Root, Hog, or Die: The New Englander and His Railroads
I
CHEAP, efficient transportation is the life-blood of New England. Located at the extreme northeastern corner of the country, it has been, since the death of the China trade, as dependent on its railroads as man upon his food. Without them we die, and yet for twenty years a process of decay has been going on — stealing over us like creeping paralysis, but so gradually that for many years it passed almost unnoticed.
Ten years ago rumblings and cracks in the walls gave us warning, however, of the collapse which has now occurred. To-day the New England railroads not only are bankrupt, but seem bankrupt beyond repair. Faced with this condition at a time when war had raised the pressure on our whole industrial system to a point never before reached, the manufacturer and distributer turned to the motor-truck, as the only possible avenue of escape; with the result that, in a brief five years, our main radial highways have been converted into railroad rights of way, and are now choked with heavy traffic for which they were never designed.
Every abuse carries its penalty. The penalty for this abuse of our roads will be a heavy one, which the tax-payer must pay. The Commonwealth of Massachusetts has spent more than $25,000,000 of the tax-payers’ money in road-construction, much of which has already been ground to powder under the wheels of the five-ton truck; and the damage must to-day be repaired at perhaps double the former cost. Our State tax has mounted in recent years by leaps and bounds; the contribution of the truck-owner to the cost of roadconstruction is so trivial, that most of the burden will fall upon the tax-payer, on whose now over-loaded back a huge additional levy is apparently about to fall at the very moment when he is expecting relief. And make no mistake as to who must bear the burden. The old notion that a tax could be pinned upon one class has vanished into thin air. We now realize that it is not the capitalist who pays the tax, or the manufacturer. It is the man in the street who pays the tax, in the increased cost of everything he buys. He pays the bill for every waste of public money.
At the present time 2,000,000 tonmiles of freight are transported annually by truck; and five years hence, if the growth continues, the figure will be 60,000,000.
Apparently the business community has come to the conclusion that the motor-truck is to replace the railroad for freight traveling 100 miles or less, and is developing its business along these lines. The decision is a vital one, which must rest, one would suppose, on some well-matured plan, the practicability and financial results of which have been thoroughly tested and adequately proved. But such is not the case. As a matter of fact, the proposition to make such a change in our transportation system not only is one which no intelligent merchant or manufacturer would recommend, if he knew the facts, but is a venture, not merely wild, but literally impossible.
The traffic which it is proposed to handle in this way will in five years’ time require, for Massachusetts alone, at least 2000 miles of main highways constructed primarily for that purpose, at a cost exceeding $40,000 per mile, or a total of $80,000,000. Such a sum of money cannot be raised and economically spent in the brief space of time within which the work must be done; for unless the thing is done promptly, our industrial life will be strangled. But even if it were possible, the result would be a system of transportation so costly in operation as to be prohibitive. The cost per ton-mile of handling freight in such a way would be more than the traffic would bear; and if the money were raised and spent, it would be wasted. This can be shown by figures which, while subject to much uncertainty, are adequate for the purpose.
It now costs from 15 to 50 cents per ton-mile for motor-truck operation, depending upon two variables — the distance hauled and the so-called load-factor. By load-factor is meant the ratio between the maximum number of ton-miles per day that a truck can transport and the actual number of ton-miles transported. It is the habit of motor-truck manufacturers and operators to figure a load-factor of 50 or 60 per cent; but this is certainly too high, though it is difficult to say exactly what the figure should be. But considering that these trucks are to replace our freight cars, and that in New England the load-factor on a freight car is certainly less than 5 per cent, the above figures are wholly unreasonable. If a load-factor of 20 per cent were obtained, it would indeed be remarkable. At this load-factor, operating costs per ton-mile, without profit, will vary from 30 to 40 cents, according to conditions.
To this figure the intelligent critic may object, on the ground that, the truck being a relatively new device, great economies in fuel are to be looked for; but in the first place, fuel is a relatively small item, and in the second place, it must be remembered that, as time goes on, the wages cost, which even now is a large item, will tend to increase. Compared with railroad wages to-day, this cost is very low, and it is practically certain that operators cannot be found in large numbers who will work regularly for the wages and under the working conditions now in effect. Looking five years ahead, therefore, and adding to the operating cost the fixed charges and maintenance of way and structures, it seems clear that the average cost per ton-mile of this method of transportation will not fall below 50 cents. The present cost of way and structures is estimated at 33 cents per ton-mile. If in the next five years the traffic doubles annually, which would mean a traffic of 60,000,000 ton-miles, this might come down to ten cents. If the trucks were taxed ten cents per ton-mile, this would produce an income of $6,000,000 per year, which, added to the $3,500,000 in fees now assessed, is hardly enough to meet the necessary expenditures. But at this rate, assuming a 20 per cent load-factor, about 10,000 trucks would be required, and the tax per truck would be $600 per year. Compare the present license fee, and note what the tax-payer is contributing.
