The Railroad Problem

even that cool, calculating fellow whom we delight to call "the Banking Interests." All America pays toll to transportation. And, inasmuch as the steam rail

ome 2,400,000 in industries bearing directly upon the railroads-lumber, car and locomotive building, iron and steel production, and the mining of coal. It is a goodly number of folk whose livelihood, or a large port

, you are an indirect holder of railroad securities. The savings-banks of this country have many, many million dollars of their savings invested in railroad bonds. If you have not even a savings-bank account let me assume that you have a life-insurance policy; there are three life-insurance pol

ces. The production at the mines, despite a scarcity of labor, has not been far from normal. But the railroad has failed in its part of the problem-the providing of sufficient cars to transport the coal from the mines to the consumer. It has been hard put to find cars to move the munitions of war from the interior to the seaboard towns. And the coal mines, because of the lack of railroad cars, have been unable to relieve the situation. So panic has resulted. Upon its heels have come similar, if somewhat lesser panic

recall that it is the railroad that carries forth their crops-not only to the cities and towns of the United States, but to the bread-hungry land, far overseas. In those markets he competes with the wheat from lands so far distant that they seem like mere names wrenched from the pages of the geography book-Argentina, India, Australia. Because

ea in the market of the consuming nations of the world? As the wheat fields of each of these nations are nearer tidewater than the wheat fields of the United States, it long ago became necessary for our rail

age grain haul in the United States of 1,700 miles, would make the transportation cost of American wheat four and one-half times as much, or $1.21. The American farmer owes a far greater debt to the railroad than he sometimes may believe. He may have suffered under the oppressions and injustices of badly managed roads-may yet be smarting

raffic forces were set to work helping the overworked operating departments, tracing lost cars and the like. The backs of their operating departments were all but broken. I myself saw last winter on the railroads for a hundred miles out of Pittsburgh long lines of freight cars laden with war munit

unfeeling barometage of percentages it all represented but five and one-half per cent on the actual value of the rail

ovies" well into the millions each twelvemonth; they were building new theaters in all the cities and the bigger towns, almost overnight it seemed. Manufacturing and selling, nationally speaking, were up to the average. Yet in those very years, it was necessary for some of our very best railroads-the best operated and the best financed, if you

peaks for itself. The best of these second-class railroads made no secret of the fact that they were cutting down on maintenance in order to pay their dividends or the interest upon their mortg

ad location, and in others to inefficient or dishonest management. I shall reply to you by saying that perhaps fifty per cent of the railroads which are in bankruptcy today are there because they never should have been constructed in the first place and because of the financ

hows such a rotten condition throughout its affairs?" asked

president of the Santa F

elters a genuine blackleg. Are we to say that, because of this mere fact, its other members are not as good as any of us? So it is with the railroads. You cannot point even the finger of suspicion to such properties as the Santa Fé, the Burlington, the Pennsylvania, the North Western, or the Baltimore and Ohio railroads-to mention a few out of many, many instances. These are go

iciency?" you

n of Boston-Louis D. Brandeis, now a justice of the Supreme Court at Washington. In the course of a

ars a day, by applying the principles of modern efficiency to t

em were angered by it. The wiser ones, however, went home and sent their secretaries scu

by that name. They had been rebuilding whole divisions of their lines, relocating and reconstructing them so as to lower grades and iron out curves-all to the ultimate of a more economical operation of their roads. A bettered

ng those gentlemen whose only interest in the railroads arises from the fact that they own them. If greater efficiency meant greater economy-well, perhaps it wa

ciency that could be brought to his attention, why he brought Harrington Emerson, one of the best-known of the efficiency experts into his own offices and staff, why, beginning with his great car and engine repair and construction shops, he is gradually extending the principles of modern scientific efficie

t well under the surface of things, you will find that even the first six or seven years of the present century were not genuinely prosperous for the overland carriers. Dip

later, or at the end of the greatest period of material prosperity that the United States has ev

penditure of more than $4,000,000,000 is staggering. Yet what are the facts? The facts are that hardly one of these roads expended enough that memorable season to keep pace with the vast demands of the freight and passenger traffic-particularly the freight-upon them. We experienced great railroad congestions during the winters of 1903, 1905, 1906, and 1907. And the loss to the large u

ared to meet their great problem? In 1901, as we have already seen, they met it by an expansion of their physical facilities. But in 1901 the railroads had cred

