to consider vital matters. A "wheel within a wheel," so to speak, is therefore peculiarly essential to the successful administration of the larger railways, and is characteristic of practically all.

IMPORTANCE OF THE EXECUTIVE COMMITTEE

This executive committee is composed of from three to seven men, though the typical organization tends toward the smaller figure. As members of this committee, the board selects from its own number those most familiar with railway operations and best situated by location and business interests to deal with problems as they arise. The chairman of the board of directors normally serves, ex officio, as chairman of this active body and, if the president of the property is a member of the board of directors he, too, is usually designated as a member of the "inner circle." Since the primary responsibility and the greater burden of the work performed by the executive committee usually fall upon the shoulders of the chairman of the board and of the committee, this individual must be a man of broad training and experience in the railway field, possessed of exceptional judgment—a diplomat, statesman, financier, administrator, and railway expert all in one; otherwise both the immediate and long-time interests of the property will be prejudiced. The three outstanding matters with which the committee is concerned are the supervision of administrative policies, the planning and administration of financial matters, and the direction of the legal interests and policies of the corporation.

THE CORPORATE OFFICERS

A third function exercised by the board of directors acting as a unit, though action on their part may often be but little more than the approval of recommendations made by the executive committee or by the president of the railway, is the selection of those major officers of the corporation

who are immediately responsible for the management and direction of the property. Although there is a considerable variation among railways as to the number of men so chosen, the selection of the president, as well as of those immediately subordinate to him and directly responsible for operations, traffic, accounting, finance, and law requires the formal approval of the entire board of directors. The men thus chosen serve until they are superseded by definite action, or until resignation removes them from the service. The number of such officers subordinate to the president and reporting directly to him varies greatly among the different roads and is determined largely by the organization of the property for operation. Certain systems have two or more vice-presidents in charge of operations, with a given territory subject to the jurisdiction of each, and like divisions may exist in other fields, as traffic, though in such cases one man is generally made the responsible head.

In dealing with the railway, public interest centers neither upon the stockholder who theoretically directs the business, nor upon the board of directors which is chosen to serve him. Frequently the active group composing the executive committee is little known. Attention is fixed, rather, upon the administrative officers whose relationship to the property and to the public is much more obvious and direct. With these men the public treats in person; upon their ability to deal with that public fairly and intelligently depends in large measure the success which will attend the operation of the property. Yet the plebeian "local agent" and the passenger crews are often more responsible than high-ranking and highly paid officials for friendliness or hostility to the management, even to the railway industry as a whole. Upon the major officers chosen by the directors rests a dual burden, the responsibility of building up an effective organization, a task which involves the development of employee loyalty and of efficient management, and the obligation of so conducting the business in relation to the public and to the opportunities of the areas served

that the maximum long-time interest of the railway will be served.

THE PRESIDENT

Among the various railway officials the president is first in responsibility and outstanding in the public mind. He is chosen by the directors with the greatest care, for upon his capacity and efficiency depends very largely the success of the property. To him report both the staff officers, who act in an advisory capacity, and the line officers, who direct the various operations immediately incident to the rendition of service. Although invariably possessed of specialized training in some phase of railway work, it is impossible for the president to have a detailed knowledge of all matters subject to his control. His success, therefore, depends upon his soundness of judgment in the choice of lieutenants. The evolution of the presidential function in the railway field in America is interesting. Kirkman says: "In the early history of railroads the president of the company rarely participated in its physical management. Such matters were left to the superintendent. The president was usually a man of wealth, chosen with a view to the effect his name would have upon investors rather than his knowledge of railroad details. His responsibility, therefore, was merely nominal; the operating officer was expected to consult with him and listen to his views when he had any to express. He performed the dignified office of chairman of the board of directors and was also a member, ex-officio, of its various committees. He signed its bonds and in some cases certificates of stock. He was in many cases merely a figurehead." 1

Gradually, however, there developed a tendency to relegate this imposing figure to the chairmanship of the board of directors and to select as active head of the organization a man trained in railway operations. Today the tradition 1 Kirkman, M. M., The Science of Railways, vol. II.

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of movement "up from the ranks" has become so firmly fixed that it is difficult to conceive a large railway corporation headed by a man who has not spent long years of apprenticeship in "learning the railroad game" from one angle or another. An examination of the training received by the men heading fifteen of the more important railways in the United States in 1924 1 shows that six of these executives received training as operating men, that two reached the position occupied by them through the traffic department, that another four are engineers by profession, and that the remaining three spent their period of apprenticeship in the legal department. In the past, operation and traffic, particularly the former, have offered the best avenues of approach to the presidential responsibility, but this is becoming less true as the problems facing the railway administrator become more complicated and more often present important financial and legal difficulties. Heavier burdens may be thrown upon the chairman of the board of directors and of the executive committee, however, leaving to the president only the duties of an administrative officer in charge of active operations. This policy, indeed, has been adopted by certain organizations, and is particularly characteristic of the so-called Harriman properties.

The responsibility and power of the active head of a great railway organization is perhaps best shown by the presentation of detailed facts. Many such executives exercise primary control over a property valued at approximately a billion dollars or more, and must direct the disposition of annual revenues varying from one hundred million dollars to as high as four times that figure. This official is also the supreme commander of an army of subordinate officials and workers which often numbers in excess of 50,000 and, in

1The New York Central, Pennsylvania, Baltimore and Ohio, the Erie, the Southern, the Illinois Central, the Southern Pacific, the Atchison, Topeka and Santa Fe, the Chicago, Rock Island and Pacific, the Union Pacific, the Chicago and North Western, the Chicago, Milwaukee and St. Paul, the Chicago, Burlington and Quincy, the Great Northern, and the Northern Pacific.