upon which the experts of the Interstate Commerce Commission have been engaged these many months past and of which the first outlines have recently been issued.

The very expression of this principle within the Transportation Statute shows that a huge extension of the size of our individual railroad units is now contemplated despite the fact, long since recognized, that many of them have already gone beyond the limits of efficient operating supervision and management. Upon this point alone a whole book might be written. It is sufficient here and now to say that, with a few exceptions that prove nothing whatsoever, the only railroads that are to-day being successfully operated in the United States are the small railroads (small in comparative sense at least), properties like the Boston and Albany, the Lackawanna, the Bessemer and Lake Erie, the Buffalo, Rochester and Pittsburg, the El Paso and Southwestern, to single out but a few—railroads operated as individual units and by men who are not only on their ground but in close and constant personal touch with every inch of it. That genius of American railroading, Harriman, more than a decade ago recognized this point when he began the decentralization of his railroad properties, placing five presidents upon them west of the Mississippi River, each with all but autonomous powers. The Pennsylvania has more recently recognized it in the construction of four regional systems within its giant property, each in many essentials a separate railroad and to a large extent separately operated. It has made good beginning but has not yet gone nearly far enough. The principle stands recognized, however, that you can reach a point and pass it where your obvious economies and strengths of centralization are offset by the disadvantages of having created a top-heavy and almost unworkable machine. There comes a point in the growth of any railroad system toward mere bigness where, like the locomotive and the box-car, efficiency is passed and inefficiency comes in again.

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In the Middle West there is a manufacturing city which in recent years has grown remarkably, both in population and in industry. In ten years the first increased from 35,000 to 99,000 people. It is served by two railroads, one a main line of an important Canadian property and the other the main line of a small and fairly local railroad. The lines of a very large American system are but fourteen miles away, cross level country. The first of the two railroads that actually enter X. is operated from Montreal, when it is not actually operated from London, England. Apparently it has not yet heard of the rapid growth of X., for it has done nothing whatever to increase its facilities to keep pace with that growth; even its officers rarely pay X. the honor of a passing visit.

The second of these two roads gets the business. Its headquarters are but sixty miles away. Its president, its general manager, its superintendent, and its traffic manager are vigorous young men who are forever running up to X, and dining or lunching with its Chamber of Commerce and its manufacturers—they call half of them by their first names. They are alert to the necessities of the town and of its people. But they operate a small railroad. They are not burdened with the detail or the worry of five thousand miles of line, or ten thousand or even twelve. It takes super-men to run systems such as these last. And (unfortunately, perhaps) we have not as yet bred super-men in the United States.

The road that is but fourteen miles away should have come into X. with its rails a full dozen years ago; it should, that is, if the competitive system is all that its friends proclaim it to be. But it, too, is managed from a city nine hundred miles distant. Its president is as near a super-man as I shall ever hope to know, but nine hundred miles is nine hundred miles, and the line that runs so near to X. is but a minor branch of a vast system that seemingly at least has hundreds that are more important. And so it loses the freight.

The mere statement that the large railroad cannot be operated intensively or otherwise successfully without personal contacts will be disputed bitterly. I shall be asked: How about Napoleon? Did he not succeed in inspiring a vast army with a morale that no other army before or since has ever had? Personal contacts were almost out of the question for him. Yet were there not men by the tens of thousands who had not even touched the hem of his garments or laid sight upon his countenance who gladly would have laid down their lives to save his?

To these questions the answer is that we have not as yet succeeded in breeding Napoleons very generally. We work with the clay that is within our hands. And our human clay works best at short range, and almost always the shorter the better. The president of a little railroad does not have to be a Napoleon to inspire confidence and affection and enthusiasm among his workers. Almost any real man will do, if the road is not too big. And he will merely need to know his men, to understand them, and to let them understand him.

If this is true in the technical operation of a railroad it is even more true in another great phase of its management—its salesmanship. Long-range transportation salesmanship is to-day a real fundamental weakness of our American railroad. Let me illustrate. Here is its competitor in the form of a local truckman coming along and, if you please, not keeping within his proper economic bounds, but soliciting business up to a hundred-mile or a 150-mile haul. He probably is “Tom” to his fellow townsman, a personality, a real human being, and not a mere machine. A corporation is always at a handicap. And other things being equal, or even a little against him, he gets the business.