We are, then, in this position: in order to provide and maintain the necessary right of way to do the business, an annual expenditure of more than $10,000,000 during the next five years will be necessary; and when the job is done, we shall have created a system, the operating cost of which will be prohibitive. Obviously, this is no solution of our problem. Better to pay the money to the present owners of the railroads, whose rights of way have already cost twice the sum which it is now proposed to spend in duplicating them, and are far better adapted for the purpose.
This is not a fact, however, which should cause the legitimate and farsighted truck-manufacturer any alarm. He is engaged in a great permanent industry, not in raising mushrooms. Sound, steady expansion upon a firm foundation is his watchword and his goal, and any movement which tends to throw upon him a sudden but ephemeral demand will damage him. A great structure, built upon a quicksand, that will topple over and crush him, would be an unmitigated misfortune, which he will be the last to encourage. He is to-day painfully digging himself out of such a crumbling ruin resulting from the war boom, and he will not need a second object-lesson. The burnt child dreads the fire.
We are clearly driven to the conclusion that the only way out of the dilemma (if there be any) is by improving and cheapening our local railroad freight-service. Perhaps this is impossible; perhaps we are in a blind alley from which there is no way out. But have we really tried to escape? Have we put our best brains and energy into a desperate effort to improve our railroad service? Have we employed the best methods that the keenest business imagination can devise to help us? Of course we have done nothing of the kind. Look at the railroads of New England to-day and the conditions under which they operate.
II
The railroad system of New England — into which the investing public has already poured the best part of a billion dollars, to which should be added annually $25,000,000 more to keep it up-todate — is the greatest single industry we have. At the head are a group of over-driven slaves, beaten from pillar to post by government officials and labor-union leaders, and under them a small army of operating men in a semimutinous condition, whose principal aim at the present time seems to be to secure as high wages and do as little work as possible. Here is a business in the management of which the highest degree of skill, coöperation, and imaginative power must be employed and allowed to function in the most efficient manner. But we have either failed to show great skill in selecting the executive officers, or have forced them to work under impossible conditions.
The freight-traffic of New England is peculiar. Unlike that of our great Western states (or even that which the great trunk lines handle), the business of New England is largely in less than car-load lots. New England is, in fact, far more like old England, and has properly been compared to a huge terminal. In the conduct of this business, we have allowed ourselves to be dominated — one might almost say hypnotized — by the ideas of train-load and motive power associated with the great name of James J. Hill. The bankers have selected Western men to operate our systems, with lawyers and politicians of the old New England school for their adjutants and advisers.
It is a fundamental axiom of life that no great operation can be carried on without team-work — the most active and loyal coöperation between all members of the organization, from top to bottom. The capacity for team-work (that vigorous coöperative effort expressive of the militant soul) is the measure of civilization, of the rise of civilized man above the brute. This is fundamental and axiomatic; but to what extent has it been achieved in the railroad business? No one who will take the trouble to talk with the railroad employees need long remain in doubt. The attitude of the great railroad unions and of the individual operative is one of sullen discontent, or active hostility to the executive officers. The system of rules and working conditions on which the men insist seems primarily designed to make the operation of the business as costly and inefficient as possible. In an industry where the prosperity, and even the life, of the community demands maximum efficiency and minimum cost, the great body of the workers spend their best time and effort to frustrate both. Is it strange that the service is unsatisfactory and that costs are high? It would be a miracle if it were otherwise. One risks nothing in saying that the business must be reorganized from top to bottom before it can function properly.
The thing is possible. Many of us can remember the time, a generation ago, when the frame of mind of these railroad workers was radically different: when men were proud of the companies they served, loyal to their interests, and spoke with bated breath of their superior officer as ‘ the old man,’ a term of highest reverence, affection, and respect. We can remember the fine figure of the conductor of the fast train, bowing to his distinguished passengers, all of whom called him by name. That was the spirit necessary for success, but it is conspicuous to-day by its absence. It was the result of a great local enterprise, owned, managed, and operated by local men, on whom the responsibility for success had been squarely placed, and who had been allowed relative freedom of action. They breathed the free air of their native hills, were honored and respected by their fellow citizens, and, feeling the full weight of responsibility with power, met the test.
