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THE UNITED STATES RAILROAD ADMINISTRATION (CONTINUED)

I bear no brief for Mr. McAdoo. On the contrary I have been one of his most persistent, although, I trust, consistent, critics. In the columns of the “Saturday Evening Post” and other widely circulated publications I have tried to set down fairly, impartially, and thoroughly both the accomplishment and the shortcomings of that remarkable organization, the United States Railroad Administration. And with this final chapter written I shall close for myself, I hope forever, the recital of its history.

It is but fair to say that even though McAdoo’s great economies of operation through radical consolidation and reroutings were obvious, it took courage, none the less, to put many of them into effect. Tradition, the sentiment built up through long years of hot competitive practice, local pride and local spirit here and there and everywhere, had to be met and overcome successfully, even though the war-time issue was to come into the reckoning. McAdoo has never been known for lack of courage. He reached out here and he reached out there and generally he attained his desires.

“You talk about Fairfax Harrison. Of all the men in authority in Washington, it was McAdoo who really played the lone hand.” So speaks a man who from the very beginning of the war overseas made a careful study of the Administration and its human components. He speaks the truth—and does not.

“The trouble with McAdoo,” says a radical who is immensely interested in the entire railroad situation, “was that he was in the hands of the old railroad gang and controlled body and soul by them.”

He also speaks the truth, and does not. I presume that we may translate the “old railroad gang” into the group of experienced and very able and honest railroad executives that the first director-general gathered about him, and who without exception rendered him efficient service. Mr. McAdoo himself says this. And he ought to know.

In the preceding chapter we saw some of the sweeping changes and economies that were wrought in the freight operation of the railroads under governmental control; the passenger ones were even more dramatic. We have already seen how at a fell swoop the excellent service between New York and Washington was smashed almost into smithereens, and how the good horse-sense of the first director-general came to the rescue then and there and restored a service that would enable men to travel back and forth between these cities on their war-time errands in a degree of comfort sufficient at least to render them best able to carry on their press of unusual duties. Other services were not so restored. The Broadway Limited, the crack twenty-hour train of Mr. Rea’s Pennsylvania railroad, was an early sacrifice. In May, 1918, Mr. McAdoo approved of a sweeping economy in the western portion of the country, the territory west of Chicago and St. Louis. In this great slash alone estimated yearly savings of 11,728,000 passenger train-miles were made. These savings were accomplished chiefly by abandoning duplicate and expensive fast train services (please also note this for future reference) between Chicago and the Pacific coast cities and assigning, supposedly to the shortest and most direct route in each case, the fastest through service. Under this scheme the Santa Fé became the preferred route between Chicago and Los Angeles; the quite logical grouping of Chicago and Northwestern, Union Pacific, and the former Central Pacific division of the Southern Pacific, from Chicago to San Francisco; the Burlington and the Northern Pacific to Portland, and the Milwaukee to Seattle.

These selections were made arbitrarily. They cost many heartaches, however. The Rock Island—the shortest route between Chicago and the important railroad gateway of El Paso, and but thirty-five miles longer between Chicago and Los Angeles—watched the decapitation of the Golden State Limited, which it had worked so hard to upbuild, with feelings of great bitterness and regret. It felt down in the bottom of its heart that it had been discriminated against. When peace came again—if ever it should come again—and the railroads were restored to their private operators—if they ever were to be restored again—the Golden State Limited would have to start once again at the very bottom of the ladder.

The most notable consolidations of passenger service under the government administration came, however, in the central portions of the land. In the district about Chicago under private and competitive control there was (and to-day is once again) a great waste of through passenger-train service. With six competing railroads from Chicago to the Twin Cities, six to Omaha, six to Kansas City, four to St. Louis, and three to Cincinnati, and with almost every one of these roads trying to maintain a service as good as its competitors, if not better, there was and is a vast preponderance of through passenger-trains, many times to the cost of weaker or branch lines, even of well-to-do-systems. It is not at all uncommon for a branch line, particularly if it passes through a non-competitive district, to be paying with its all-too-few and overcrowded local trains for the extravagances of the underfilled through ones upon the main line. The little wheezy locomotive and the two forty-year-old battered day-coaches of the down local to Willettsburg or Sand Corners was and still is the upkeep of the lordly limited all-Pullman and aristocratic from the point of its crack new locomotive to the far tip of its brass-railed observation-platform. Do not forget that. And also do not forget that a good proportion of the voting population of any State lives upon the branch lines, which may have accounted in the past for some pretty radical railroad legislation and regulation. Here is a point that the average railroad operator, with his nose close down to freight ton-miles, may overlook. He may have and frankly express a contempt for the passenger service but it is at all times the chief point of actual contact between the railroad and its patrons.