In earlier chapters of this book I have set down what has seemed to be the real opportunity for the redemption of the branch-line and local services of our railroads, by the use either of small electric or of gasolene-motor units, but in all cases with such a frequency of headway as to render theirs a genuine service. Yet I would not give a fig for such a step if it could not be handled for the railroad by a competent executive right on the spot—no matter now how small his rank or title as long as he has real authority to go ahead or act. A canny minor executive of my acquaintance suggests that the average division superintendent should be given large traffic salesmanship authority. There are some things against such a plan, and many things in its favor.

But it seems to me that the installation of a motor-bus service on a branch or group of branches of any railroad is a local salesmanship and an advertising problem, as well as a merely operating one. The schedules should be carefully thought out in advance, and with some regard to the convenience of the people who are expected to make use of them. They cannot be properly made from a hundred miles away. In fact it would be a good idea to have a neighborhood referendum in regard to these schedules. As an advertising device alone it would be well worth while, while the trained soul of any good advertising man would suggest local “copy” for the newspapers of the vicinage calling attention to the safety features of the motor-bus upon the railroad as compared with that lack when the selfsame vehicle travels upon the highroad. Without such intensified study and promotion methods I cannot believe that the mere introduction of the small passenger unit upon our standard railroads is going to meet with any pronounced success, either for the roads or for their patrons.

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Now we are dipping into the edges of a fascinating topic indeed and one that recently has sunk into a rut in the United States—transportation salesmanship. In these late years the traffic managers of our railroads have either become glorified rate-clerks or else trained special pleaders before the Interstate Commerce Commission or the State regulatory bodies. There is no department of railroading in which initiative seemingly has died so dire a death as in the traffic department. There, too, precedent rules, and seemingly with an iron hand. No man dares defy it.

The other day the British railways went back to their ingenious before-the-war plan of making very low rates for week-ends, but always upon trains that were not ordinarily crowded. If a man wanted to start out on a Saturday and return say on a Sunday evening or even early Monday morning, a most attractive rate lured him into the adventure. It was obvious that the rate would not be taken advantage of by business men—to the real disadvantage of the regular commercial rates—as little or no regular business can be transacted over the week-end; while a certain disinclination to ride at the high regular rates—high to-day in Britain, as everywhere else in the world—is overcome by the bargain-counter quality of the rate itself. And new riders are gained.

This is good business. It is real business. It is more; it is traffic science upon a railroad. For it is the genuine creation of business.

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A few weeks ago (January, 1922) the New Haven announced another extensive slash in its passenger-train service. Its service was already but a mere shell of what it was twenty, or even a dozen years ago. It gave decreased travel as a reason for the slash.

But what was the New Haven doing to gain new business? Was it advertising? Was it improving the intensive details of its service? Was it trying to induce people to go in odd hours upon its trains? Not a bit of any of these. It was reducing trains. It controls the night boats upon the Sound—and operates these upon the same schedules upon which they were operated more than fifty years ago, save as they gradually are being permitted to die of dry-rot and so are eliminated. For at least a quarter of a century not one improvement has been made in the operation of the Fall River Line. And even when the press of midsummer traffic forces a double service in each direction each night no one in the management has the initiative to suggest “staggering” the schedules so as to give any diversity of service whatsoever.

I should be the last to suggest that the New Haven make a low rate from New York or Boston for the Yale-Harvard or the Yale-Princeton games. It would be the height of absurdity to lower the rates when the traffic at full standard rates rises to a tidal wave which demands the full operating resources of the property for its handling; and that it always is well handled does credit to the New Haven’s potential powers of operation. Yet there are times when it might well afford to make an attractive excursion-rate between New York and Boston. Some of its existing trains between these two cities move at awkward hours and with an incredible slowness. They naturally are not crowded trains. An occasional attractive rate upon these trains alone might, and probably would, result in filling them to their capacity, while the people that traveled upon them would not in any large measure be those that ordinarily travel at the regular rates. The success for many years past of the Pennsylvania and the Baltimore and Ohio in operating week-end excursions between New York, Philadelphia, Baltimore, and Washington ought to have been of some educational value to the New Haven, but apparently it was not.

