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on the Railroads
The Story of the Regional Advisory Boards, Where Railroad Men and Shippers First Got Together and Achieved What Secretary of Commerce Hoover Termed the Outstanding Industrial Accomplishment of 1923
BY JOHN K. BARNES
N ONE of the old army posts in the customers and the danger perhaps of in
West a cavalry rookie went down to terested and ignorant advice. the stables to pick out his first The railroads, however, having passed
He told the stable sergeant through exploitation, through regulation, that he wanted a nice, gentle horse. through public hostility, through governThe sergeant said:
ment operation, have come to the point What is the matter, haven't you ever were they not only agreed to but even ridden before?"
suggested the creation of the shippers' "No," answered the rookie.
advisory committees. “Well," replied the sergeant, “Here The conditions which allow these is the very animal for you. He has never committees grew out of the war. been ridden before; you can start out
GOVERNMENT MONOPOLY together."
This story was told last summer at Bill HE necessity for unified command ings, Montana, to picture the relations of during the war overrode public prejuNorthwestern shippers to the North- dice against combinations and monopewestern railroads, for until recently the lies. Then a central control was estabshippers and the railroads that dealt with lished over all the roads of the country. each other every day were strangers to There was unified command over the their common interest. The story was movement of cars. When operation told of the first meeting of the Northwest of the roads was later taken over by Regional Advisory Board of the American the Government, this unified command Railway Association, where the shippers was continued under the
under the Directorfor the first time were placed in the saddle. General. Then, when the Transportation The forming of this and the other similar Act was passed, providing for the return advisory boards in other parts of the coun of the roads to their owners and opertry is one of the clearest signs of a new era ators, specific provision was made in the in railroad conditions in America. The law for continuation of this central conidea underlying the advisory boards is as trol. The Interstate Commerce Comsimple as all great inventions. It was mission, having no machinery to accommerely to have the advice and coöperation plish this, simply directed the roads to of the users of the railroads given to the continue to operate the car service managers of the railroads. It is a very division which the American Railway simple and obvious idea and yet to carry Association had built up. Furthermore, it out means that the railroads are willing this new railroad law removed the shadow to show their customers the inner work of the Sherman Anti-Trust Law from ings of their business. Not so many busi over the roads and directed that they be nesses have reached the point where they consolidated into a limited number of would welcome such scrutiny from their systems.
Results of Coöperation of Shippers and Railroad Men
How James J. Hill and E. H. Harriman, meeting of the Minneapolis Traffic Associwhose Northern Securities' “trust” and ation and suggested the formation of a Union and Southern Pacific Railroad shippers' board that would furnish the merger were disrupted by the courts, necessary forum for shippers and railroad must smile at this in the Great Beyond, men to get together on all transportation possibly wishing that they had not lived problems. On January 16, 1923, the so soon! Few people realize the sig- Northwest Regional Advisory Board, nificance of the new era that the enact- composed of shippers, state railroad ment of this legislation is ushering in. commissioners, and farm bureau officials,
With the power to operate every from Minnesota, North and South Dafreight car in the country, regardless of kota, Montana, northern Wisconsin, and ownership, under one authority, there was, Michigan, was organized, the first board of course, the danger that this unlimited of its kind in the country, and it impower might be abused and arouse the mediately began work. Since then nine resentment of the shippers. Before this other regional advisory boards have been danger developed the shippers themselves organized, and to-day the shippers in were put in the saddle. The idea of doing every section of the country except around this originated with Mr. Donald D. Conn, Pittsburgh, in New England, and in the manager of the public relations section of Pacific Northwest are coöperating the car service division of the American through these boards with the railroads. Railway Association. Mr. Conn was the It is a voluntary service on the part of traffic representative for large shippers the shippers and each one of them pays before he went with the American his own expenses to attend the meetings Railway Association; that may help ex
of these boards. Some 5,100 shippers are plain why he thought of the plan. He now coöperating in this way. Railway appreciated the force of Charles Lamb's representatives are present to advise remark that he did not want to meet a with the shippers and learn their needs certain man because he disliked him and but they are not members of the boards if he met him he feared he would lose his and have no vote in their proceedings. dislike. When Mr. Conn was asked if he would become manager of the public
THOU SHALT NOT COVET THY NEIGHBOR'S relations section, he replied that he would
FREIGHT CAR! like nothing better; he was eager for the OW let us see some of the results of opportunity to bring the railroad men this coöperation. In the crop-moving and the shippers together so that they season beginning in July, 1922, the South would lose their dislike for each other. Dakota Railroad Commission received
more than eight thousand complaints as ENEMIES FACE TO FACE
to car service in that state. In the season HE first real opportunity to do this of 1923 they had one complaint, which
came in the Northwest in the fall was taken care of in four hours' time. of 1922. There was a shortage of cars That did not mean a promise of cars to move the wheat out of that territory. was made in four hours' time, but cars Entire communities were bankrupt, due were put where they were needed in to the lack of box cars at that time. A four hours from the time the complaint meeting of shippers and railroad men was filed. The North Dakota Railroad was called in December at St. Paul, and Commission received five or six thousand Mr. Conn went out to confer with them. complaints regarding car service in 1922 Little progress was made at that meeting. and only three in 1923, and these were The shippers sat on one side of the room, taken care of in less than twenty-four the railroad men on the other, and the hours. main result was the blowing off of a One of the greatest causes of difficonsiderable accumulation of bitterness. culty and dissatisfaction in the NorthTwo days later Mr. Conn addressed a west wheat country was over the dis
tribution of cars in time of equipment any such report.
