Railroad industry

“ It is doubtful whether the aggregate plant used in all manufacturing industries can equal it in value. The capital engaged in banking is but a trifle beside it. The world's whole stock of money of every kind—gold, silver, and paper—would purchase only a third of its railroads.
Yet these facts by no means measure the whole importance of the railroad in the modern industrial system. The business methods of to-day are in one sense the direct result of improved means of transportation. The railroad enables the large establishment to reach the markets of the world with its products ”

“ This, in the growing, progressive, and expanding states of the West, is a steady and constant complaint, and it requires much time, money, and energy for the railroad-owners and officers to keep the supply of transportation up to the demand. The complaints come in for more freight-cars, for more passenger-trains, for better passenger-stations, for more side-tracks, for more switch-engines, for under-crossings and over-crossings in growing cities, for branch lines into new and undeveloped sections of the country ”

“ Its influence has grown steadily with the growth of competition by water and motor, with the growth in the size of the individual railroad system, with the growth in the dependence of railroads for their revenues upon long-haul freight traffic and with the growing length of the average haul. ”

“ In any event, however, the general introduction of the interlocking apparatus into the American railroad system may be regarded as a mere question of the value of land and concentration of traffic. So long as every road terminating in our larger cities [198] indulges, at whatever unnecessary cost to its stockholders, in independent station buildings far removed from business centres, the train movement can most economically be conducted as it now is. ”

“ One operator, after being forced for years in this way to sell his product to the railway mining company at a very low price, was obliged to build a railway of his own in order to reach other lines of railroad and so have a fighting chance for cars. ”

“ Contribution of the railroads to recent national development.—The importance of this change in a country of great distances can scarcely be exaggerated. It has transformed the railroad from a luxury for the use of passengers and high-class freight to a necessity for the producers and consumers of the commonest articles. In 1860 even a ware like wheat could556 not pay the expense of transportation over a distance exceeding many hundred miles, and distant freight traffic was restricted to manufactures and the most valuable of farm products, such as live stock. ”

“ The second is that most manufacturers can warehouse their product, hold for rising prices, and sell at some future time. The railroad cannot do this. It must have ample transportation ready at any given time and place, and if it is not used then and there it is lost, not only to the railroad, but to the consumer. The manufacturer of transportation must always be ready to furnish the maximum amount of transportation for the use of the American people. ”

“ This economy is reflected in a reduction of rates which are now in America the lowest in the world, and which steadily fall. In capacity for business united with stability of roadbed, mainly due to stronger and stiffer rails and to adapted improvement in rolling stock, railroad progress in the past fifteen years is equal to that of the sixty years preceding. With rails increased to a weight of 100 pounds to the yard there is shown, even in passing over the joints, an astonishing degree of smoothness as contrasted with the jolting action of rails comparatively low and light. ”

“ Henry C. Adams, statistician of the Interstate Commerce Commission, says in his third annual report:
"It certainly appears ... that the motive for ownership in railroad stock is quite different from the ordinary motives which lead men to invest in corporate enterprises, thus presenting an additional proof that railways are a business not subject to ordinary business rules."
There is no safer business in the world than railroad transportation; there is none that has less elements of uncertainty; none whose returns in the aggregate are less varying. ”

“ When one sees the ordinary operation of the railroad going on without much interruption, except from heavy weather, one does not always realize the great work that has been done in creating the railroad machine in the United States, and the really vast amount of expense and work to keep it going day by day. It seems very simple to see the passenger-trains run in and out of the station, to order the freight-car and send the grain to market, to telegraph to the nearest large town for supplies and in twenty-four or forty-eight hours have them delivered. ”

“ It is over three times the annual gross revenue of the railroads, and it amounts to nearly one half of the existing railway capital represented by stocks and bonds. The question of obtaining the $8,500,000,000 necessary to make railroad facilities equal to the expanding traffic of the country during the next five years, therefore, constitutes the most important problem now confronting business men. ”

“ There are three important differences, however, between the manufacturing business and the railroad business. The first is that manufacturers can close their establishments, reduce their expenses to the necessary caretakers and lose the interest on their investment until such time as their inclinations or the demands for their particular articles make it worth while to operate their plants. The railroad, however, cannot stop; once started, it must go on unless the owners choose to abandon it absolutely, and lose not only all chance of interest on their money, but the entire principal as well. ”

“ The railroads have been the greatest single source of large American fortunes, and the men who control the large railroad systems are the most powerful and conspicuous American industrial leaders.
Important, however, as has been the direct effect of big railroad systems on the industrial economy of the country, their indirect effects have probably been even more important. In one way or another, they have been the most effective of all agencies working for the larger organization of American industries. ”

“ As it is, the enormous consumption of railroad ties presents a problem concerning a continual supply of these indispensable features of railroad construction which railroad men all over the country are beginning to seriously consider. There are two hundred thousand miles of railroads in the United States, which, with twenty-five hundred ties to the mile, require for their construction 500,000,000 ties, or calling the life of a tie eight years, an annual supply of 62,000,000. ”

“ Without efficient railroads the country cannot develop any more than it can develop without efficient agriculture and safe and sound banks. Here are a few figures that will show what the owners of the railroad have done in producing a transportation machine to handle the people and products of the country:—
The American railroad system has been created in its present form since the Civil War, and practically built and rebuilt within the last forty years. ”