I have no grudge against the New Haven. On the contrary, I have naught but sympathy for a railroad which earns upwards of $60,000,000 a year from its passenger traffic alone and yet shows so little knowledge of fundamental merchandising principles. Yet it is all too typical of many of its fellows. In my boyhood days in northern New York the annual event of the autumn was the big excursion to New York City. It ran at half-price and in crowded passenger-cars—parlor-cars, sleeping-cars, and coaches by the dozens. It attracted people who never went to the big city on the regular trains and at regular prices.

It has been a number of years now since the last of these excursions was operated. The people who used to ride on them do not go to New York any more, unless perhaps by automobile once in four or five years. Their traffic is lost to the railroad to-day. When they contemplate the regular rates—twelve to fifteen dollars in each direction, in addition to $3.75 for a lower berth each way—and put them alongside of that famous old round-rate trip of but $7, they decide that it is easier to stay at home or wait until Uncle John buys his new flivver and then run down with him.

When the Interstate Commerce Commission, yielding to certain influences both within and without it, put up the passenger-rates, it felt gleefully that it had done a very clever thing. Never before had it shown so pathetically its lack of real vision in the railroad question. Freight traffic—not always, but to a large extent—must move, no matter what the rate. But passenger traffic is a temperamental and a whimsical thing—never more so than in this golden age of the automobile. You may lead it to water but you cannot make it drink. You may put up the rates but you cannot make people ride. For a correct answer ask the executives of the New England roads who have been so steadily clamoring for passenger-rate advances. Already I have referred to a 23 per cent. loss in passenger traffic in 1921, as compared with 1920. It is impossible to debit this entirely to prevailing hard times. It comes in large measure from hard feelings.

The national feeling of resentment against the present passenger advances recently has found expression in the measure introduced in the United States Senate for the restoration of the mileage-book (also touched upon in an earlier chapter) as a low-priced inducer of travel at wholesale—a measure which at this writing seems certain of passage—with its rate to be fixed at three cents a mile or a trifle less. For once the Interstate Commerce Commission missed its usual astuteness in trying to gage the public demand.

Why not sell the mileage-book at a little lower cost than the railroad mile at retail? Can I not buy two dozen pairs of shoes for less than twenty-four times the cost of a single pair? And is it not good business anyway for a railroad to try to get its existing patrons to ride more miles as well as to gain brand-new patrons, along lines which I have already suggested?

In Belgium and in Switzerland one may buy the equivalent of a card-pass upon an American railroad, good for a week or a fortnight or a month, according to the price paid. During the extent of its life it is good for unlimited travel by the person whose photograph it bears. The French have an even better system. For a matter of five or six hundred francs one purchases a similar card which for the ensuing twelvemonth gives the right, not for unlimited travel, but for the purchase of an unlimited number of tickets at one-half the regular prices; after which, for the holder of the card, the game inevitably becomes one of buying enough separate tickets to beat the first prices put down for the card.

Transportation salesmanship?

Properly played it is one of the most subtle games in the world, and one of the most fascinating—and for the railroad, one of the most profitable.

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We have seen a good deal in the public prints in the last few years about the prime necessity of nationalizing the railroad in the United States in a far more thorough fashion than has ever before been even attempted. One of the potential dangers which forever faces a land as physically great as ours is the inherent possibility of its falling apart through its sheer size and weight. Under certain circumstances it might not be particularly difficult for us to disintegrate as a nation into groups of separate States, in fact if not in name—groups of States not particularly sympathetic or coÖperative. We have had in our history already one very tragic instance of this very sort.

In order that this ever-present potential tendency may be overcome it is highly important that every possible measure be utilized toward binding the country more and more closely together. Transportation—railroad transportation in particular—forms an ideal binder. Utilized to its fullest degree it means that New England will know California better, and California New England. And each, knowing the other better, will understand better, sympathize better, coÖperate better. If Minnesota goes to Louisiana and Georgia to Montana, each becomes more understanding, more tolerant, more closely bound, in almost every conceivable fashion.

