The Modern Railroad

APPENDIX

APPENDIX

EFFICIENCY THROUGH ORGANIZATION

In a local freight-house in an inland manufacturing city of thirty thousand inhabitants between forty and fifty freight-handlers had been employed for a term running from twelve to fifteen years. The freight-house boss was of the old school. When he thought that he needed more help, he made a fearful noise, scared headquarters, and more help was given him. The strong-armed gang reported at seven o’clock in the morning and then held a two-hour conversazione, while the book-keeping force in the dingy office at the end of the freight-shed arranged the way-bills and the bills-of-lading for the day’s work. Before ten o’clock, if all went well, the freight-house gang was generally at work pushing its way through a seeming chaos of less-than-carload freight.

After a time the old freight-agent died and a new one came in his place. The new man was on his job less then three months before he arranged a new schedule in that freight-house—and dropped twenty-five men from its pay-roll. First he summoned the bookkeeping force together, and announced that it would report at five o’clock in the morning, instead of seven; of course, leaving two hours earlier each afternoon. The bookkeeping force demurred. It was not pleasant getting up before daybreak in the winter darkness of a chill northern town, and such a scheme interfered with the social plans of one or two of the bookkeepers. But the new boss only smiled and said, “Try it.”

And after they had tried it, the way-bills and the bills-of-lading were ready at seven o’clock when the handlers reported for work, and the freight-house got to work upon the shriek of the roundhouse whistle. After that, the pay-list was cut—you may be sure that a house-boss who could scheme out such a plan could weed out the shirkers and the idlers among his staff—and, better still, the consignees began to get their freight sooner than ever before in the history of that town.

Eventually—and a wonderfully short “eventually” it really was—the freight-agent climbed the ladder to the superintendent of that division and under his bailiwick came a railroad which had recently become attached to the parent system through the process of benevolent assimilation. The ordinary less-than-carload business was moved out of the freight-house of the smaller road and it was given over entirely to carriage and automobile shipments—the inland city makes a specialty of manufacturing vehicles of every sort. The division superintendent went over to the carriage freight-house and saw that it took a dozen men to man it, although it was not more than a six-car stand. Carriage bodies and automobile bodies crated are both heavy and awkward, and the boss of that house was asking for more help.

The superintendent went straight from that freight-house to a local foundry, sat there for fifteen minutes with its draughtsman and then and there evolved an overhead trolley-arrangement, very much the same as the big packing-houses use for handling heavy carcasses. A requisition for the thing went through a-flying, and now the carriage-house in that city is handled with two trained men. The scheme is fast becoming standard in the newer freight-houses and in St. Louis, the M. K. & T. has just adopted it for its splendid new terminal, whole fleets of platforms hung close to the floor and suspended from an overhead “trolley arrangement” entirely supersede the brigades of hand trucks formerly in use.That is the point of it. There must be dozens of other cities of thirty thousand population, of sixty thousand, of ninety, of one or two or three, of five hundred thousand, where a little such method would produce similar results. In that first house, a saving of about $350 a week was made, when the young freight-agent brought some system into the dusty place. A dozen such savings or even greater, would be quite a help on the railroad’s balance sheet. At least that is the gospel which Louis Brandeis, of Boston, preached, and which attracted world-wide attention when he made the exact statement that he could save the railroads of the country a million dollars a day in the operation of their lines.

The railroads made a perfectly good legal case before the Interstate Commerce Commission—or let us assume that, at any rate, in the present instance. But one such clarifying statement as that of Brandeis’ produced more effect both upon the land and the Commissioners than all the legal briefs that together were filed in advocacy of the raises in the freight tariffs. At no time did the railroads successfully controvert Brandeis’ sweeping statement, and so they lost their fight.

And yet the railroads are accomplishing some remarkable improvements in their internal affairs—for which they are being given not an iota of credit. And one of the most interesting of these is the promotion of efficiency through organization, or better yet, through reorganization.