Moreover from Chicago to the group of cities a night’s ride distant from it in several directions the plethora of superb trains moved in competitive squadrons. By that I mean, even though there were on four railroads between that city and St. Louis before the coming of the war fifteen fast through trains in each direction, there were to all practical purposes but three or four. For competition so bunched the trains that there was an important group of through expresses leaving Chicago at noon and another important group at midnight, with two or three less important slower expresses at nine in the morning and again at nine in the evening. An intelligent centralized management would seemingly have found it possible so to distribute fifteen through trains that there would have been a through train from Chicago to St. Louis—or the reverse—almost each workaday hour. The through service between New York and Washington and between New York and Boston is so distributed.

Even under centralized control, however, such an even distribution of passenger-trains between midland cities of the United States is not entirely possible. For even in the case which we have before us, there are important connections to be reckoned with, both at Chicago and at St. Louis. These trains must be met, and if the best through passenger-trains for the Southwest leave the St. Louis Union Station at about nine o’clock in the evening, the resident of Decatur, which is on the main line of the Wabash, and of Springfield, which is on the main line of the Chicago and Alton, should in all fairness have an equal chance at them.

Yet, despite this hindering factor, the McAdoo centralized authority succeeded in cutting the fifteen through trains in each direction down to nine and in slightly spreading the leaving times. The result apparently worked little hardship to the through traveler of war-time days between Chicago and St. Louis. The train on which he rode might be a little longer and a little better filled than usual, but its running-time and its equipment, save for the probable elimination of the observation-car, were virtually unchanged. And 15,706 train-miles and 9,538 tons of coal were being saved in Chicago-St. Louis passenger service each month.

But how about Monticello?

Monticello, Illinois, is not a big town, as big towns go. Yet it is an enterprising county-seat of some 2,000 people situated on the Chicago-St. Louis main line of the Wabash just a few miles north of Decatur. And it has definite rights. Do not forget that. In the old days of ante-bellum private control—sin-filled and really wasteful competitive control—there were four through trains and two locals through Monticello in each direction each day. And the Monticello banker or merchant who wanted to run down to St. Louis and come back at night had an easy affair of it. But with the government train consolidation he could get up in the middle of the night and catch the 2:30 train south or else wait for the next express at 4:05 in the afternoon. The Government was not particularly worried about him.

Let me repeat. Monticello has definite rights to adequate railroad transportation. And this holds true whether that transportation comes from the Government or the individual. Monticello—ten thousand Monticellos, if you please—has a considerable voting population. And once the real war emergency was passed and the Armistice safely signed, ten thousand Monticellos began asking if government operation was going to offer them no better relief from the ills of private operation. It was as nothing to them that there had been a saving of trains and of train mileage between Chicago and St. Louis with no apparent diminution of the service between those two metropolitan cities; they simply knew that there had been a great lessening of their own service. And while they were willing to accept such a lessening as a part of their war sacrifice they did not intend to accept it as a permanent transportation condition, either from the Government or from private capital.

This general plan held, however. There are some pretty big and powerful Monticellos between Chicago and the coast. Denver is one of them, Omaha is another, Kansas City a third. And because, to make a single instance, any one of these cities demands a fairly quick and efficient service to Portland and the Puget Sound points, it was necessary after a time to modify to some extent the simplified route plan and to give these intermediate points through train service, or at least through Pullman service.