The conditions which have produced the ruin that we now face belong, perhaps, in the province of the philosopher rather than the statesman, but some comprehension of them is essential; for the men who must to-day get us out of this tangle are like the doctor who must diagnose the disease before he can cure it.
The public mind has been directed during recent years to blunders and scandals of a financial character, which are supposed to be the root cause of the present collapse; and doubtless they have contributed to it. But they are not the main cause. The failure is in management, not in finance. Either this great industry has assumed proportions beyond the power of men to deal with, or through lack of sufficient imagination and grasp of the nature of the problem, the owners and the public have failed to attract, or have driven to distraction, the type of man that was needed. That the industry has become very large, that such men as are needed to run it successfully are rare, no one will deny. But we cannot afford to admit that the job is beyond our power. The word ‘impossible’ is not popular with our people. Where there ’s a will, there’s a way.
On the other hand, that we have failed to get the right managers, or that, having got them, we have not allowed them to do their work, is also clear; and before we discharge them as incompetent, we are bound in fairness to consider the conditions under which we have placed them.
Public regulation of the industry began fifty years ago; but only within twenty-five years did it become general and of decisive importance. During the latter period, however, the railroad systems of New England have been under the strictest supervision of eight independent regulative commissions, each supreme in its own jurisdiction (the limits of which were not always clear), each holding divergent views as to the policy to be pursued, and unanimous only in this, that railroad executives were naughty boys, who needed stern discipline; and the rod has not been spared. As a result, the major portion of these men’s time has been spent in attending public hearings, in preparing to attend them, or in endeavoring to act in such a way that they would not have to. Little time or energy has been left them to consider how to run the business so as to meet the rapidly changing conditions; and they have had less than no encouragement to look into the future with the keen constructive insight which was essential to success. They have been forced into the ignoble position of holding responsibility without real power, of being accountable for results which they did not cause, and of being blamed for every failure, whether brought about by them or by others.
Note, also, that men browbeaten as these men have been are not likely to overflow with the milk of human kindness, and may pass on similar treatment to their subordinates. Whatever the native capacity of the railroad executives, therefore, clearly they have labored under insuperable obstacles. The power to regulate, like the power to tax, is the power to destroy, and public regulation in New England has in this respect achieved a notable success.
III
The time has come, however, when the business men of New England must make radical improvements in the whole railroad situation, or we die.
Freight rates and services and (to a lesser degree) passenger business must be cheapened and improved, or New England industries will perish. A system of motor-transportation is no remedy, nor is government ownership and operation. The collapse is not due primarily to financial failure, but to failure of the human element; and in this respect, government officials, under present conditions, will not act with more vision, intelligence, and energy than private officials. The essential thing is that the public (that is, the tax-payer) should clearly grasp the fact that this is a matter of life or death, and determine to meet it with the desperate energy which alone will bring success.
The two main issues that must be grasped are: first, that the railroad industry (like all others) must be conducted by a group of men enthusiastically interested in their work and loyal to it and to each other from top to bottom; and second, that the conditions of traffic of New England are not like those of the West and South, but more like those of Europe, and must be studied and dealt with as such.
It is the industrial life of New England that is at stake, and our hope must rest on New England men. The West has its own problems to worry over, and the type of brains and energy which have made New England industrially great must save us now, or we perish. We must rely on Eastern men — not men steeped in and hypnotized by the ideas of train-load and motive power invented by Jim Hill to solve the traffic-problems of the great-plains states. For observe that the local traffic of New England is much of it in less than carload lots. Freight cars of thirty to fifty tons’ capacity are not what our traffic requires. The five-ton motor-truck, or the five-ton railway-van used in England, is more suited to our conditions.
Light trains and speed in handling must be the order of the new day.
One of the most serious stumbling-blocks in our local freight situation today is the cost and the delay in handling at terminals. Our present system of freight-houses and freight-handling is calculated to produce a maximum of both. It must be done away with. New methods must be devised. Already the lines along which these methods will run are beginning to appear. The motor-truck has replaced the horse for local haulage. Removable bodies, which can be loaded by the merchant or manufacturer in his shipping-room and slid on to the motor-chassis that backs into the room, will take the goods to a freight-yard (not a freight-house) where overhead traveling-cranes will hoist these bodies over as many intervening tracks as is necessary to deposit them on freight-cars placed according to their destination, one or several bodies on each car. If necessary, tarpaulins can be stretched over them for protection against the weather, and the trains will be made up in small units, hauled by light, economical engines (which in the not-distant future will be electric). Such trains will be dispatched at frequent intervals, and unloaded by the same method at their destination. The business of transporting goods to and from the freight-yards can, if necessary, be done by the railroad companies themselves (as it is in England); but it will probably be wiser to leave this part of the operation in the hands of separate local agencies.