Along in the fifties, Herman Haupt, who was afterwards a brigadier-general of the United States army and brevetted major-general, devised the wonderful organization scheme of the Pennsylvania system, which is still in use to-day on that well-managed property. The scheme has been adopted since then by practically all the large railroads in the country. Before General Haupt evolved it, there was no real organization among the great railroads. Like Topsy, they “just growed” from the little individual horse and steam lines from which they were formed and they were even more like Topsy in some other details. But Haupt’s plan brought dignity to a great business that needed dignity—and system. For fifty years it has been accomplishing something more than merely serving its purpose. But railroad terminals and railroad equipment of fifty years ago are long since obsolete, and so within recent years the larger railroads have found their organization schemes not up with the times. The growing complexity of their work, the intricacy of their relations with the various city, state, and national governing boards, the constant tendency to enlarge and to consolidate these, have all proved fearful taxes upon the Haupt plan. Great masses of correspondence have accumulated, the whole business of conducting the railroad has been enmeshed in whole miles of red-tape—and men like Brandeis, of Boston, have been permitted to make their challenges and stand uncorrected.

Go back into the sixties for this last time, and pause for a moment at the fighting of the American Rebellion. Men in the North were beginning to hear that the Confederate army had something different, something better, in its organization than the Union army. It was an intangible something, but it seemed to make for efficiency, and, after all, that was the main thing. So after the war was history, there were far-sighted Northerners who said that it would be well to bring that intangible something into the United States army. At such a time that thing was, however, tacitly impossible, and it was dropped for more than thirty years.

But Von Moltke picked up the idea, and incorporated it in the intensely modern army of modern Germany. It helped to win the great Franco-Prussian War, and when the other nations of Europe began to examine it it had a name; it was beginning to be a tangible something. Military men called it the “staff idea,” and when you asked them to explain it they told you that officers who handled men were known as “line officers,” and those who handled things as “staff officers.” In other words, men could be lifted—as it were, in an aËroplane of scientific organization—away from their commands and their narrow environments, up to a point where they could have perspective, where they could handle men, regiments, small arms, heavy ordnance on a large scale. The staff officers work in things in the abstract, just as the line officers mould men in the concrete.

There then is the rough theory of staff organization which was picked up and adapted to its use by the United States army at about the time of the Spanish-American War. Of its value there can be no doubt; of its efficiency no question.

A young man—Major Charles Hine—who had seen the operation of modern staff in the regular army, decided that it was a good thing for the great railroad systems of the country. Hine knew railroads. In order that he might know them thoroughly, he one day packed his uniforms and his saddle away in his trunk and went quietly out and got a job as brakeman on a freight train. He did not stay on the car roofs very long; he has served in about every conceivable post in railroad divisional organization, and he has had a good chance to study the weaknesses of those very organizations.

“We have got to eliminate government by chief clerks,” said Major Hine at the very beginning. “We are growing too rapidly for the men higher up. We are forced to delegate official authority to clerks and foremen, and then we build up an autocracy around some person of official rank. It is pernicious feudalism, this permitting the chief clerk, and a good many times some other clerks, to sign the name of the officer whom they attempt to represent.”

A railroad is really so spread out that its officers live a double official life; a part of the time they are at their desks, and another part out upon the line. Yet the average railroad officer, be he of high or low degree, flatters himself that by some subtle method of personal superiority, he is enabled to act intelligently in two places at the same time.

Major Hine saw how that worked at the very beginning of a special service with the Southern Pacific Railroad. He was down in the Yaqui River country in Mexico, where heavy construction work was under way. In company with the division engineer, he was riding the line mule-back. The division engineer had several parties under him, each in charge of a resident engineer, and all engaged in laying out and checking the contractor’s work. The headquarters of the division engineer were presided over by a ninety-dollar-a-month chief clerk, who was dealing in the absence of his superior with one hundred and twenty-five dollar resident engineers. The division engineer assured his guest that the telephone permitted close personal contact with headquarters, that every hour questions were referred to him. The vice-president of the company, desiring to change the assembling point for luncheon, sought for two hours from engineering headquarters to locate the division engineer, who was on the grade all the time.

The condition mentioned necessitates the chief clerk’s signing the name of his superior to heads of departments lower down, which heads are receiving lower salaries, and are presumably of wider experience than the chief clerk who essays to be their monitor. This is done in the name of routine business. Unfortunately no two men often agree upon what constitutes routine business. Almost every railroad officer will tell you that “my chief clerk handles only routine business and never assumes too much authority.” When closely questioned, the same officer will reveal in the utmost confidence the fact that the same condition does not obtain with the chief clerk of the officer who is over the informant. Strangely enough, if the complaining witness is promoted to his boss’s job, the same condition still exists, showing that the system is at fault, rather than its individual members. Worst of all, the chief clerk has to break in all the new bosses and thus has only limited promotion himself.