Passenger traffic, brought to a high degree of development, will make such understanding possible. Little else can do it even half so well. Freight traffic will not do it—not at least to any particularly large degree. A better circulation of national periodicals will help; this ever-present problem of encompassing our perplexing problem of nationalization, of making a group of forty-eight separate States, separate in climate, in soil, and even to a perceptible degree in racial and language characteristics, into a more coherent and closely-knit state, was one of the most potent arguments advanced against the introduction of the postal zone system in this country.

But even the national circulation of publications will not accomplish quite as much as travel. The Easterners who journey to the west coast each winter are to-day full of understanding of the problems out there—what the Japanese question really means to the Californians and the whys and the wherefores of most of the lesser questions that perplex them. If there were as attractive rates from Los Angeles to Boston and New York as there used to be from Boston and New York to Los Angeles, the Californians might in turn be a little more tolerant at times of the political situation in Massachusetts or in New York. It is intimate knowledge that makes for real understanding.

To make my point even clearer let me take you far overseas with me—to Italy in the days before the coming of the World War. The Italian Government even then saw a most imminent necessity for far better national thought and understanding. How by practical planning could it best accomplish such a thing? A little study quickly enough showed how: by not only letting Italians see every corner of their land but by urging them to do so.

So a most attractive ticket plan was developed. In practice it worked somewhat after this fashion. A resident, let us say, of Milan, in the great high plains of the north of Italy, might have business which called him to Florence. When he went to Milan Union Station—or whatever it is that passes for a union station in Milan—the ticket-agent, who was well schooled in the active art of selling transportation, attempted to beguile him into buying a little longer ticket—to Rome, perhaps. His bait, his selling ammunition, if you will, was a rate per-mile from Florence to Rome much lower than that prevailing between Milan and Florence.

Very well, suppose that our resident of Milan was prevailed upon to go down and spend that long-promised week-end in the city by the Tiber. Bargain-sales have always spelled attractiveness, to men as well as to women.

“If only you would continue on to Naples,” suggested the ticket-seller, “you would find the supplemental fare so slight as to be a mere nothing to your purse.”

Very well again. Date the pasteboard up to Naples. Perhaps it would be a little warmer, a bit more balmy down there anyway than in old Rome.

“From Naples to Messina, it is a mere nothing, and the climate is still lovelier, and the supplemental fare much less per mile than even that from Rome to Naples.”

With the final result that the prospective traveler at Milan would probably find the Italian state railways about ready to make him a present of the island of Sicily if only he would have the graciousness, and the very good sense, to extend his voyage to and around that fascinating place.

Now turn that rule back. Henry Blank finds his way into the Grand Central or the Pennsylvania Station in the City of New York. He has a business errand which will carry him six hundred miles west of the Hudson River—for the first time in his life. He plans to go to Cleveland, stay two days there in which he will do the work of six, and then come right back to Broadway once more. But the ticket-seller—the expert seller of transportation—has studied the Italian school of railroading.

“Make it Toledo or Detroit,” he hints, “and we will make the mileage rate from Cleveland to either one of those towns a flat three cents a mile, instead of the 3.6 cents which the Interstate Commerce Commission made the law of the land in August of 1920.”

Blank hesitates. The ticket-seller does not.“While if you can be tempted to go on from Toledo or Detroit to that smart young town, Chicago,” he urges, “we will bill you at the intervening distance between them at a mere 2.75 cents—a historic percentage, you will remember. From Chicago to the Missouri River, two and one half cents a mile. Two cents a mile flat on the next big lap, down to El Paso or Albuquerque or over to Cheyenne or Denver; lower all the time you go further west—until that New York-Cleveland ticket that you are buying of me now, Mr. Blank, will carry you all through California at a cent and a quarter a mile. You cannot afford to stay out of California at such a rate.”

And there is a strong probability that he will not.

My friend, the old railroader, snorts at this suggestion:

“What do you think that the California railroad commission is going to say about some fellow from Boston riding all over their State at a cent and a quarter a mile, simply because he bought a ticket from South Station down to Providence, and had it extended once or twice?” he asks. Then adds: “I don’t think; I know. They will say, ‘Very good, Mr. Southern Pacific, if you can afford to carry him at a cent and a quarter a mile, you carry the man in Stockton, who wants to go up to Sacramento or to Marysville, at the same identical rate per mile. That’s fair, and it’s our business to make you be fair!’”