oday, or the lack of it. The passenger-mile-representing the progress of one train over one mile of track-is the unit of that form of traffic. In 1914 the total passenger-miles had increased to 35,100,000,000 from the total of 27,700,000,000 in 1907-or 25.7 per c

ing the seven years from 1907 to 1914. Yet this very money must be paid for, and, in view of the gradually impaired credit, paid for rather generously. At five per cent, this expenditure represents an added annu

nd expenses of more than a quarter of a million miles of railroad. Yet even increased earnings of more than $400,000,000 are not so impressive when one finds tha

t the end of a seven-year cycle, increased transportation earnings of more than $450,000,000; yet it required $500,000,000, or an excess in a single year of more than $50,000,000, to meet the pay-roll, material

ar-a normal year, if you please. Here it is-$54,698,000 plus $202,100,000-and you have a total d

when one comes to consider it beside the great expansions in service as represented by the showings of passenger-miles and ton-miles. And yet today, as we shall see in due course, the railroads stand in need of far greater development and expansion than ever before in their history. Five or six years ago that supreme railroader, James J. Hill, estimated that the railroads of America would need a further expenditure of $1,100,000,000 a year upon their properties before they would be in shape even to decently handle t

ddle West and in the South they are at their worst. If they do not actually cry aloud from a physical standpoint for reconstruction, their service, or the lack of it, certainly does. Yet the people, the communities, and the industries which are situated upon them are entitled to a railroad service which shall enable them to compete upon an even basis with the communities and industries which are situated upon rich and efficiently managed r

of thousands of highway grade crossings, in our towns and cities and in the open country. Already a good beginning has been made; but it is as nothing compared with the work which remains to be done. The coming of the autom

w striking examples-many millions have been expended in this work within the past few decades. While the several communities-in some instances the state treasuries-have borne a portion of these expenditures, the burden has fallen invariably upon the backs of the railroads. Fortunately the railroads which have succeeded in absolutely elim

ome to the military necessity of our railroads, it is only a double-track railroad which is competent to handle any really considerable volume of traffic. And it is equally true that it is more than foolish to attempt to build or to develop any considerable mileage of branch lines until there are double-track main stems to serve it adequately. James J. Hill had all these things in mind whe

decade, they would have expended as high as $1,000,000,000 a year in permanent improvements.[2] Ten billions instead of four! Ten billions of dollars makes dramatic comparison even with our great trade balance that has accumulated during the European war-the excess of exports over imports already amou

ists in this year of grace, 1916-the epochal year in which the roads need to replenish their equipment; the year in which they find the doors of the money markets, open to almost all other forms of industrial investment, all but closed in their faces. By equipment, I now speak in

f Boston was using in its suburban service some 700 wooden passenger coaches, varying in age from twenty-five to forty

ing with unvarying monotony of the shortage of freight cars as bulletined by the American Railway Association-100,000 this week, 75,000 last, 150,000 next-who knows? Th

t cars some 347,000 were of a capacity of but 60,000 pounds or under-a type today considered obsolete by the most efficient operating man. A great majority of this latter number of cars was of all-wood construction. If the financial condition of the railroads had permitted, they doubtless would have been replaced long since with all-steel cars of far greater carrying capacity. This situation in the freight-car equipment is reflec

he past seven or eight years, a serious depreciation in the maintenance of the way and structure of the railroad. In the prosperous years from 1901 to 1907 a very great improvem

great preponderance of roads did not have earnings to make ordinary improvements, nor credit to provide the capital charge that would apply for improved rights of way, bridges, stations, freight houses, shops, and the like. Expert track engineers say that the loss in the mainte

olling stock an almost equal sum-$445,940,586. To these he further adds the dividends paid by the solvent roads out of their surpluses during the seven hard years-$784,563,406-and the depreciation of t

ld be handled. The very prosperous lines-representing some 100,000 miles, or less than half the total mileage of the country-probably have their contribution to this depreciation fund as an asset. In the case of the poorer roads-speaking financially-it doubtless has been applied to other purposes, in order to help them maintain their bare existence. It has come home to these, and with great force, that the g

. But the neglected rights of way, the ancient buildings, and the bridges needing rehabilitation on some of our railroads, the locomotives and the cars travel-racked and fairly shrieking for repairs, are all of them physical matters that must be set right before the sick ma