These changes and others like them have brought great savings in passenger mileage. That cannot be denied, even though one is tempted to add a doubting corollary as to the shattering of the finest passenger service that any land ever has received. The war crisis demanded curtailments. The railroads themselves had recognized that, even before the coming of the McAdoo administration. From May 1, 1917, up to the end of that year their War Board succeeded in reducing the passenger service by 28,656,983 train-miles. Yet this was not a circumstance to the slashing done by the Federal Administration. In September, 1918, McAdoo reported to President Wilson that he had succeeded in eliminating passenger-trains to the extent of 47,420,000 additional miles a year, a really astounding total.

But in all probability the most popular economy of this sort that McAdoo succeeded in bringing about was in the consolidation of passenger terminals across the land, all the way from the biggest towns down to the very smallest. He began at the top in the city of New York. The Pennsylvania railroad since the opening of its wonderful new station in Seventh Avenue in that city in November, 1910, quite naturally had held it exclusively for itself and for its subsidiary, the Long Island railroad. In that tight stand it was right from every competitive point of view. It had taken the great engineering problem and its financial risk entirely upon its own shoulders; shrewd railroaders had shaken their heads dubiously as they contemplated the daring move; and there was no reason why it should share the fruits of its enterprise with its competitors.

But the competitive situation had been eliminated. Therefore McAdoo did not hesitate in personally ordering that the highly competitive Baltimore and Ohio, as well as the non-competitive Lehigh Valley (which up to that time had been using the old Pennsylvania station in Jersey City), should bring its through trains into the Pennsylvania terminal on Manhattan Island. (Incidentally, at the eleventh hour of the existence of the Railroad War Board the Pennsylvania had proffered the use of its station for this purpose.) The tickets of the B. & O. and the Pennsylvania between New York and Washington and intermediate points were moreover made completely interchangeable.

The Pennsylvania people did not enjoy these orders, even though they had proffered the station at New York. But they were good soldiers. The country was at war, and they complied readily with war-time orders, no matter how unreasonable they may have seemed to them.

In a similar fashion the Southern Pacific people made wry faces over the order that admitted the Santa Fé into their ancient train-shed and “mole” at Oakland, opposite San Francisco. Their position was not so well taken however. Even in the competitive era the fast ferry-boats of the Santa Fé, coming from its rail terminal at Richmond, had entered the same terminal with the S. P. at San Francisco—the great union ferry-house at the foot of Market Street. And had not the Santa Fé, as the longer route, been compelled as a war measure to sacrifice its two pet trains between San Francisco and Los Angeles and San Diego, the precious Saint and the Angel?

These consolidations—there were many similar ones in the freight terminals as well—went on all the way across the land. Where there were two or more engine-houses in a place fairly close together, and it was humanly possible so to do, they were consolidated. Trackage at terminals was simplified; for instance at Chicago the trains of the Baltimore and Ohio and Pere Marquette systems, which formerly had entered their passenger stations by a rather circuitous route, were now sent in to them over the tracks of the Pennsylvania, and a saving of approximately seven miles and forty minutes of running time made.

Certain captious critics of Mr. McAdoo’s constructive policies have seen in these terminal and other physical consolidations of the several carriers a deep-laid plot to “scramble the railroad eggs,” which means so to weld the properties together that they could not be easily separated again. Despite the fact that the “unscrambling” has indeed been no particularly easy task, I do not see in McAdoo the deep-dyed villain that so many others perceive. I think that he consolidated these terminals and other operating devices in the interest of real war-time efficiency and economy, and for no other reason. That would seem at this time to be an impartial verdict upon his actions.

I am also setting these things down in some detail because they too are essential to a proper understanding of the final results of the nation’s first sweeping experiment in centralized and governmental railroad control. The most of these operating economies were the accomplishments of the Railroad Administration of the sort which some time ago I characterized as obvious. Now consider a few of them that were strange—marvelously strange, you may prefer to put it:

The Railroad Administration sought as one of the first of its economies the consolidation of the various city ticket-offices that competition long ago had set out in the larger cities of the land, as well as the complete abolition of the so-called “off the line” offices—agencies in cities more or less remote from the actual territory of any given railroad. So far, so good. So far was obvious and sensible economy. If an office here and an office there had been retained for the essential travel needs of the roads and their office forces and furniture had been brought together wherever it was necessary, the others being either abandoned or temporarily closed, there would have been no complaint. But the “winning of the war” took the strange effect in most of the large cities of the land that the Railroad Administration hired new office space—in Chicago it took virtually the entire ground-floor of a huge new sky-scraper on a ten-year lease at $65,000 a year—and installed elaborate and expensive new mahogany office equipment. In New York alone four of these great new offices were fitted out, and many of the smaller and cheaper offices, abandoned, stood idle for months, while the rent went merrily forward.