Reasonable men can face shortage. Each shipper wanted to get a any problem and reach a reasonable con"reasonable advantage" over his com
clusion. Now, before that meeting at ten petitor. The various state commissions o'clock in the morning I want a report and 1 tried to lay down rules for the guidance
want in your report workable rules that all of the roads at such times, but some of
have agreed on." Well, that was done and these conflicted and it was impossible for morning and every member of the grain com
that report was ready at four o'clock in the the roads to follow them. They were
mittee had agreed to it as reasonable. They between the devil and the deep sea. got together, and a little give and take here and The whole matter was a bone of sore there, overcoming this reasonable advantage contention when this Northwest Advisory over the other fellow, a little give and take by Board was organized. The car service reasonable men, was all that was necessary. division of the railways asked the board
Those rules were reported to the board and to draft its own rules, and the story of
were unanimously adopted. how these rules were arrived at throws Chairman Gormley, of the car service light on the value of these boards in division of the railways, immediately bringing about coöperation among shippers announced to the shippers that the rules as well as coöperation between the rail- they had adopted would be put into effect roads and the ship
and followed by the pers. Mr. J. W.
railways. As a matRaish of the South A PANACEA FOR THE ter of fact they did Dakota Railroad
not have to be used Commission, a
because in 1923, almember of the grain have found the way of settling
though the railcommittee of the
roads handled by their operating problems, which advisory board,
far the largest traftold the story as
are also the shippers' problems, fic in their history. follows:
but they seem likely to have found there was no car We had a meeting the way to settle their political
shortage, and there of the board in Sioux
and financial problems as well." has been none since. Falls in July, 1923.
The spirit of coöpThe grain movement
eration among shipwas just about to commence, and I think at two pers engendered by these boards, and the or three meetings of the board prior to that time
accurate advance information they give we had spent a lot of time in wrangling over rules the railroads as to their future needs, for the distribution among shippers of grain helps to account for that. As an example, equipment. The grain committee had met, I think, at Fargo and presented a report to
consider the account given by Mr. J. L. the meeting of the board at that time. The
Brown, of the Chicago, Milwaukee &
St. Paul Railroad: report was rejected because the shippers themselves in this particular line were not in full accord. Then at the July meeting this About the time the Trans-Missouri-Kansas committee was instructed by President Reed Regional Advisory Board was organized (President of the Minnesota Farm Bureau and (May, 1923). we were making an estimate on Chairman of the Northwest Advisory Board) the movement of Kansas wheat, which is the to get busy on some car distribution rules and early crop movement of wheat on our railroad to report some reliable rules. That committee along in June. We made some preliminary met the night before the July meeting at surveys among some of our agents and the Sioux Falls, in a hot room in a hotel, and at one best estimate we could get was that about o'clock in the morning we reported to Chair- 5,000 cars would move over our railroad man Reed that it was impossible to agree through Kansas City. Now with a movement upon rules which were satisfactory and would of that kind we would concentrate on the be accepted as workable by the different grain movement of cars into that district. I went interests represented. I remember that Chair- to the first meeting of the regional advisory man Reed said: “Gentlemen, I will not accept board, and after the committee on grain had
The Sequel to a "Paralysis of Transportation”
made a preliminary report, it looked as if 500 in their history, and it was handled cars at the outside would move via the Mil- practically without any complaint, withwaukee instead of the 5,000 estimate which we out any car shortage, without any had previously secured. So, instead of exerting transportation difficulty, and on top of ourselves to get 5,000 cars to that district we
that at the close of that period of heavy worked in about 600 cars and took the surplus traffic there was still maintained a proper over the 600 and moved them into the North
distribution of cars among different western states, particularly Montana.