By some such method deliveries of much of the local freight can be greatly speeded up and costs of handling reduced; and, as to the balance, systems of handling by small electric trucks at the freight-house, such as are now being tried in the Milwaukee freight-house of the St. Paul, will save much manpower and reduce costs.
However, it is not by the increased use of machinery alone that the cost of handling freight can be cut down. Better organization of man-power and a better spirit in the men can result in an increased efficiency which would cut the handling cost in two. No freight-handler need fear the loss of his job. His future is in his own hands; for, if he will use his head as well as his hands, and put will-power behind both, no machine can displace him. But he must now face the music, for the tax-payer, once thoroughly aroused, will insist that he shall handsomely earn his pay or give way to a machine that will.
Just what the cost of handling local freight by rail ought to be, it is perhaps impossible to say; but some approximation to the point where the dividing line between motor-truck transport and rail transport will come can be made in this way. Assuming a price of 15 cents per hundredweight for cost of delivery at the freight-yard and removal there-from, or about three dollars per ton at each end, we have a fixed charge of six dollars per ton on every ton moved, however far it goes. At a cost of 50 cents per ton-mile for motor transport, six dollars will move a ton twelve miles; so that for this and shorter distances the railroad cannot compete. This distance, amounting to six miles at each end of the operation, fairly represents the area of the larger industrial communities, where streets designed for heavy traffic have already been provided; and within these areas the truck will clearly be supreme. Beyond this point, however, the railroad costs should be less, in view of the fact that the Class II rate, within which class most of the local traffic could with skillful readjustment be made to come, is now only five and a half cents, with all the terminal cost upon its head. Even if the cost for hauling local freight is as high as five cents, plus the cost of handling at terminals, it is clear that, above the twelve-mile limit, a saving over the 50 cents per ton-mile for motor costs can be shown.
But there is one feature essential to the success of this or any other scheme. The railroads must be efficiently operated. Loyalty, team-work, and discipline in railroad operations — all are absolutely vital to any improvement whatsoever. Without these no system, no industrial operation, can succeed. Scientific management and the best of methods are futile if the human element fails. The army of 75,000 men who operate the railroads of New England must be loyal to its commander, or the enemy (high taxes and high manufacturing costs) will drive us from the field.
At the present moment the nation is much agitated by the controversy between the railroad executives and the railroad unions, over the question of wages and working conditions — the unions demanding that all such questions shall be settled on a national basis, while the executives plead for the privilege of dealing directly with their own employees. It is beyond the scope of this article to analyze the merits of this controversy; but it may not be amiss to point out that, in the heat of battle, the parties are in danger of losing sight of the real issue — the shadow may be mistaken for the substance. Effective team-work requires loyalty and discipline. Industrial organizations that survive the test of time are organized upon the same principles as an army, in which there must be supreme command and also subdivision into units, to the commanders of which much liberty of action is allowed. The organization of the National Baseball League forms an analogy which is instructive, for the business as a whole is recognized as a close monopoly, controlled absolutely by a small group of men; while at the same time the individuality of the clubs is not lost, competition is of the keenest character, and discipline is preserved.
But whatever be the form of organization, it is essential to success that each individual who comprises it shall be interested in his work, proud of his job, and loyal to it and to his superior officer. That it is easy to create such a condition, it would be idle to assert; but it will be impossible without the closest and most intimate relations between officers and men, and any system which tends to keep them apart will be fatal. This is, perhaps, the most serious objection to the scheme of national agreements, for which the leaders of the railroad unions contend.
The transportation conditions of New England are peculiar. They are wholly different from the conditions of the South or the West, and a union official living in Cleveland knows little, and is likely to care less, about the special problems of our community. The railroads of New England must be owned, managed, and operated by men whose homes and hearts, as well as their heads, are in New England. The operating men, from the engineer to the freight-handler, must know clearly that the success and the efficiency of operation of the roads is vital to their own lives; that when they strike, they strike their own wives and children; that, if costs are high, they must pay them; and that, if the business is a failure, they and theirs will be the sufferers.
If, in the process of reorganization on which we must now embark, new men are required in responsible positions, they should be sought, and will be found, among the rank and file of the present operating force. The spirit of team-play, which is essential, can be created and kept alive only by making it clear to every man, from water-boy to president, that promotion is the sure reward of good work; and in addition to this, public regulation must be so administered that responsibility and power will not be divorced; that the men we look to for results shall have freedom of action within reasonable limits, and be given a chance to show what they can do.