Major Hine has said that the bigness of things on the Harriman lines, the breadth of the policies of Napoleon Harriman and Von Moltke Julius Kruttschnitt, the vice-president in the change of the operation of that far-reaching group of railroads, strengthened his nerve to advocate radical departure from preconceived notions of railway organization. Hine, at his home in Virginia, had once acted as receiver of a suburban trolley system, where he had introduced a simplified organization. He found, at that time, that the underlying principle of that organization would apply to a thousand times as many men on the great Harriman lines. Incidentally, after the receivership was lifted, the new owners of the property discontinued the organization which Major Hine had created, for they took the ground that no other electric road had such a system, and that therefore there could be nothing in it.

Kruttschnitt decided to let Major Hine begin on the Harriman lines with the reorganization of the divisions. He declined to order any changes, but placed the burden of missionary work and conversions among his subordinates on the shoulders of his special representative. There are not a dozen letters bearing on this subject in Kruttschnitt’s office. The work was done by personal contact, which in two years involved over one hundred thousand miles of travel by Hine. Major Hine states that, notwithstanding the splendid spirit of the officers of the Harriman lines, little would have been accomplished without the tactful support of Kruttschnitt, the man whose supremacy and whose brilliant abilities are unquestioned in the railway world. On the other hand, Kruttschnitt has been heard to say that the credit lies with the enthusiastic younger man whom he attached to his staff.

Most of the divisions of the Harriman lines had an assistant superintendent, engaged mainly in outside duties, with an office near the superintendent’s, presided over by a chief clerk. Both the superintendent and the assistant superintendent had his own chief clerk, who consumed reams of paper annually in intercommunications over their respective superior’s signatures. The new system provides, as a first step, that if the division has no assistant superintendent, one shall be appointed. The next step is to order the assistant superintendent to remain at headquarters in charge of the office, in effect, but not in name, the chief-of-staff idea, so successfully applied by the Germans through Von Moltke. When necessary, an additional trainmaster is appointed for the previous outside duties of the assistant superintendent. The old chief clerk is placed in line of promotion by appointing him, when possible, to a position with outside duties on the road.

Next, the division shop is raided, the division master mechanic and the travelling engineer (road foreman of engines) are moved bodily to the same building with the division superintendent, where are usually already located, the division engineer, the trainmaster, and the chief despatcher. The old theory has been that the master mechanic should be at his shop to supervise the shop force. The new conception is that the master mechanic has passed the stage of a shop foreman; that, located at one shop, he unconsciously comes to underestimate the importance of roundhouses and car repair plants at outlying points on the division. He is brought to division headquarters to get the atmosphere of transportation, to be in touch with the train sheet, and to realize that motive power is one of the component elements of transportation; that the shop is incident to the railroad, not the railroad to the shop.

The official family, now being gathered under the parental roof of the superintendent, are politely requested to deposit the official shooting-iron, the typewriter, in one official arsenal, from which all shooting will be done in the future. The office files are consolidated in one office of record. This idea is borrowed from the courts of justice, where one clerk of the court, with as many deputies as necessary, records all transactions regardless of the number of judges and other officers.

You must have worked in a railroad office to appreciate the fearful condition of official files in this year of grace, nineteen hundred eleven. You ask for the file on that culvert at Jones’ farm on the Martinsburgh branch, and an anÆmic office-boy staggers toward you with enough manuscript to be the making of a novel. There are the contract arrangements and the correspondence with the J. B. & G. concerning the union station privileges that are enjoyed with it at Blissville; why, there was a whole chapter given over to that episode of July, three summers ago, when the leaders had to be renewed on that magnificent structure, and its roof re-shingled. Here is the contract for handling milk on a single side-line division—and the accompanying symposium of thought from chief clerks and minor officers in the form of miscellaneous—and entirely useless—correspondence. This is the agreement with the bridge-builders’ union—four inches thick. No wonder the shelves of the record room sag, and that the clerks are hollow-eyed. Tons of unprotected paper have been scrawled upon, perfect rivers of helpless black ink have done the work—and all for that!