At first glance it would seem as if the venerable traffic man is right; a second and third one however will show the possibilities of his being quite considerably wrong. If the railroad commission at Sacramento has one half the advertising sense that the rest of the Californians possess it is going to recognize that here is the way to popularize its States—in the best and broadest sense of the word, to nationalize it. Moreover, it will know that the man who buys a ticket from San Francisco or Stockton to Sacramento or Marysville will have his own opportunity to extend it, in just the same way and upon exactly the same basis. He can go riding all over Cape Cod at a cent and a quarter a mile, while the people around about him will be paying their 3.6 cents. Quid pro quo; turn about is fair play, and all the rest of the fine copy-book maxims of our boyhood days.

In front of me lies the hand-book of the Italian state railways in those blessed days of before-the-war. From it I find that I could have started from the Milan Union Station and made a circular trip through Bologna, Florence, Rome, Pisa, Genoa, and Turin back to Milan again for 157.5 lire, first-class or, at the then rate of exchange, a little more than thirty-two dollars. As a matter of fact the ticket sold at exactly the same rate from any other point upon this designated belt and from it was good in exactly the same way. We are using Milan here merely as a convenient point from which to study the system.

But suppose the ticket-agent in that brisk manufacturing city of the North sold us Venice—a little side-trip off the main circular route, up the line from Padua and back again to Padua before we were ready to go on to Florence and to Rome. The inclusion of the side-trip added but 8.9 lire to our original pasteboard, or less than two dollars. Suppose that we wanted not only Venice but Naples—this last, considerably more of a side-trip. We could retain Venice and do Naples as a side-trip from Rome, and still have our first-class round-trip ticket, going one route to Rome and returning by another and entirely different one, at 187.9 lire, or about $37.50, as we were then wont to figure it; while the period of availability of the ticket was lengthened from thirty to forty-five days.

Here is another point, seemingly unimportant, but really filled with a good deal of importance, particularly when one comes to view it from the standard of transportation salesmanship. In the days before the war the various parlor-car services of our railroads, whether owned and operated by the Pullman Co. or by the railroads themselves, had a minimum seat-rate of twenty-five cents. War-time administration ended this and fixed the minimum at fifty cents, to which presently was added a 50 per cent. surcharge for the benefit of the railroads, with the result that if a passenger is to ride but a mere fifteen or twenty miles in a parlor-car he is charged the outrageous figure of seventy-five cents for the privilege.

These short-haul riders of other days came to a considerable total. They helped fill the parlor-cars and so not only to add an attractive revenue but to maintain a service which, in many portions of the country at least, is a necessity. Yet apparently no one either in the railroad field or in the Interstate Commerce Commission has enough vision or salesmanship to order the minimum rate reduced. It goes, like a good many other things in the railroad situation to-day, by default, and just so far lowers the service standard.

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Our railroads in recent years have faced a new and formidable competitor in the rapid development in the United States of the automobile and, in consequence, of the improved highroad upon which it is wont to travel. I have called attention to this point before and wish again to emphasize it. Whether the privately owned and operated motor-car or the motor-bus operated for public patronage, it is a serious competitor to them. Yet how have they faced its competition, its steadily increased lowering of their passenger business? Have they met it with return competition? Alas, no. The railroads either have railed against the new-comer in their pastures or else have merely reduced their service, with the immediate result that still more traffic is diverted from their trains. In some parts of the country this loss of traffic has come to a serious pass. In certain portions of the State of New York the local service of the railroads is now reduced to a point lower than it has been for the last sixty years.

The British railways have also had to face the same sort of competition. It grew particularly acute in the three months of the great coal strike of 1921, when they were compelled to reduce their services of every sort to an absolute minimum, and the motor-bus or char-À-bancs burning an entirely different sort of fuel jumped into the breach in every corner of the United Kingdom and rapidly increased its services. But as soon as the strike was broken and the railways were enabled to return to their normal services they began to meet competition with competition. They underbid the char-À-bancs for traffic, in both rates offered and service rendered, and they have quite regained their own again.

