Railroad Transportation Within the United States

The magnitude of the railroad industry and the vital part it plays in the economic and social life of this nation appear as the two most interesting and impressive phases arising out of a study of the growth and development of transportation. The inability of the railroads and the public to get along together amicably furnishes another interesting and possibly no less important phase.

The importance of the railroads can be better grasped if their magnitude is appreciated. For instance, the federal government spends annually for interest, debt retirement, expansion, administration, and operation a shade under four billion dollars. The people, through the payment of their tax bills, furnish this sum. The railroads of the nation over a ten-year period prior to 1930 spent an annual average of more than six and a quarter billion dollars for interest, debt retirement, expansion, administration and operation. During this period, the people paid an average annual rail transportation bill of a little over six billion dollars. The railroads borrowed the difference on the hope of a fair return held out to them by the Transportation Act of 1920 (Nelson).

The federal government spends annually on past wars and the national defense approximately two and three-quarter billion dollars. The railroads for the ten years preceding the present depression paid their employees nearly three billion dollars annually, an amount somewhat greater than the government each year spends for past wars and national defense.

In addition to the expenditure of the government for past wars and national defense, there is required annually slightly more than one billion dollars for all other expenses, whereas the railroads each year for the ten-year period spent one and one-third billion dollars on these five items alone: steel, fuel, forest products, ballast and cement. They paid an annual local, state, and federal tax bill ranging from $300,000,000 to $400,000,000.

Railroad mileage throughout the nation is nearly, if not indeed, adequate at the present time. In this country the physical frontiers have all been effaced, the deserts have been crossed, the fertile sections have been crisscrossed and the mountains penetrated. In some parts of the country there are, if anything, too many parallel lines. What with the creation of hard-surfaced highways and the developing use of buses and trucks as feeders for the railroads, there are only isolated districts where additional short lines of railroad may be needed.

The frontiers left for the railroads to develop are along scientific and engineering lines and in more efficient management and improved relations with the public.

The outbreak of the World War found the railroads in the United States in the midst of evil days. They were undernourished financially, and their equipment was in a low state of repair. In this condition they were suddenly called upon to increase their business far beyond their plant capacity. Anti-trust laws, insufficient capital, and Interstate Commerce Commission regulations combined to handicap them still further. When the situation appeared most hopeless, government control was instituted. These three inhibitions to good transportation were swept into the discard in order that railroad men might rush traffic to Atlantic ports. Supreme consolidation effected common use of terminals and traffic equipment; purchases were consolidated and traffic was routed over railroads best equipped to handle it (Bernstein).

It is important to remember that railroad men did this job. They functioned effectively when given the authority. Railroad operators learned more about improved methods during this period than they had learned in the previous generation, because they were free to function. Neither income nor government regulations required consideration. In this effort of operating one great national railway system the accumulated wisdom of all railroading became the common knowledge of all the railroads.

The threat of government ownership served as a spur. The operating knowledge acquired helped them establish economies and efficiency undreamed of twenty years before. When the railroads were returned to private control the operators continued to use this new technique. During the period from 1920 to 1930 they cut operating expenses over two million dollars a day and moved more ton miles of freight than ever before in the history of railroading. Strikingly enough, this has been accomplished "without help from any extraordinary invention." It was done in the face of a statement in 1912, relative to savings through operation by the use of efficiency methods, by the president of a great railroad, that "the limit of this kind of economy is in sight, if it has not been reached." (Carson)

Railway managers have demonstrated great capacity for handling the intensive cultivation job which lies ahead