The heaviest file in the office of the Harriman system to-day is half an inch in thickness, and there is no one to deny that the property is being run at a high stage of efficiency—particularly in comparison with some other railroad systems of the land. As the result of a single record system at any division headquarters, the astounding saving has been to that group of railroads, of five hundred thousand letters a year, and it now goes without saying that they were unnecessary letters. In a year or two, that figure will cross the million mark—and you must take second breath to imagine the time and thought that goes into the making of a million letters in a twelvemonth. The material saving in stationery is considerable—although trifling in the operation of a system that spends about $225,000,000 a year, but the logical claim is made that the five hundred thousand letters eliminated retarded rather than helped administration, that they produced more harm than good. Deeper than all this is the dwarfing effect upon the individual initiative of the man below, for whom the letter attempts to think.

Elimination of red tape is not the sole object of the new system. Mr. Kruttschnitt regards this as incidental. What has appealed to him is the final step in the organization which is to confer the uniform title of “assistant superintendent” upon the former division engineer, master mechanic, trainmaster, travelling engineer, roadmaster, and chief despatcher. These officers retain their former duties and responsibilities, but they broaden authority to meet emergencies on the spot. This means increased supervision of employees, more scientific management of men. The officials of the Harriman lines faced here a ticklish problem. The attitude of organized labor was in doubt. Would the men object to too many bosses? Would confusion result from several men issuing orders that might possibly conflict? The results have been a splendid vindication of the intelligence of the men who are close to things. The men were often quicker to catch the idea than were the officers. What appealed to them most of all was the dictum that no man could sign another man’s name or initials.

“We old men do our work, no matter how many bosses there are; we realize that younger men need more instruction than supervision,” said a veteran conductor on the Union Pacific, when the matter was brought to his attention. “We used to make one report to the master mechanic and another to the superintendent. Now one report addressed simply ‘assistant superintendent’ is enough. It means less red tape. But what we like best of all is that some smart Aleck of a clerk can no longer jack us up.”

That veteran ticket-puncher recalled that in older days conductors had been dismissed for allowing operators to sign their names to telegraphic train orders; perhaps the letter of dismissal was signed by the superintendent’s chief clerk. There was railroad system for you!

After a year and a half of what the local officers called trial—for Mr. Kruttschnitt and Major Hine have always regarded that period as demonstration rather than as experiment—the system was broadened. It was applied to some of the higher units. For nearly a year, the U. P. general officers at Omaha have had five assistant general managers. In other days there were a general superintendent, a superintendent of motive power, a chief engineer, a superintendent of transportation, and an assistant to the general manager. The new million dollar general office building of the U. P. at Omaha will have its office space arranged according to the new conception. Until it is completed, the consolidation of office records will not be practicable, because the various general offices are now scattered over town. But a start has been made, and plans laid for full development.

What is good at the east end of a railroad is generally as good at the west end, and so the plan, working handily in general offices at Omaha, has been transplanted to the general offices of another Harriman road—the newly combined Oregon-Washington Railroad & Navigation Company at Portland, Ore., and at Seattle, Wash. Other general headquarters of the Harriman roads are only awaiting the construction of new and modern office buildings, before they will be asked to fall in line with the plan. Kruttschnitt does not order these things. He is far too wise a railroader for that. He directs by suggestion and the family circle talks of Major Hine. And yet twenty-three out of the thirty-three divisions of the Harriman railroad group have fallen into the new groove within two short years.

“Consider for an instant the overwhelming importance of a title to some railroaders,” says a high officer of one of that group as he sits at his desk. He is one of the men to whom a title is as hollow as a brass cylinder. “I have known a man to almost froth at the mouth because some stupid underling wrote a letter and addressed him as ‘assistant to the general manager’ instead of ‘assistant general manager.’ We have gone title crazy on some of our railroads. Take that overworked word ‘superintendent.’ We have more superintendents on this system to-day than there used to be track hands on a good sized road, and we have what is even worse, a superintendent of motive power, and a superintendent of transportation ranking the division superintendent who is the head of an important subordinate unit, and entitled to respect among the rank and file of our men as such. Under the new plan, the superintendent of transportation together with the superintendent of motive power, as you have already seen, become assistant general managers.

“Right there is an impersonality that is delightful—and efficient; it has proved most efficient in division organization. Out on our —— division we had several washouts simultaneously last year. We sent at once an assistant superintendent to each point of interruption and so we had at each vital place, a man with sufficient brains and authority to use the forces on the ground to the best advantage. Isn’t that good railroading?”