These things were inexcusable. So were many others. Apparently the ordinarily astute first director-general made a great mistake at the outset. He did not realize perhaps that he was attempting to do two things at once—trying to solve an acute war problem as well as a great economic one that had been gathering urgency for nearly a decade before the coming of the World War. That at least is a kind construction to place upon his policy. And if it was indeed his policy it was not so very different from that which was followed those days by many other large activities down at Washington. Apparently we have not yet learned that almost any war problem is separate and distinct from those of our great social economic questions that are forever showing themselves in one form or another. For instance a good many of us confused the problems of the capitalization and labor of the railroads with that of taking them over as an emergency war measure, just as we repeatedly mixed up all sorts of social and economic problems with the making of an emergency war revenue tax.

Such apparently is also a fair construction to place upon Mr. McAdoo’s remarkable activities in setting great forces of designers and draftsmen at work to create new “standardized” locomotives and cars for our temporarily nationalized railroad system. He made a widely circulated statement that he had found “2303 different styles of freight-cars and almost as many different descriptions of locomotives” and that these presently would be reduced by his experts to twelve standard types of freight-cars, and to six standard types of locomotives of two weights each. Unquestionably our railroad freight equipment has stood and still stands greatly in need of much standardization, although the roads themselves long ago established enough of this to permit common operation of their cars. But I doubt if such a standardization program had any real part in an emergency war plan. I never have been able to reason that out to my own satisfaction.

Nevertheless McAdoo was satisfied with his own idea and in 1918 alone ordered 1430 of his standard locomotives and about 100,000 of the freight-cars, at prices enormously above those of peace days. The engines and the cars eventually were delivered. That they were good engines and good cars I do not doubt. But they have never enjoyed any marked popularity with the railroad operating people. They are a conservative lot, these old hard-shell railroad executives who still hang on to a remarkable degree all the way across the land. You cannot lead them easily to new ways of thought.

All these fine frills, introduced in the midst of one of the most acute national crises ever visited upon this country, cost the Railroad Administration much time and much money—much useless time and much money that might have been used to better advantage in other directions. Digress for a moment with me and compare the great and bulky operations of the Railroad Administration with those of its prototype across the Atlantic, the war-created Railway Executive Committee of England.

The war wreaked no ravages elsewhere in England more striking than those that were wreaked upon her railways. She was quick to realize the supreme importance of her rail carriers to her in her crisis. And so she reached out within a fortnight after the outrage of Louvain and, with the authority that had been given her long years before by Parliament, took over the rail lines and began operating them for the national weal. There was no policy of vacillation on her part. It was a situation that she had anticipated and solved several years before the coming of the war.

Even before 1912 there was in existence an English body known as the War Council of the Engineer and Railway Staff Corps. This council consisted of the general managers (in England the post of general manager compares with that of the president of an American railroad) of the railways that in the event of war with a Continental power would have the most to do with military traffic. The council made elaborate and definite war plans. The possible invasion of the east coast was anticipated and detailed plans—even to the working out of actual train and engine schedules—were made for the evacuation if necessary of the population of east coast towns and cities and the movement of troops and heavy guns up to them. This council by 1912 had developed into the Railway Executive Committee, which was composed of the general managers of the twelve most important railway systems of Great Britain. It in turn formed an integral part of a Board of Communications, which included representatives of the War Office, the Admiralty, the Board of Trade, and the Home Office. Among these representatives was Sir Eric Geddes, then first lord of the Admiralty, a young Englishman of great promise and energy and to-day the British minister of transport.