sections of the country. Indeed a reOBSERVE CAR SERVICE RULES markable achievement, especially imNOTHER of the important aids to pressive when one remembers that most
the cause of efficient transportation authorities on American railway matters rendered by these regional advisory had for years predicted a complete breakboards is in getting shippers to load and down of our transportation system when unload cars promptly, load them heavier, such a load was placed upon it. and to observe car service rules, which, Mr. H. G. Taylor, President of the among other things, provide for the National Association of Railway and loading of cars in the direction of the Utility Commissioners, has said, “Followowning road so that equipment will ing eight or ten consecutive years when get back as speedily as possible to the congestion and shortage produced a road which owns it, where it can perform paralysis of transportation, the record of the service for which it was originally 1923 is little short of marvelous.” And bought. At the office of the car service Herbert Hoover, Secretary of Commerce, division in Washington a record is kept commended our transportation movement of the location of every car in the country during the year 1923 as the “outstanding and if the cars are not moving, either industrial accomplishment of the year." loaded or empty, in the direction and in Last year, the railroads, with about 4 per proper numbers to meet the coming cent. less traffic, repeated this accomdemand for them, orders go out with the plishment, thus indicating their ability to authority of the Interstate Commerce continue to do so. Commission back of them to the roads
A BILLION DOLLAR PROGRAM which have the cars on their lines to send them at once to the points where they are HE executives of all the railroads needed. Particular watch is kept of the of the country met in New York in movement of Western cars westward, for April, 1923, and, impelled by their fears those are the cars that are specially of what would happen to the roads if designed and are needed for the shipment they again fell down on their job, anof grain. In 1923, prior to and during the nounced a program of a billion dollars of crop movement, about 800 of these cars expenditures for new facilities and set for a day were moved westward through the their operating departments the standard Chicago gateway on mandatory orders of the moving of cars at the rate of thirty from the car service division. In 1924, miles a day. To the man who travels two more empty Western cars moved back or three hundred miles a day in his autothrough Chicago every day without any mobile that seems slow, but when he orders from the car service division, due realizes that it includes the time that cars simply to better observance of car service are standing at terminals, at way-stations, rules by both railroads and shippers. and on sidings waiting to be loaded and This means that eastern shippers, who in unloaded, and covers all cars on the roads, 1923 might have been deprived of cars whether in use or not, he gets a different that they could use because of these man- view of it. In 1922 the average car datory orders, were not in 1924 running movement was twenty-four miles per any danger of losses from this cause. day. In 1923 the mark of thirty miles
In 1923, the American railroads han- was reached and that was equivalent to dled the greatest volume of transportation adding about 650,000 cars to the country's
railway equipment. At that New York This brings us to another view of this meeting Mr. Conn's plan of organizing coöperative movement between shippers shippers' regional advisory boards was and the railroads; to the view which, also approved. It was the coöperation from the railroad's standpoint, adds the thus secured from shippers, the much strongest ray of sunlight to the entire greater efficiency of railroad labor as railroad picture. At the Billings, Moncompared with recent previous years, and tana, meeting, to which reference has been the desperate determination of railway ex- made, Mr. Curtis F. Mosher, Assistant ecutives to win the battle against govern- Federal Reserve Agent at Minneapolis, ment ownership that brought about this and chairman of the executive committee improvement in operations which Sec- of the Northwest Regional Advisory retary Hoover called the outstanding Board, said this to the assembled shippers: industrial accomplishment of the year. I am satisfied that we could afford to Mr. Mark W. Potter, before his retire
abandon any thought of railroad rate reduction ment from the In
if we were certain we terstate Commerce
could get 100 percent. Commission, said in RESULTS OF THE
of railroad service. his office in Wash
I would REVOLUTION ington: “American
rather see the freight railways, during the
“In the crop-moving season of rates stand until the 1922 the South Dakota Railroad
railroads can reduce past twoyears, have Commission received more than
them of their own been operated more
volition, as I believe efficiently than any eight thousand complaints as to
they will do eventutransportation sys- car service in that state. In the
ally, if they will give tem in this or any season of 1923 they had one com- us, on the other hand, other country has plaint, which was taken care of in the same kind of railever before been four hours' time. The North Da
road service that operated under any kota Railroad Commission re
they gave us last fall conditions." Mr.
(1923). I base this on ceived five or six thousand comPotter believes that
this statement of fact: our railways can be
plaints regarding car service in Two years ago we had operated still more 1922 and only three in 1923, and an entirely different
situation and to my efficiently, and rethese were taken care of in less
own personal knowlfers specifically to than twenty-four hours."
edge the losses that the handling of
were caused to shipfreight at terminals
pers of grain and as one of the problems yet unsolved. especially to shippers of livestock from out He also has a vision of the time when the here in our northwestern country exceeded any railroads will set up reserves in good times possible sum that could have been obtained if to be spent on their properties when times
we had been able to mass all of the various
a are slack, in place of the present practice proposed rate reductions together. When a of spending money in good times and
man has cars ordered for two weeks for a stock
shipment and does not get them and he has curtailing expenditures when revenues
to hold his shipment on feed, what does it fall off. Under such a plan the roads' mean? It means that all of the profit is gone money would go farther, as they would
out of that operation and a loss has occurred not be competing for labor when there are and it cannot be recovered. Now that is what other demands for it, and their expendi- we have been up against in this territory and tures in slack times would have an effec- it was the result of a lack of correlation betive stabilizing influence on business gen- tween the shipper and railroad and a lack of erally.
understanding in regard to facts about these He acknowledges that this means the
traffic movements and car supply required in
order to handle our principal products. railroads will have to be allowed to earn
If we can help the railroads to improve the the money to set up these reserves. efficiency of their service we are going to do