THE FARMER AND THE
RAILROAD
Address by
JAMES R. HOWARD
President National Transportation Institute
before the
RAILWAY BUSINESS ASSOCIATION
Manufacturers of Railway Equipment,
Material and Supplies
HOTEL COMMODORE, NEW YORK
NOV. 8, 1923
REQUESTS FOR COPIES
of this pamphlet will be welcome
from all those desiring to place it in
the hands of their representatives or
friends. Copies furnished or sent
direct to lists upon application to
Frank W. Noxon, Secretary Railway
Business Association, Liberty Building,
Philadelphia.
IT is always a good thing for us
to get acquainted with our neigh¬
bors, because we are sure to like
them if we do. I am a cornbelt
farmer. You represent various indus¬
trial, transportation and financial in¬
terests. We ought to—and must—
get acquainted, because we are neigh¬
bors ; and the circumstances of a new
era—another epoch—of American life
compel us to live closer together than
formerly.
The foundation of America from
the very beginning was agriculture.
The product of the fields was the
commerce of the marts. When our
first census was taken we had 5,000,-
000 people, all along the Atlantic sea¬
board ; 90% were rural. Westward
from the crest of the Alleghanies lay
the world's richest agricultural lands
—a great public domain beckoning the
oncoming settler. With the passing
of a century all this great domain
within the rain-belt was in the hands
of the farmer. The nineteenth cen¬
tury march of the farmer from New
England hills, across the great Miss¬
issippi Valley, over the Rockies to the
Pacific, is the drama of the ages.
A CENTURY OF SETTLEMENT
During that century we had one
definite outstanding national policy,
though it may not have been expressed
by party plank or national statute.
This policy was to settle the land and
make it produce. Witness the early
wholesaling of land-settlement rights,
the Pre-emption Act, the homestead
laws. During the century the sale of
public lands was always a check to
any deficit in our national Treasury.
The greatest single decade of land
settlement was from 1860 to 1870,
when our tillable acres increased 51%.
The increase of the next decade was
26% and the next 16%—while the
increase during the first decade of the
present century was negligible.
I was born in Central Iowa in the
'seventies, where my people had pre¬
empted 20 years before. Well do I
remember the covered wagons coming
in from Illinois, Indiana or Ohio with
new settlers who would build a shanty
and a straw stable and become a part
of us. If they fitted into the environ¬
ment they stayed. If not, they again
put the bows and cover on the wagon
and followed the lure of the land to
Dakota, Nebraska, or Kansas, where
there was plenty of room to live with¬
out elbowing neighbors.
PIONEERING
I remember too how the merchant
came to the new town with his stock
of goods on one or two wagons. If
he succeeded he stayed; if not, then
onward to newer territory. So came
the banker with his safe, and the
blacksmith, forerunner of industry,
with anvil and forge, all restlessly,
hopefully pioneering. And so too
came the railroad, likewise pioneering,
following the lure of the land, always
paralleling and supplementing the
development of the farm. When the
first road reached Iowa City, 150 miles
from my grandfather's breaking, there
was rejoicing. The markets of the
world were at the door. When a few
years later a road came within 12
miles, the acme of all human needs
and desires was attained. Last year I
found in some old family papers rail¬
road stock which my father and uncle
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had bought in a line which was partly
built and never operated—$1200 of it,
paid in cash. It was an enormous sum
in those days but I never heard com¬
plaint from anyone concerning the
loss. It was only a venture in mutual
pioneering. I understand that your
President has been recently holding
out the hope that once again pioneer¬
ing Americans may buy railroad stock.
It is interesting to note how those
early roads were laid out, mostly run¬
ning southeast in Iowa and northwest
in Illinois, the objective being naviga¬
tion head of the Mississippi River,
upon which by boat the freight could
be taken to New Orleans and thence
to the markets of the world. What a
small conception those pioneers had of
the marvelous developments that were
to be!
Thus for a century the whole Miss¬
issippi Valley was a roadhouse where
farmer, merchant, manufacturer, car¬
rier paused for a bit, added to the
development of the land and passed
on.
