Freight Rail and the Trucking Industry in the 20th Century

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Posted by sandiego on Tuesday, April 03, 2018 11:35 AM

Greyhounds—good response!

I have never thought much of H. Roger Grant as a writer. He wrote a book about the Chicago Great Western, some articles for North Western Lines (the Chicago & North Western Historical Society magazine), and other articles for various publications. None were very good. He seems to lack any insight into what he writes about; just a superficial recitation of facts, figures, and anecdotes. I would not say he has "a left wing bias" but is more clueless than anything else.

For anyone interested in this topic there is a world of solid information in the previous messages posted here; far better than anything of Grant's.

One thing to remember is the magazine editors generally do not commision articles but depend on submitted articles, and are at the mercy of what comes in. Many people have knowledge but never write about it; if you have a story to tell, write it, and submit it!

 

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Posted by greyhounds on Tuesday, April 03, 2018 7:53 PM

Again, special thanks to wanswheel for his excellent historical research and documentaton.

"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.
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Posted by greyhounds on Tuesday, April 03, 2018 8:14 PM

sandiego
I have never thought much of H. Roger Grant as a writer. He wrote a book about the Chicago Great Western...... One thing to remember is the magazine editors generally do not commision articles but depend on submitted articles, and are at the mercy of what comes in. Many people have knowledge but never write about it; if you have a story to tell, write it, and submit it!

OK, I wrote and submitted a story about this long ago.  It was accepted and published in the March 1994 issue of Trains.  

I didn't recall Grant as the author of the CGW book.  I bought it and it remains one of the very few railroad books I declined to finish reading.

In the book Grant indicates he was attracted to the CGW because its leader welcomed and sought regulation while other railroads fought it.  Well, Duh!  Anytime a business seeks economic regulation there is something rotten going on.

The CGW was constructed late in the game and depended on inclusion in a government enforced cartel for its existence.  So, Hell Yes, they sought regulation.  (A cartel will use too many economic resources to produce a given economic output.  But the members do get paid at the peoples' expense.)

I formed the opinion that the construction of the CGW was a method of fleecing money from communities that were not on the railroad network.  At that time, being left of the network significantly limited any community's economic future.  So they were more than anxious to fork over funds to get the CGW built.  Of course, there were great profits to be made in the construction of the line.  And not so much in its operation.  

And Grant just doesn't appear to understand any of this.

 

"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.
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Posted by Deggesty on Wednesday, April 04, 2018 4:41 PM

Greyhounds, I hope that Classic Trains not only responds to you personally, but also publishes your response to the misinformation that has been published.

Johnny

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Posted by Paul_D_North_Jr on Wednesday, April 04, 2018 8:36 PM

Article on pages B1 and B2 of today's Wall Street Journal says the Over-The-Road common carrier companies can't find enough drivers, mainly due to the better wages elsewhere and long times away from home.  Instead, the people who might do that are going into construction and the energy sector.  About 50,000 will join the industry this year - but 150,000 to 200,000 are expected to leave it in the next 18 months - the existing pool of drivers is aging pretty quick, among the other reasons. 

What an opportunity for the railroads - esp. the intermodal side - if they could just get their acts together. 

- PDN.

"This Fascinating Railroad Business" (title of 1943 book by Robert Selph Henry of the AAR)
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Posted by BaltACD on Wednesday, April 04, 2018 9:00 PM

Paul_D_North_Jr
Article on pages B1 and B2 of today's Wall Street Journal says the Over-The-Road common carrier companies can't find enough drivers, mainly due to the better wages elsewhere and long times away from home.  Instead, the people who might do that are going into construction and the energy sector.  About 50,000 will join the industry this year - but 150,000 to 200,000 are expected to leave it in the next 18 months - the existing pool of drivers is aging pretty quick, among the other reasons. 

What an opportunity for the railroads - esp. the intermodal side - if they could just get their acts together. 

- PDN.

With the way the carriers are being operated in the 'EHH Era' that they are now in - it will be time to furlough a few thousand more operating employees and drive away a few hundred more customers.

         

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Posted by Shadow the Cats owner on Thursday, April 05, 2018 6:14 AM

Actually the Mega Fleets are the ones that have problems keeping drivers carriers like JB Hunt Swift England the ones that are screaming driver shortage.  Those of us in the industry that treat our drivers like human beings aka pay them well give them decent equipment to drive get them home on time don't play games with them on dispatching them.  Well right now I have a waiting list of applicants for when I need drivers.  Last year where I work we had a turnover rate of 15% and that was all due to retirements.  England had a turnover rate of over 150%.  