Yet they did not wait for this crisis to calculate the passenger possibilities of the motor-car, particularly in regard to their own traffic. When the gasolene-propelled unit was still a strange new-comer upon the highways the English railways were beginning to adapt it to their uses and to correlate it with their services upon the steel highways, with the result that to-day in almost every corner of the British Isles gasolene motor-cars and char-À-bancs are being operated in connection with and as feeders to steam lines. In a similar way two great French railroads, the Paris-Orleans and the Paris, Lyons, and Mediterranean, have long since correlated the motor omnibus with their steam lines—in the one case in the district of the Touraine and in the other in the Fontainbleau, the Alps, and the Riviera territories.

The opportunities for such correlated services are just as great to-day in the United States as in Europe, if not greater. The railroads that serve the Catskills, the Adirondacks, the White and the Green mountains, the Rockies, and the Sierras could well afford to develop motor-bus routes as auxiliaries to their routes that already reach into these charming fastnesses. The Santa FÉ and the Southern Pacific complain of the competition of the motor-bus along their lines that parallel the Pacific coast, yet have done nothing to meet such competition or to correlate with it. To-day the Northwestern Pacific terminates in the small city of Eureka, in the beautiful Humboldt County section of California, two hundred miles north of San Francisco. By the creation of a motor-bus route almost due east to the line of the Southern Pacific near Dunsmuir, a circular trip of unusual variety and beauty could readily be established. The Southern Pacific has already made beginnings along this line by the establishment of a highly successful rail and automobile route through the Apache CaÑon. The success of this route, even though its beginnings are none too conveniently located, ought to encourage the establishment of others. The opportunities are real—there and all the way east of there, right to the Atlantic Ocean.

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One of the most pathetic features about our American railroad situation is the almost entire submersion of the traffic manager and the things for which he is supposed to stand. Upon most of our roads the selling of transportation rapidly is becoming a lost art. There are a few exceptions of course, roads which, like the Santa FÉ, still show a genuine belief in passenger traffic and its possibilities by not only advanced advertising methods but by a careful attention to the infinite details of the service. But these roads are very greatly in the minority. The majority of the lines are seemingly quite content to sit supinely and indifferently take such traffic as may be forced upon them.

In a recent issue of the “Railway Age” a railroad officer comments quite sharply upon this fact. He shows some of the difficulties that the average passenger meets when he is forced to ride upon trains that may be designated as “fairly second-class” in their accommodations, calls attention to the apparent indifference of the employees, and then proceeds to comment as follows:

This extremely fair-minded critic of the railroads then goes on to call attention to the utter absurdity of the roads’ attempting to operate on trains made up of perhaps but two Pullman standard sleepers and the rest very largely tourist-cars, day-coaches, and dining-cars that are attempting in their service and prices to rival the best hotels across the land. There is indeed much meat in what he says. The dining-car service is in a great many cases absurd.

It is apt in many cases to convey an impression of innate snobbishness, certainly not one of economy. It takes from ten to eleven men to operate an American dining-car of equal or less seating capacity than its fellow of Continental Europe, which rarely has more than four or five servants. The prices, to the average man traveling across the land and accustomed to stay in hotels of even a fair grade are not unreasonable. They merely are unflexible to the man or woman of limited means who is forced to ride long distances upon the cars and who is given little or no opportunity to alight at refreshment stations upon the way for the purchase of inexpensive foodstuffs. The table d’hÔte, which is used so successfully and so economically (both from the point of view of the railroad as well as of its patrons) on the railways of France and other European countries, has been given few fair trials in the United States. The New Haven once had a famous “fixed price” dinner; so did, and I think still has, the Milwaukee. The Baltimore and Ohio to-day offers what it calls a “commercial traveler’s club luncheon” for seventy-five cents, which I honestly think is the best meal in the country for that price. But these are the exceptions. The rule is a cumbersome dining-car arrangement, with the itinerant eating-place attempting to rival a city restaurant in the variety of its offerings, at a vast cost and annoyance to most of its patrons as well as to itself.