PERMANENT BUILDING
The point which marks the advent
of a new epoch in American history
is the passing of the last of the pro¬
ductive public domain into the hands
of the farmer. Then pioneering
ceased and permanent building began.
The roadhouse became the house by
the side of the road. This is just as
true of all other industries as of
agriculture.
There is no exact date of the new
era, but 1900 is approximate. There
were some preceding evidences. The
rubbing of elbows resulted in 1887 in
the creation of the Interstate Com¬
merce Commission and in 1890 in the
Sherman Anti-Trust Law, to be sup¬
plemented in 1913 by the Federal
Trade Commission and Clayton Acts.
The Act committing the federal gov¬
ernment to a reclamation policy in
1903 was a very definite acknowledge¬
ment of a new order of things. None
of these acts was necessary in the days
of territorial expansion. They are
buffers between pioneering and per¬
manent building, made necessary be¬
cause men do not recognize the
demands for understanding, co-opera¬
tion and adaptation which came with
the changing order. It is to be hoped
that occasions like this may create
that good will born of understanding
which will not only make further
similar restraints unnecessary, but
render obsolete those we have.
MECHANICAL PROGRESS
In this audience are represented the
men who develop and fabricate me¬
chanical appliances for railways, the
men who buy and use them and the
bankers who finance them. Together
it is those three groups, with their
armies of employees, who perform
the railway transportation function.
Upon you the farmer has his eye. In
his own business the farmer has
grappled with the problem of reduced
factors in operating cost. He has
availed himself of new machinery.
He has increased the output per man
engaged. A smaller number of men
on farms have attained larger total
production. This process of cutting
production cost is always on his mind.
He thinks of it, not only in his own
work, but in the work of those whose
product or services he buys. He has
occasion sometimes to complain that
the commodities which he consumes
cost him more bushels of grain than
he can pay and show an annual profit.
Usually he has no remedy for the
price of commodities except the buy-
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ers' strike, which is not a real remedy,
since reduction in consumption gener¬
ally increases the production cost of
the commodities and in the long run
raises instead of lowering the price.
Just because commodity prices are
beyond his remedy, the farmer seizes
upon any factor in his own cost over
which there is a way to exercise con¬
trol, and, of course, the outstanding
target is railway rates, which are reg¬
ulated by the government.
The farmer closely watches oper¬
ating cost of our railways. He insists
that they shall be honestly, efficiently
and economically managed, as set
forth in the Transportation Act.
Thinking of his own experience with
the installation of mechanical improve¬
ments, he asks whether the railways
are taking advantage with reasonable
rapidity of opportunities for mechani¬
cal progress.
FARM AND RAIL ADVANCE
I suspect that neither farmers nor
any other men of affairs are fully
aware of the great part played by me¬
chanical progress in past and present.
Witness the transition from the old
walking plow of the '80s to the trac¬
tor drawn gang of today, or, the evolu¬
tion from the cradle and flail to a
combined machine that cuts, threshes
and bags wheat at a single operation.
It will hurt none of us to browse
around now and then in the museums
gaping at the photographs of locomo¬
tives and cars of an earlier day. The
comparison with the newest vehicles is
striking enough. The average train
load which you gentlemen regard as
the key to economical operation rose
from 1890, when it was 175 tons, to
1923, when during the first eight
months it was 716 tons, or, an increase
of more than 300 per cent. It would
be carrying coals to Newcastle for a
dirt farmer to catalogue before this
audience the scientific advance in every
direction which has been the basis of
that marvellous result—improvements
in the design and material of locomo¬
tives and cars, of track appliances and
signals, of shop equipment; and the
reconstruction of road and bridges,
straightening of line and reduction of
grade. The pouring of millions upon
millions of capital into improvements
such as these has enabled our rail¬
ways to meet a steadily rising wage
scale and mounting taxes, furnish the
most satisfactory service in the world,
and stave off until 1910 any movement
for general advances in their freight
rates. They have overcome before,
during and since the war tendencies
towards higher costs in other direc¬
tions, and have survived on a rate level
under which the business of the
country has moved in record volume.