It is good railroading all along the line. It is good railroading to handle as big a question as the reorganization of a system employing a quarter of a million men and women, without writing a whole library of rules and regulations for its enforcement. Ask Major Hine, himself, how he handles that problem.

“Easily enough,” will be his reply to you. “We have a constitution—also unwritten like that splendid old bulwark of English liberties—and any superintendent, any general manager, can make his own rules for his division or his stretch of railroad as long as they will stand the tests of that constitution. And the railroad’s bulwark consists of but three very simple principles:

“The first of these is that no man may sign the name or the initial of another. That is rank feudalism, and out of place in the twentieth century sort of railroading. Our second clause is that there must be at all times an assistant superintendent in charge of the office. Normally, this assistant, in effect chief-of-staff, is the senior or No. 1 on the list. Here again, elasticity is introduced. The unwritten law provides that whatever assistant may be assigned to the office is the senior of the others for the time being. The chief-of-staff reviews the incoming and outgoing correspondence and reduces it to its lowest terms. Each assistant superintendent signs his own communications, but they pass through the focus of the administrative hour-glass on the desk of the watchful chief-of-staff.

“In the third place, correspondence must be addressed impersonally; from below, ‘assistant superintendent,’ from above, ‘superintendent.’ This requirement is based upon the idea that authority, as in the courts, is abstract and impersonal, that the exercise of authority is highly concrete and personal. The court exists if the judge is dead; the court is silent until the judge speaks.”

Already there is noted a greater willingness to take responsibility. More and more is heard about “this division” and “the company” and less and less about “my department.” The mathematical axiom that “the whole is greater than any of its parts” is sometimes violated in corporate administration, because there is no chief-of-staff to balance the specialization of some department head.

This system of playing trumps in the new science of railroads incidentally, but not essentially, provides for rotation in the position of senior assistant or chief-of-staff. Some conservative divisions have not availed themselves of this feature. On one division the superintendent in the first year of the new organization had four of his five assistant superintendents, each occupy the senior chair at headquarters for three months each. Finally, it came the turn of the old master mechanic.

“I am sweating blood,” he said, “but I never knew before how much there is about a railroad.”

When that master mechanic returned to his shop interests, his vision had been broadened, and he was more alert to protect the company’s interests when riding over the road. The sponsors for the new system deny that this may lead to the neglect of an official’s own special responsibility. They point to the superintendent as a balance wheel to maintain proper equilibrium. Over two years’ experience has led the high officials of the Harriman lines to lay some stress upon urging the assistant superintendents forward rather than holding them back. The tendency has been to settle back in former grooves. As long as no harm is done, those who avail themselves of their new opportunities are becoming more valuable assets both for themselves and for the company.

When a division is reorganized, the persons concerned are assembled to listen to a lecture by Major Hine. To their great astonishment, he usually leaves town the same evening. He takes the position that the system which depends for its success upon the presence of any individual is a system which the company has no business to adopt. He says, “We have pushed you off the bank. Now swim ashore.” They all do. On the next visit of his grand rounds, the instructor often finds his pupils beating him at his own game. Dropping in one day at the headquarters of a large division on the coast, he found the senior assistant superintendent and the old master mechanic in frequent conference. The senior assistant tossed a letter over the desk, and asked, “Did Jim here need to write this letter?” “It looks good to me,” said the instructor; “what is the matter with it?” “You told us,” said the interlocutor, “that one record in this office is enough. I handled a letter this morning from the mechanical assistant telling the foreman to repair this outfit car. Now I get another letter this afternoon about the same thing.” “You are dead right,” said the major; “you fellows will soon have me worked out of a job.”

The old master mechanic caught the spirit of the occasion and said: “Yes, Jack, you caught that one, but there were two just like it this morning that you didn’t catch. Next time I won’t have to dictate them.”

There then is efficiency through organization—the playing of trumps in the developing science of railroading. Other railroads have been watching the reorganization plan upon the Harriman system with critical eyes, and can find nothing but success in its workings. It is paving its own way, and shouldering itself abreast of a railroad generation that figures not in lines of from five hundred to a thousand miles each, but giant systems of grouped lines that may easily stretch their steel cobwebs for fifteen thousand miles—over whole sovereign States, from ocean to ocean—properties whose management calls for a degree of skill not yet demanded in the very greatest of our industrial or manufacturing corporations.

The old order changeth and giveth way to the new.

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