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Posted by tree68 on Thursday, April 05, 2018 7:38 AM

And then folks'll complain that this group or that group is taking all the driving jobs when, in fact, we're handing them to them on a silver plate.

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Posted by greyhounds on Sunday, April 08, 2018 2:20 AM

The editor of Classic Trains did respond.

He thanked me for my email and said that he had forwarded it to the article's author, H. Robert Grant.

We'll see where this goes.

"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.
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Posted by Overmod on Tuesday, April 10, 2018 9:20 AM

Is there a reason we keep seeing reference to an "H. Robert Grant"?

I was assuming this was the H. Roger Grant that edited the  R&LHS publication decades ago, and who was one of the 'authorities' consulted when Henry Rentschler donated the balance of the Baldwin records to Pennsylvania in the early Nineties.  

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Posted by charlie hebdo on Tuesday, April 10, 2018 10:20 AM

Overmod

Is there a reason we keep seeing reference to an "H. Robert Grant"?

I was assuming this was the H. Roger Grant that edited the  R&LHS publication decades ago, and who was one of the 'authorities' consulted when Henry Rentschler donated the balance of the Baldwin records to Pennsylvania in the early Nineties.  

 

http://newsstand.clemson.edu/writing-on-the-rails-professor-h-roger-grant-makes-time-enough-to-write-and-write/

Grant is a long-time professor, which is an automatic negative for some posters on here.  I never read his book on the CGW, other tham skim it a bit in a library.  Seemed like a pretty solid work, though a rather boring writing style in the tradition of "Dull, duller, Dulles" kudos to John Foster D., Princeton, class of 1908.

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Posted by greyhounds on Tuesday, April 10, 2018 1:07 PM

Overmod
Is there a reason we keep seeing reference to an "H. Robert Grant"? I was assuming this was the H. Roger Grant that edited the R&LHS publication decades ago, and who was one of the 'authorities' consulted when Henry Rentschler donated the balance of the Baldwin records to Pennsylvania in the early Nineties.

It looks to be my error with the name.

When I was preparing my letter I wrote the name down as "H. Robert Grant".

I own the mistake.

 

 

"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.
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Posted by wanswheel on Tuesday, April 10, 2018 1:42 PM

greyhounds

Horse feathers!  

Well Ken at least you got the name right on the Container Car era movie.

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Posted by Eddie Sand on Tuesday, April 10, 2018 6:58 PM

Grant's book on CGW has to be regarded as one of the biggest "duds" in my personal library; you can get a better picture of daily operations during the "Deramus era" from Kip Farrington's Railroads of the Hour (1958).

Essentially, once multiple-unit Diesel operation became possible, Great Western operations on its main lines consisted of one long daily freight in each direction, plus what passenger service could be sustained by a mail contract, plus local peddlers, and the latter two were on borrowed time. If any unit train operattions fund their way onto CGW rails, I'm not aware of it.

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Posted by V.Payne on Tuesday, April 10, 2018 8:07 PM

Certainly part of this discussion should be the push to find a way to finance highways outside of the direct revenue that could be collected from their users between exits. MacDonald led this Federal effort for some time, culminating with the publication of Toll Roads & Free Roads in 1938.

As one can imagine the report, now 80 years old, suggested that toll roads, even those limited ones that could exist, with relatively many, overlapping short O-D pairs that could charge a higher per-mile rate, where not in the national interest, free roads were, to be paid for by a general tax. This concept was developed for quite some time, to culminate in the 1956 Interstate act, with various statements that it would be self-liquidating, with a 1961 report that was to set the tax rates.

However, a fuel tax rate is never a proxy for paying for a highway, as the actual mileage of state highways is a distinct minority here in the US of all public roads (1/15 th). The fuel tax is on the use of locally financed roads, paid for by both cities and counties out of their general funds, or put in place by developers.

Hence there is always going to be a leveraging of investment toward highways on the back of taxes on the use of the locally financed road system.

Many groups ignore this effect when trying to fix the Highway Trust Fund. One can run a financial analysis of the revenues and costs of the Interstate system at the historical discount rates and find a needed investment of about $0.10 per automobile mile from the widely spread fuel tax and about three times that for commerical vehicles.

This leveraging is one of the most significant effects in the gradually overwhelmed railroad physical plant that struggles to support private investment to the degree that is needed and the competitive position to trucking.

 

 

 

 

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Posted by greyhounds on Tuesday, April 10, 2018 11:37 PM

wanswheel
greyhounds Horse feathers! Well Ken at least you got the name right on the Container Car era movie.

I just finished rereading the ICC decision in "In the Matter of Container Service".

You are on the right track.  The Marx Brothers could have done a better job understanding things than the government regulators did.

"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.
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Posted by tree68 on Wednesday, April 11, 2018 7:18 AM

greyhounds
You are on the right track.  The Marx Brothers could have done a better job understanding things than the government regulators did.

As they say, the squeaky wheel gets the grease.  One might wonder just how much the regulators got "leaned on" by who knows who (including politicians actually looking out for their constituencies).

I'm sure there were plenty of off-the-record conversations indicating that appointments might be at risk with the 'wrong' decision.

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Posted by Shadow the Cats owner on Wednesday, April 11, 2018 8:15 AM

Hey greyhounds the founder of the company here would tell you the same thing about the OTR side and how screwed up the ICC had it.  Companies were restricted at one time to 6 lanes of service that meant only 6 different cities and customers in those cities they could service peroid.  The shear stupidity of some of their decisions was baffling to even him.  One he never figured out that directly impacted him was he could haul Liquid Mag Sufalte from a customer we have still to this day.  However the powder from the same customer had to be carried by a different carrier even if going to the same place.  Why he wasn't authorized by the ICC at the time to haul powdered Mg Sufalte in bags or in bulk.  Yet he could haul all the liquid of it he wanted.  

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Posted by greyhounds on Wednesday, April 11, 2018 3:37 PM

Shadow the Cats owner
Hey greyhounds the founder of the company here would tell you the same thing about the OTR side and how screwed up the ICC had it. Companies were restricted at one time to 6 lanes of service that meant only 6 different cities and customers in those cities they could service peroid. The shear stupidity of some of their decisions was baffling to even him.

Oh, for sure.

The regulators didn't suddenly become competent when they expanded in to trucking.  

A big difference was that rail was 100% regulated while only about 30%-35% of trucking was regulated.  A major exemption for trucking was that agricultural commodities were not economically regulated.  Neither were private fleets.  And truckers were allowed to contract with customers while railroads were prohibited from doing that.

All in all, economic regulation of transportation was a fool's errand that harmed the US economy and the US people.  H. Roger Grant supports trucking regulation in his article and I did complain about that.

I've often challenged anyone to name two positive results from economic regulation of transportation.  So far no one has done so.

 

"By many measures, the U.S. freight rail system is the safest, most efficient and cost effective in the world." - Federal Railroad Administration, October, 2009. I'm just your average, everyday, uncivilized howling "anti-government" critic of mass government expenditures for "High Speed Rail" in the US. And I'm gosh darn proud of that.
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Posted by Eddie Sand on Wednesday, April 11, 2018 5:09 PM

The history of economic (rate/price) regulation is long and complicated; it can be traced to the "Commerce Clause" (Article I, Section 3) of the U S Constitution, via which the individual states were prohibited from imposing tariffs on each other's goods -- essentially, a free trade agreement well in advance of the huge success of the European Economic Community (Common Market). Unfortunately, the same wording was also used to justify Federal control of what ought to have remained a private matter.

In Munn vs. Illinois (1876), in response to pressure from the Granger movement,  the Supreme Court granted the states the authority to set storage charges for grain elevators and, by extension, rail freight rates. Then in the Wabash case of 1886, this authority was restricted to commerce within one state. That set the stage for the (Federal) Act to Regulate Commerce (1887) which created the Interstate Commerce Commission.

Self-propelled highway vehicles weren't envisioned at that time, and river, canal and coastal carriers were minor players, so the railroads were the only form of transport that drew any serious attention; it was recognized that setting rates artificially low amounted to violation of the principle of due process, so little by little, developing a fair valuation of railroad property upon which rate structure could be based evolved -- leaving us aficionados of iron-horse manure with all those "valuation" photos from the early Twenties.

But no sooner was the ink dry on the Transportation Act of 1920 than the trucking industry developed and skimmed away the high-value and high-rated traffic that was expected to provide the revenue to cover most of the overhead. By 1930, all-weather highways had developed to a point where truck hauls of several hundred miles were feasible for perishables, and/or sophisticated high-value merchandise. That set the stage for the Motor Carrier Act of 1934.