“ Similarly, a railroad organized to respond efficiently to all the varied demands upon it as a common carrier, by the public, and as an investment by its owners, becomes almost a living organism. That the barrel of flour may be safely delivered and the fifty cents reach the company's treasury, and a part of it the stockholder's pocket, the whole organization outlined in the diagram must thrill with life, and every officer and employee, from president to car-greaser, must discharge his special functions. ”

“ The modern method of the large central with its immense sphere of influence, necessitates that the railroad be thoroughly equipped and efficiently managed. The old practice of carrying the cane from field to factory in an ox cart has passed into disuse along with the small mill, and has been superseded by the present railroad, with standard gauge roadbeds, heavy rails, steel cars, powerful locomotives, and schedule running, the whole being under the direction of a practical railroad man, as train despatcher. ”

“ A national railroad structure well operated, with efficiency, with economy, with vision, with a broad human relationship, will not have to worry very much about the sale of its securities or about interference from fussy regulatory bodies. ”

“ Improvements in the operation of railroads.—Equal in practical importance to the extension of the railroad system were the improvements effected during the period in the construction and operation of the lines. This was the time in which steel rails and bridges were introduced, which permitted the use of more efficient locomotives, drawing heavier trains, and so reducing the expense of carriage. Lines which had been constructed in short sections under the control of different companies were now merged in great corporations, operating thousands of miles of track. ”

“ The railroad will probably build the greater part of its freight equipment, although in these days of the supplanting of wood by steel in car-construction the companies are apt to stand appalled at the cost of the steel working machinery, and to buy their cars direct from the manufacturers very much as they purchase their locomotives. Passenger equipment is almost invariably secured in this way. It is a big railroad indeed that seeks to construct for itself the huge travelling palaces that the passenger of to-day has come to demand for his comfort. ”

“ It is very much to the interest of the future growth of the United States to have the railroad business offer such rewards to the investor that money will flow freely into building up the transportation machine, and to offer such attractions to the best talent of the country, that men will engage in the business as freely as they engage in banking, in law, in medicine, in manufacturing, and in agriculture. ”

“ Too many railroads are run, not from the offices of practical men, but from banking offices, and the principles of procedure, the whole outlook, are financial--not transportational, but financial. There has been a breakdown simply because more attention has been paid to railroads as factors in the stock market than as servants of the people. Outworn ideas have been retained, development has been practically stopped, and railroad men with vision have not been set free to grow. ”

“ The government greatly encouraged railroad construction by subsidies, and during the decade following 1855 the development of the railway system of the country was rapid. More than thirty companies have been formed, which have built about twenty main lines, aggregating 6,200 miles. ”

“ Our drives from up-country are sometimes held up a whole season when a bad jam forms in dry times. Every year in dynamiting these jams thousands of feet of logs are shattered. More are split on the ledges. We have agreed that we need a railroad. Considering our losses, we can afford to pay well for having our logs hauled to the smooth water. If you and your friends will finance and build such a road, we'll give you free right of way, turn over to you annually twenty million feet of timber for your log trains, and give you the haul of all our crews and camp supplies. ”

“ Individual enterprise has given us what is admittedly the most efficient railroad system in the world. It has done so whilst making our average capitalization per mile of road less, the scale of wages higher, the average rates lower, the service and conveniences offered to the shipper and the traveler greater than in any other of the principal countries. ”

“ But though it does render some classes of labor useless, and throw out of employment some persons, it creates new labor far more than the old, and gives much more than it takes away. Twenty years of experience shows that the diminished cost of transport by railroad invariably augments the amount of commerce transacted, and in a much larger ratio than the reduction of cost. It is estimated by Dr. Lardner, that 300,000 horses working daily in stages would be required to perform the passenger traffic alone, which took place in England during the year 1848. ”

“ He keeps check on the supplies that he issues. His stock of blank forms, alone, would do credit to a wholesale stationery house in a sizable city; for the railroad is a liberal user of printer’s ink in its own devices. He must be thrifty and he must be economical; he must look to it that the railroad’s money is not wasted in the purchase and use of its supplies. ”

“ In the former, however, it is complicated more often by the fact that the lines of a railroad extend through many States, with terminals in one or two, and, further, that the railroads have many subsidiary, controlled, or dependent companies, such as coal, lighterage, terminal, car, warehouse, contracting, elevator, stock yard, and supply companies, often owned, wholly or in part, by men in the railroad management. ”

“ The handling of a railroad locomotive requires more skill than the handling of a freight team, and the engineer commands higher wages than the teamster. The railroad by vastly increasing commerce has multiplied the number of persons engaged in the handling of passengers and freight, and it has at the same time improved the character of the work done and raised the intellectual standard of those employed. ”

“ Such a plan is unnecessary, because the development of the railroad business in this country has been such that we have the most effective service as a whole, the lowest rates as a whole, the highest wages as a whole, and the most progressive management of the business as a whole, of any country in the world. And all of this has been developed in fifty years by the energy, ability, and ingenuity of the American business man. ”

“ By force of the enormous shipments the Armours control they have compelled railroad after railroad to make the exclusive contracts they desire, fix rates at their dictation, collect exorbitant icing charges, give them an excessive mileage allowance, return their cars empty if they will at high speed instead of detaining them for loading back, etc. ”