The Railway Executive Committee went to its job quickly and without ostentation. While it sought to unify the operation of John Bull’s railways so that he might help win the war most efficiently and most promptly, it had no false or grandiloquent ideas of creating a single national rail system overnight. It did not seek to tear down in a day what had taken the patient labor of years to upbuild. It sought not to standardize either baggage-cars or locomotives or dining-car meals. It even escaped having a director-general. Its printed forms were few and modest. It had no press-agent, no propaganda. Few people outside of railway and army circles even knew of its existence. At the height of its endeavors it employed in its joint efforts a total force of not more than eighteen officers and clerks, who occupied two floors of a very small office-building directly across the way from the Houses of Parliament. It was an extremely simple enterprise. But it functioned and functioned extremely well.

Eighteen employees, as against more than twelve hundred at the very beginning of the United States Railroad Administration. Even to-day, two years after it has ceased to function, there are still several hundred retainers faithfully hanging on to their official jobs.

Mr. McAdoo might find some shrewd lawyer’s way of proving his “standardized” locomotives and freight-cars a necessity for the winning of the war, even though the elaborate consolidated ticket-offices would not be so easy to explain. But just why orders should have emanated from his offices to place his name as well as his title upon every piece of printed matter issued by the United States Railroad Administration—even to the dining-car menus and even to each third mile upon the scrip-books issued for passenger travel—is particularly difficult to understand. Particularly so, as a war measure in a war for democracy, at any rate. The hub of the troubles with Mr. McAdoo seems to have been that he regarded a war crisis as a fit moment for an experiment in the details of a centralized railroad operation for the United States.

The chief criticism launched against the first director-general of the Railroad Administration is in regard to his handling of railroad labor. The more conservative the mind that you scratch upon this extremely delicate topic the more violent the immediate reaction. “Barron’s Weekly,” published by the “Wall Street Journal,” regards Mr. McAdoo’s attitude toward railroad labor as that of an arch-tyrant. But that is merely typical Wall Street attitude and to be dismissed as such. I had, as I have already said, very little sympathy with the director-general’s addresses to the men at Pueblo and at El Paso, where he assured them that at last they had come into the rights which had been denied them and that hereafter they were to receive the square deal. That was unnecessary. More than unnecessary, it was unfair. And more than that, it was an extremely dangerous doctrine to be preaching, particularly at that time. I cannot see how it possibly could do one single thing toward upbuilding railroad morale, the thing needed at that moment more than anything else. It could scarcely do else than lower that shattered morale still further. And it is possible that Mr. McAdoo regrets at this moment that he ever gave utterance to those two speeches, patting railroad labor on the back when railroad labor should have been congratulating itself that it was not conscripted and sent into the trenches. This is said with all deference and with a high regard for railroad labor in the United States.

On the other hand McAdoo did a most commendable and forward-looking thing when he gave labor a fair place in his official cabinet. Then and there he played a trump card that private ownership and operation of our railroads forever and a day had failed to play. He played another when at the very beginning of his term of office he put the entire question of wages in the hands of a competent commission headed by the late Franklin K. Lane, of whose fairness and ability there could be no question whatsoever. Mr. Lane knew men; he also knew railroads. He was perhaps the one man in the United States who might have taken the Railroad Administration and made an unqualified success of it. The ablest member of the Wilson cabinet, he was compelled to take a back seat in the big war drama. His capabilities and his experience were virtually ignored.

The Lane Commission went more carefully into the question of railroad wages than any one had ever before gone. It did what no individual railroad or group of railroads ever had the intelligence or the courage or the fairness to do—attempted to make some sort of impartial analysis of living costs to the railroader, and to use these as a basis for the fixing of his wage. The question of compensation never has been placed upon a scientific basis.

The whole question was so big and so vital that even despite war-time pressure the Lane Commission took until May, 1918, to render its decision in favor of considerable increases to almost every type and rank of railroad worker. It unquestionably was a fair decision. Some that followed may not have been so fair; McAdoo unquestionably was led far afield himself by some of his advisers in elaborate and almost absurd attempts at standardized wage and working agreements. Yet at the time he took over the railroads for the Government the rank and file of railroaders unquestionably were underpaid—in certain cases grossly underpaid, and with their living costs rising by leaps and by bounds.