RECENT RAILWAY EFFICIENCY
Some aspects of railway efficiency
during 1922 and 1923 are most
encouraging. Emerging broken and
demoralized from federal control in
1920, and weakened from the depres¬
sion of 1921, the roads on Jan. 1, 1922,
owned freight cars aggregating 2,328,-
276. In the next 21 months, ended
Oct. 1, 1923, they scrapped 239,333
cars and installed new 211,857, leaving
them Oct. 1, with 27,476 less freight
cars than at the beginning of 1922.
Locomotives owned Jan. 1, 1922, were
64,985, those scrapped in 21 months
were 4,641 and new ones installed
4,342, leaving those owned Oct. 1,
1923 at 64,686, or 299 fewer than at
the beginning of the period. Yet that
smaller number of locomotives and
cars has been hauling promptly and
well a vastly larger number of car-
loads than in any previous year, and
the present gross car surplus is twice
as great as the present gross car
shortage.
What did it? For one thing, the
cars and locomotives scrapped are the
oldest and smallest, while those
installed are the newest and largest,
so that the pounds of tractive power
and the tons of car capacity added
by new installation is larger than that
of the same number of units scrapped.
But another factor is more important.
The roads have been making greater
use of the rolling stock they possess.
With the aid of shippers they have
increased the car miles per day and
the tons per car. Above all, they have
made repairs. The most significant
item in this table is this—that on
Jan. 1, 1922, the freight cars in good
order were 2,015,086, and on Oct. 1,
1923, they were 2,149,468, or an in¬
crease of 134,382. Locomotives in good
order increased from 49,602, Jan. 1,
1922, to 54,863 on Oct. 1, last—an
increase of 5,261. So that with
27,476 fewer cars at the end of the 21
months there were 134,382 more in
good order, while with 299 fewer loco¬
motives there were 5,261 more in good
order.
BACK TO RAILROADING
This astonishing story means that
the railway managers and the railway
employees have gone back to the
proper function of railroading. Dare
I suggest that we have also had the
first material Congressional vacation
in a dozen years ?
I say gone back to railroading. What
I have in mind, of course, is that
during this year at least the manager
and the men have labored together in
harmony on their primary job. So
far as the farmers are concerned, you
may be sure that such a spectacle is
medicine for sore eyes. We do not
begrudge good wages or good salaries
on the railroads so long as they are
giving good transportation. Our
hearty support and practical co-opera¬
tion in maintaining that situation at
all times may be depended upon.
VIGOROUS PROGRESS EXPECTED
But the farmers also expect that
mechanical and managerial progress
will continue vigorously. We are
asked to pay higher freight rates than
those to which we have been accus¬
tomed. We are told that the increased
railway income is necessary in order
to attract capital for just such improve¬
ments. What the thoughtful farmer
has in mind is reduction in railway
operating costs. Therein he sees the
only hope for ultimate rate reduction
which he demands. He is thinking of
the improvements most obvious to him.
such as hydro-electric power; but he
is coming to know, and I promise you
he will increasingly know, something
about the more intensive progress in
every branch of transportation science.
To you gentlemen the confidence and
good will of the farmers is vital. You
hope they will be patient about rates.
You invite their co-operation for a
respite from railway legislation. To¬
wards both those problems the atti¬
tude of agriculture will be profoundly
affected if the farmers are convinced
that the strengthened credit arising
from the higher rates is to be used in
devoting capital to improvements in
economy.
SERVICE TO THE NATION
You men, each group in your own
field, have engineering problems of
consequence to all people living and
to come. Your occupation is very
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much more than business. It is ser¬
vice to the nation. Each generation
can measure its contribution to the
general welfare by its elevation of
the standards of living. The rise in
the standards of living is limited by
the development of the mechanism
for taking things from where they are
to where they are wanted. Transpor¬
tation, if you please, is the yard-stick
which measures the living standards
and material progress of every nation.