Moreover, unless these apparently simple principles are entirely fallacious, they would seem to indicate the solution of the problem of grouping the New England roads, which is now so hotly disputed. Current argument is largely controlled and its lines directed by the hoary tradition that the problem is a financial one, to be settled like a sum in arithmetic, notwithstanding the crop of failures which this method has produced in the past. But one is tempted to suggest that an experiment in dealing with it primarily as a human problem could not be a worse failure, and might succeed.
Nothing is more alien to industrial progress than a narrow provincialism, and yet the strongest motive-forces of the race are its personal loyalties to family — to clan—to State and to Nation. If this motive can be enlisted, it is irresistible, and will sweep aside obstacles that baffle the economist and the banker. So that it might well be found that the slogan, ‘New England money, New England men, New England roads,’ will lead us to a victory which the bankers in New York who guide the destinies of the TrunkLine Association cannot achieve.
The roads of New England must either be grouped together or parceled out among the Western trunk-lines. The figures point to the latter course; but the powerful popular instinct, which has opposed this in the past, rests upon a sound (if somewhat inarticulate) foundation. New England railroads succeeded when they were local enterprises supported by the loyalty of New England. As they slipped from this basis, they began to fail, and they have now collapsed. To our old rock-foundation we must now painfully return.
It is idle to suppose that the controversies which have destroyed the morale of our railroad organizations are between Labor and Capital, or that one class in the community is more vitally interested in their solution than another. The penalty of failure will not fall most heavily upon the big business man or the banker. These can, and will, escape and win a livelihood in other fields. It is the workingman — the man in the street—who will suffer. New England is his home; its future and his are one. If New England suffers from the failure of its transportation-system, these men and their wives and children must bear the consequences. And if these men fail to realize the true nature of the problem, as they have failed hitherto, and to coöperate in its solution, they, and chiefly they, will suffer.
The present attitude of railroad labor, which seems to be striving for high wages and limited output, is suicidal. These men behave as if efficient and economical operation of the railroads were somebody else’s business. In fact, it is their own. If they maintain their present attitude, they will destroy themselves and force their fellow citizens to shatter them and their organizations as a measure of self-preservation. The remedies will have to be drastic, for it is a matter of life and death.
To sum up the situation, then, and put a point upon the spear, we are faced with a vital problem, upon the successful solution of which hangs the future of New England. We are to-day a manufacturing community, to which cheap and rapid local transportation is essential. Owing to the collapse of our railroad system, we have not got it. Transportation by motor-truck, except for short distances, is too expensive. Our goods must be transported by rail, if at all, and we must either provide cheap and rapid railroad transportation, or perish as a manufacturing centre.
This conclusion does not imply that the policy of the Commonwealth regarding the construction of state roads has been unwise. On the contrary, such construction, properly planned and administered on the basis of payment by the automobile of its share of cost and maintenance, through a system of registration fees, is sound and popular. But these roads were designed for relatively light traffic; their foundations and bridges are wholly inadequate to withstand the blows of a five-ton truck, and their use for freight-service of this character is wantonly wasteful. The $25,000,000 investment of the taxpayers’ money is being destroyed by a use that was never intended. Your pocket-knife makes a poor claw-hammer, to say nothing of the effect on the knife.
That the task is not beyond our power, there is no question. Brains and energy of the sort that have made New England, if applied to this problem, will solve it. A small commission, composed of the leaders of our industrial life, could, in a very short time, verify the facts of the case and draw up a statement which every citizen in New England could understand, and which should be published and advertised in such a way as to drive it home in every section and in every class. The tax-payers, once aroused, will then insist that the necessary steps be taken at once. Different methods of handling goods and of handling men must be put in operation, but these methods need not of necessity be invented. To a large extent, the laborsaving devices which we need are already in existence and in use in other industrial or construction organizations. The future methods of handling men need not, in fact must not, be new. They must be the methods now in use in other great, efficient, and successful industries.
Whether these changes can be carried out by the men who now operate the roads remains to be seen. With a clear mandate and a fair chance, which they have not had heretofore, they should be given time to show what they can do. If they fail, they must be replaced by men who will not fail. Needs must when the Devil drives. Our need is desperate, and the right men can be found. Management, and not money, is what we need. The motor-trucks for local deliveries, the terminals, the railroads, and a large part of the necessary equipment are at hand. We have the tools — our problem is to use them with the requisite skill.