I should be inclined to agree with the gentleman writing in the “Railway Age” as to the complete neglect of the executive officers of our railroads of a proper supervision of their train service had there not come to my eyes recently a confidential report made to the president of a large road from one of his secret agents. This secret agent was much different from the average one—hired usually to assist in the detection of some employee or employees suspected of pilfering or other malfeasance. She was a woman of good station in life, a fairly experienced traveler, and by temperament inclined to be both generous as well as honest. For weeks she rode up and down the lines of that railroad and its competitors—not upon a pass, oh, no—but with nothing whatsoever to distinguish her from other travelers. Her comments upon the service, shrewdly feminine, went to her employer in the form of the confidential report which was brought to my attention. The mashed potatoes in Dining-Car 4809 were weak and watery. “... The chef should have known enough to have prepared them in milk or cream, not in water,” her woman’s judgment added. The head porter in the big new hyphenated hotel in P. advised her to go to a competing point by the X. line and not by the road that was employing her. There was a discourteous ticket-agent in the office at G. And so it went.

Here was a railroad taking a primary but a genuine step toward selling its transportation to its patrons. It is not enough that the railroads are making better “on time” records with their trains—their press-agents are putting out reams of propaganda these days to that effect: there is something more to real service than this. Return once again to our friend of the “Railway Age.” He says:

The answer to most of these criticisms is again that some twenty years ago the traffic men ceased to be a really vital figure in the organization of most of our American railroads. For more than twenty years they have been forced willy-nilly into policies of the most stringent economy, with the very natural result that the operating man, the man who could be counted upon to make the largest economies in the operation of the railroad, came into his own. To-day there is hardly an important railroad in the United States which is not headed by an operating man. Operating men do not as a rule have much traffic sense. It is a faculty that is born in some men, while others can never even understand it. It is a good railroad operating man indeed who can manage to acquire a real respect for transportation salesmanship and then give a real coÖperation in attaining it. Yet that is perhaps as vitally an important thing as our railroads need to-day.

For despite large measures of criticism that may be leveled against it, the railroads of the United States are beginning more and more to tender a real degree of service once again to their patrons; not of course to be compared with that which they gave ten or twelve years ago. It may be many years before they attain that standard again, if indeed ever they do. But the service that they are rendering they are failing utterly to sell to their public, all for a lack of real salesmanship. The average man in the street neither knows or believes that the roads have made large strides in the restoration of many of their services, both freight and passenger. In fact in his mind there has arisen a certain intangible but fairly fixed idea that our railroad structure, both in its plant and operation, has begun to become something dangerously near obsolete. The skillful propaganda of the advocates of the motor-bus and the motor-truck, the fanciful tales spread about the future commercial possibilities of the aËroplane, have begun to make him inwardly question whether the steam train is not about ready now to be classed with the stage-coach and the canal-barge. The railroads of the United States in a supreme—and possibly a final—opportunity for setting forth the many, many merits and strengths of their present position, with a few conspicuous exceptions, are failing to grasp that opportunity. They are neglecting transportation salesmanship.

We have seen in this book, and we shall continue to see, how traffic has been created upon the railroads overseas. In the past we have built railroad traffic here in the United States. In our railroads of to-morrow it will be done again. Something of the past can be repeated to-morrow. Witness Atlantic City; originally a lightly-built summer resort which did all of its business in about two months of the year and hibernated for the other ten. It was the railroad—railroad coÖperation, if you please—with its advertising that made Easter upon the Boardwalk one of the great stated functions of the American social calendar. Railroad advertising made Glacier National Park; to an appreciable extent the other great National Parks across the land. Railroad advertising made the Northwest, the Southwest, California, Florida, the New Orleans Mardi Gras.

The most thoroughly advertised railroad upon the North American continent is probably the Canadian Pacific. The next is the Santa FÉ. And it is estimated that of the round-trip tickets sold in an average year from Chicago and points east to the Pacific coast more than 70 per cent. of them read Santa FÉ one way and Canadian Pacific the other. The best advertised single train in the land is the Twentieth Century Limited. And it is, beyond the shadow of a doubt, the best patronized one. Does transportation salesmanship pay?