You manufacturers with your labora¬
tories and your inventors, you rail¬
way managers who test and judge and
adopt or adapt what is new and good,
you bankers who mobilize the capital
will deserve well of your country in
the degree that the carrying machine
or transportation facilities that you
hand on to those who come after you
is a better machine than the one which
was handed on to you. Working in
that spirit and letting the people
understand that this is your spirit you
can command all the public support
you require. Some people do not
understand transportation. Many do
not understand the Transportation
Act. Nothing will help them more to
grasp both than to hear constantly
about your concerted efforts to improve
the transportation plant.
PIONEERS IN UNDERSTANDING
I have called attention to the fact
that pioneering in land settlement, in¬
dustry and transport building had
merged into an era of permanency.
We are still pioneering, however, in
that most essential field of understand¬
ing and co-operation. Most men only
vaguely realize their interdependence
with other men, or the dependence of
every industry on every other. The
rubbing of elbows is usually annoying
among strangers; seldom where there
is recognition of mutual interests and
neighborly friendliness.
I have pointed out that transporta¬
tion, and I have in mind all forms,
while most essential to every human
advancement is not fully understood
or appreciated. Truth is, we, the peo¬
ple, have come to consider transpor¬
tation almost as much a matter of fact
as air or water and it is only the
elbowing of the new epoch that is
beginning to arouse us to our obliga¬
tions and responsibilities. We realize
but faintly that past achievements in
every line without transportation
would have been impossible and that
upon transportation all future progress
depends.
To promote understanding through
the ascertaining of essential facts of
transportation—to study the co-rela¬
tion of the different kinds of transport
and the relationship of transportation
to industry as a whole and the trans¬
lating of these facts from the usual
economic or technical verbage to the
understanding of the men on the field
or on the street is the purpose of the
National Transportation Institute.
COMPLETING THE INSTITUTE
ORGANIZATION
It is my good pleasure to announce
to you that the National Transporta¬
tion Institute is now well organized
and efficiently functioning. Recent
material additions have been made to
its directorate and those named are
accepting the call to service. Yester¬
day other additions were made which
will add strength to the movement.
By the time of the first annual meeting
in January, the quota of 52 directors
representing 11 major American
industries will have been completed.
The Treasurer just elected is Ralph
Van Vechten, of Chicago, Vice-presi-
dent of the Continental and Commer¬
cial National Bank. From among the
directorate an Executive Committee
has been formed consisting of such
men as James S. Alexander, New
York; O. E. Bradfute, Xenia, Ohio;
William G. Dows, Cedar Rapids,
Iowa; Robert P. Lamont, Chicago;
C. H. Markham, Chicago; Bird M.
Robinson, Washington; William Rit-
ter, Columbus, Ohio; William C.
Sproul, Chester, Pa.
RESEARCH COUNCIL
Under the chairmanship of Edgar
E. Clark, former Chairman of the
Interstate Commerce Commission,
the Research Council has been actively
at work for four months. The Coun¬
cil has in hand for immediate report
these main subjects:
1. Growth of railway rates, rail¬
way service rendered as measured in
revenue ton miles, passenger miles,
and tons carried; and the growth of
railway operating costs and return on
investment per unit of service ren¬
dered.
2. Effect of transportation costs
and changes in railway rates upon
prices.
3. Distribution of freight charges
among the various industries and the
relation which these charges bear to
the service rendered to each industry.
4. Effect of freight rates upon geo¬
graphical distribution of industry.
5. Relative efficiency of railways
owned and operated by government
as compared with those operated by
private persons who own them.
6. Relation of railroad stocks and
bonds outstanding to the investment
in the railroad properties of the
country.
7. Findings of the Interstate Com¬
merce Commission on valuation of
railroads.
The Research Council is working
in harmony with other organizations,
availing itself of basic material pre¬
pared by reliable agencies and serving
as a means to co-ordinate their efforts
while digesting and interpreting the
material for the widest public.
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