This entire question of railroad labor, its rights and its wage, is so involved and so complicated in detail that I am going to leave it for another portion of this book. It is enough to say here in review of the McAdoo administration that on December 15, 1917, thirteen days before he assumed control, the total number of employees upon the Class I roads of the land (87 per cent. of the railroad mileage of the country; all save the lines with gross revenues of less than a million dollars a year) was 1,703,685; on January 15, 1919, four days after he had relinquished control, it had grown to 1,843,530—an increase of 139,846, or 8.2 per cent. Yet the pay-roll expense, which had been 61.48 per cent. of all operating costs in 1917, had only risen to 65.62 per cent. It was not until the following year that an average increase of nearly 50 per cent. in railroad wages was granted, in the face of a still generally increasing cost of living.

But by the next year McAdoo was out of the job. The Armistice had been signed on November 11, 1918, and immediately thereafter Mr. Wilson gave heed to Mr. McAdoo’s protestations that, the war-time emergency having passed, he was no longer needed and that he must go out into the world to recoup his shattered personal fortune. Accordingly he ceased to be director-general of the United States Railroad Administration on January 11, 1919, and was immediately succeeded by his right-hand assistant, Walker D. Hines, whom we have seen already as the one-time chairman of the board of the immensely important Santa Fé railway system.

Hines is in many ways the very antithesis of McAdoo. There is nothing dramatic or spectacular about him whatever. On the contrary he is what he began to be, a typical corporation lawyer, cool-headed, judicial, shrewd, and honest. He probably would tell you himself that he broadened a good deal down in the offices of the Railroad Administration. I could see the changes. He became vastly more human; his Washington experience seemed to quicken his sympathies and to broaden his understanding of men.

His job was vastly different from that of McAdoo. The job, like the man, now lacked fireworks. There were no longer troops and their munitions to be moved double-quick to the seaboard; instead there was the rather leisurely return of the boys in khaki to their homes. Industrial production across the land was slackening, not quickly but appreciably. Oddly enough, however, railroad revenues still were increasing; they were not to reach their peak until near the end of 1920. Total operating revenues of the Class I roads, which were $4,014,142,743 in 1917, and which had increased to $4,880,953,480 in 1918, came to $5,144,795,154 in 1919. In 1920 they reached, under the stimulus of tariff increases ranging from 20 to 50 per cent., the enormous summit total of $6,171,493,301. In the first ten months of 1921, the most recent figures at hand, they were but $4,672,651,346, as compared with $5,082,819,687 for the same ten months of 1920.

It was under the Hines administration that most of the national working agreements were made, to which the private railroad operators were to take such extreme exception after the return of the properties to their control. But again I must ask you to defer comment or criticism until we have taken up the entire question of railroad labor as a sizable problem by itself. It is enough to say here that Hines encountered a very considerable opposition when he raised wages generously, and raised rates not at all.

The fact remains, nevertheless, that Mr. Hines had in his stewardship a very thankless job at the best; it is always hard to follow a prima donna upon the stage. And McAdoo was some prima donna! Yet in loyalty and in energy Hines gave place to no one. He took the thankless job and made the best of it. He undermined his health by his devotion to it and received no praise from any quarter. His best reward must come in his own knowledge that, all in all, he did a good job, with difficult timber—the best of the subordinates of the Railroad Administration already were leaving it for future peace-time jobs of permanency—and with no encouragement whatsoever. And when the United States Railroad Administration ceased its active career upon March 1, 1920, and handed the railroads back to their owners for operation, I fancy that none was more rejoiced than Walker D. Hines.

What then was the net result of our first—and possibly our last—national experiment in the government operation of our huge railroad plant?

Even to-day, fully twenty-four months removed from the experiment itself, that is a difficult question to answer quickly and fairly. It is even difficult to say that, regarded merely as an experiment, it was a fair test. Certainly no laboratory expert deliberately would choose the critical final hours of a great war as an ideal time for dispassionate experimentation. It was in such hours that McAdoo, who was the head and front of the entire experiment, worked. When his successor came to high office the entire country was in the “let-down” that swept across the land as the very natural sequence of great national tension and endeavor.

The distinguished writer upon railroad economies, William J. Cunningham, James J. Hill professor of transportation at Harvard and himself for a time a subordinate executive of the Railroad Administration, does not believe that the experiment was a success. In a recent issue of the “Quarterly Journal of Economics” he says: