PREFACE WITHIN a few years the railways of the United States will celebrate the close of their first century of public service; in 1830 the "Tom Thumb" made its historic journey. At the beginning of that period the railway faced tremendous obstacles in the shape of mechanical imperfections, public scepticism, and the opposition of rival interests; at its close the railway has won recognition as an invaluable aid to social and industrial progress. Yet, strange to say, the difficulties of this highly developed and essential agency are no less today than they were nearly a century ago—they are merely of a different nature. The "railway problem”—of which valuation, labor, rate of return, efficiency, and government regulation versus operation are but a few phasesis now no less important than it was in the days of the railway pioneer, nor is it less complex. Rather, because of the economic interdependence which has been the outgrowth, largely, of railway development, that question is of vital importance and presents unusual difficulties. The American public faces no problem today the solution of which is more important and the nature of which offers greater challenge to the best minds that can be enlisted in public behalf than this, which deals with our basic agency of transportation. Democracies, like the individuals which compose them, have a quaint way of "locking the barn after the horse is stolen." Or, to put the matter another way, reliance is too often placed upon cure than prevention. And this has been no less true with respect to the railways than other undertakings. For almost a half-century, while the railway problem was developing, the public seemed ignorant of the possibility of conflict between its interests and those of private enterprise; when that conflict could be no longer ignored the public proceeded to deal with the "railway problem" with greater energy than judgment or statesmanship. As a consequence of this policy of "muddling through" the American public has made certain definite gains, but those gains have not come without loss-it has become increasingly apparent during the past decade that, in our dealings with this important agency, we must confess with the suppliant that "we have done those things which we ought not to have done and have left undone those things which we ought to have done." Of these errors of commission and omission there are many; to them attention will be directed in the discusIsion which follows. From this veritable morass of error there is but one way of escape and that way lies along the solid path of understanding. The solution of the "railway problem" will not follow from vindicative action—restrictive and punitive regulation has already failed; neither will the magic wand of gild socialism or government ownership and operation clear away all obstacles. What the ultimate solution of the problem will be is uncertain-if, indeed, there be an ultimate solution-but this much is assured: except as there is a better understanding of the nature of the industry and the character of its problems, we will make slow progress in rectifying past errors of policy and none toward the substitution of preventive for curative treatment. It is hoped that this book may contribute something toward that better understanding, so essential to constructive action. The history of the railway is fascinating in itself, but it is of greater importance because it furnishes the background of the "problem" with which the American public wrestles today. Therefore, to assist the reader in understanding the present situation, Part I treats rather fuly of the spectacular development of our railway net. In Part II the services of the railway are presented in a brief manner so that those unfamiliar with certain phases of its work may know the basic facts of the carrier-shipper relationship. Because the economic characteristics of the railway business are so generally misunderstood or ignored, Part III is devoted largely to an analysis which will, it is hoped, enable the reader to understand better the true and false in public policies, actual and proposed. In Part IV is treated historically and in some detail the development of public control over railway enterprise: the parts played in regulation by court and legislature, by state and federal governments are described. To the Transportation Act of 1920, both because of its recency and, even more, because it marks a departure from an earlier policy of excessive and ill-directed regulation, rather extended attention is given. Throughout the entire volume an attempt has been made, in the presentation of historical material and in analyses, to judge from a public point of view. For, after all, the prime purpose of the railway is public service, not a generous return upon invested capital or high wages to employees. Throughout the volume, too, facts have been presented in an impartial manner; yet, where these facts have seemed to justify a positive conclusion, no hesitancy has been shown in expressing such a conclusion. Even though the reader disagree with conclusions stated, as at points he well may, that disagreement itself will serve as a stimulus and a challenge. In addition to the facts, therefore, an effort has been made to give the reader the point of view which the writer has gained through a decade of study of the railway problem. Because of the number of those who have assisted in various ways in the completion of the task which this volume represents, it is impossible to render acknowledgment to all by name. Nevertheless, because of the important part played by certain ones, these cannot be denied appreciation. To Dr. Richard T. Ely, Professor of Economics, and Director of the Institute for Research in Land Economics and Public Utilities, I am deeply indebted for his personal interest and for many valuable suggestions based upon a reading of a considerable portion of the manuscript. To the Hon. L. E. Gettle, Chairman of the Wisconsin Railroad Commission, I am also deeply indebted for helpful suggestions and criticisms in connection with certain chapters; likewise, and for similar cause, to Professor L. C. Sorrell, University of Chicago. Mr. Bruce Knight, of Dartmouth College, and Mr. John P. Troxell, of the University of Wisconsin, have also made me their heavy debtor. Among those who served loyally and well in the collection of material and its embodiment in final form Miss Harriette L. Greene, the late Mr. Philip Clark, and Mr. Herman Schmidt are particularly deserving of thanks. Mrs. Merle L. Schmidt aided greatly in the preparation of the manuscript, and the assistance of Miss Louise Schmidt and others has been invaluable. To these friends, to others, and to many students who have suffered patiently for several years past with much of this material in mimeographed form, I want to express my abiding appreciation. A generous portion of such merit as this volume possesses must be credited to them, the remainder to an interest in the railways which has grown steadily since the author, as a lad, dangled bare legs over a drift-fence in the great Southwest, and watched "limited" and way-freight go roaring past. Errors of fact and conclusion have perhaps crept into this work, despite earnest effort: the "perfect" treatment of a complex problem is still unwritten. But it is only by constant sifting and winnowing that the truth will be found and made available. To that end it is hoped this volume contributes something. SIDNEY L. MILLER Madison, Wisconsin, September 3, 1924 |