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Let us return to our muttons. We were talking of competition. It has been said that it is competition—and competition alone—that has forced transport salesmanship. Undoubtedly this is partly true. It is one of the best arguments that can be made for the retention of our extravagant competitive system of rail transport. But upon analysis it will be seen that the advertising examples that I have just shown have been directed almost exclusively to the promotion of through long-distance trains. I have not seen the Santa FÉ or the New York Central or the Canadian Pacific often stressing the advantages of travel in their short-haul, non-competitive territories. Last spring, and again this, the hoardings of London Town were setting forth the glories of the immediate vicinage in such color and beauty and appeal that one wished to close down one’s desk and hie himself off into the open country—a ride on the train, and a ride on the train in again.The French railways are non-competitive, yet bow to no one in the thoroughness and the attractiveness of their advertising—the quality of their transportation salesmanship. It is a part of their intensive railway management. Is it not about time that we heard a little more of intensive management of our railroads, both in their operation and in the solicitation of their traffic? Here is a vital principle of transport in the United States—speaking generally now and not specifically of the railroads alone—that apparently has been considerably overlooked in recent years. In a large sense it is an economy as well. I think that I have shown by this time the economy and necessity of systematically developed transport applied evenly to the entire land, and not, through the efforts of that false god of competition, spread thick here and thin there.

This vital principle was completely overlooked in the minds of the politicians who as a tentative American railroad policy gave us a “competitive consolidation” of our roads. Seemingly competition was indeed their god.

“How can such fine industrial cities as Rochester or Akron or Dayton or Grand Rapids thrive and continue to thrive without railroad competition?” they asked, apparently forgetting that for many years such fine industrial cities as Bridgeport, New Haven, Hartford, and Providence have not alone lived but thriven and continued to grow greatly without railroad competition. In the old days before it had entered upon its financial skylarkings and was content to remain a well-ordered servant of its community, the New York, New Haven, and Hartford railroad showed that it could render in a non-competitive territory service quite as good as its fellows of the competitive territories. Competition was not the thing that made or broke the New Haven service; it was income, outgo, human morale, even regulation, if you please, but not competition. The vision of Charles S. Mellen that New England should one day become a great non-competitive railroad territory was a very real and a very far-sighted one. It is only with the method by which he sought to bring it into actual being that one may beg to differ.

In no other land of the world is the competitive theory in transport being pushed forward to-day. In fact the tendency is decidedly in the other direction. It was to observe this tendency—the distinct effort to eliminate competition and bring coÖperation and harmony between European railway properties—that I journeyed overseas not long since. And in the next of these chapters I shall set forth some of my observations on the regional railway situation in France (where it has long obtained) and in Great Britain (where it is just now being established), particularly as our future prospects here in the United States are affected.

In the meantime, our competitive system continues to remain one of our pet railroad extravagances. Remember that the mistakes that Mr. McAdoo made in his direction of the Federal Railroad Administration were quite overbalanced by the obvious economies that he was able to make the moment that he had eliminated the competitive factor in our national transportation machine. As he was able more and more to overcome the long established competitive feeling between the railroad executives—to no small extent, perfectly natural and human personal jealousies—the more he was able to effect and extend these economies. The Railroad War Board which the railways had appointed early in 1917 and which was in many ways an anticipation of the coming of Federal control, despite its good intents and honest endeavors and real results, was constantly hampered by this competitive feeling even between its members. Yet as we have seen it lacked the autocratic power of the government director-general, and so it failed and had to be replaced. And the obvious war-time economies—the direct routing of traffic, the pooling and interchange of equipment, the joint representations and the like—came into being.

To accomplish these things nationally and permanently, to lessen competition rather than to increase it (no sane man imagines that we are ever to succeed entirely in removing the competitive element), may yet mean the complete reorganization of our national railroad system. Yet even so radical a step need not be regarded as either fatal or impossible. It is entirely within the possibilities to-day that our privately owned and operated railroads, at least as they are at present constituted, may fall. There is but little in the present situation to make one optimistic as to their future success, along the present lines at least.

The sole alternatives to private ownership and operation are government ownership and operation. To the majority of Americans the very idea of a further governmental control is extremely distasteful, to put the matter mildly. To them railroad nationalization is a very real menace. Yet the menace cannot be avoided by merely singing a song of hate about it. It can be overcome and finally prevented by some definite national plan or policy in regard to our roads—a simple thing in which for a number of years past we have been sadly lacking. If such a plan means their radical reorganization we must begin. And the sooner the better.

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