The early reglators probably modeled the tarriffs and other regulatory stucture after the rail regulations because they weren't familiar with anything else, and so long as it dealt with small carriers in small communities, little harm was done, But as better highways allowed for longer hauls, the erosion of the rail rate structure became more pronounced. Much of the courts' attention to the practice of "unbrealla rate-making" (deliberately holding rail rates high enough to protect emerging motor carriers) centered around intermdiate-distance markets -- Southern California to Arizona being among the most prominent. 

The earliest regulatory structures regarded all truckers as "regular-route and general-commodiy" carriers -- offering to serve all shippers located along a specific route -- usually iwithin the numbered Federal and state highway networks, or with in a specified radius to a pont (community) - usually designated by its main Post Office. But it wasn't long before local truckers sought, and were granted, authority to handle only specific commodities, and with the routes not specified. (For a glimpse of what this implied, the back pages of the trade journal Traffic World, prior to deregulation, will suffice.) 

The railroads first countered this move with FAK (freight-all kinds) rates for forwarders and brokers) and later with commodity rates -- geared to very large volumes of traffic suited to unit trains and dedicated moves. But complete deregulation was achieved oly via the Staggers Act of the mid-1980's.

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Posted by wanswheel on Thursday, April 12, 2018 2:58 PM

If there's any interest in the Commissioners who decided "In the Matter of Container Service," here's a picture and newspaper article from 1931.

https://outlet.historicimages.com/products/adh277

 

Washington, June18, 1931 – Handling cases involving billions of dollars, the Interstate Commerce Commission has gone through its forty-four years of existence without ever a hint of scandal touching one of its members. Individual commissioners have been accused of bad judgment or prejudice. Wall Street bankers have protested restrictions on railroad securities. Farmers have complained that the railroads were granted rates too high. Railroads, naturally, have sometimes been dissatisfied. But no member has ever been charged with corruption or ulterior motives. Aside from integrity, most of the commissioners are high-grade men of experience and ability. They have to be in order to deal with the vastly complex and variegated cases which come before them. Both in mental capacity and erudition in their field, the 11 members are comparable to those of the supreme court. Little of the criticism, consequently, that has been hurled at such other regulatory bodies as the power and tariff commissions has fallen the way of the I.C.C. Its decisions have generally been regarded as impartial… Lawyers have predominated on the commission in the past and a half a dozen lawyers are members now. A couple of them have been judges. Four have served on state regulatory commissions. Another worked his way up through the ranks of railroad labor and the commission staff. The average commissioner’s age is about 56. The chairmanship rotates from year to year and is now held by Ezra Brainerd. Jr., who came out of Vermont and was admitted to the bars of Michigan, Vermont and the Indian Territory now called Oklahoma in the same year. He was an active lawyer and banker in Muskogee, Okla, at the time President Coolidge appointed him to the I.C.C. in 1927. Commissioner Charles D. Mahaffie youngest of the lot at 47, was a Rhodes scholar and finished post-graduate work at Oxford in 1908. He taught jurisprudence at Princeton, practiced law in Portland, Ore., where he also served on the state conservation commission and was an attorney here for the Interior Department and the Railroad Administration. He had been several years director of finance for the I.C.C when appointed a member of the commission. Most often quoted by liberals and distinguished for the force and clarity of frequent dissenting opinions, much as are Justices Brandeis and Holmes, is Commissioner Joseph B. Eastman, the son of a Presbyterian minister and a graduate of Amherst now only 49 years old, although Wilson first appointed him to the I C.C. in 1918. Eastman was the moving force in the public franchise league of Boston for many years, then counsel for street railway employes and finally a member of the Massachusetts Public Service Commission at the time of his appointment to the commission. Frank McManamy  often votes with Eastman but is sometimes found sharply opposed to him. McManamy served the I.C.C. as inspector of safety appliances and chief inspector of locomotives from 1908 to 1913 and was assistant director of operations for the Railroad Administration when named to the I.C.C. in 1923. Hugh M. Tate used to win medals at the University of Tennessee, leading his classes in lots of things.  He practiced law in Tennessee and was made a Judge in Knoxville. He was practicing law when appointed to the I.C.C. by Hoover last year. Clyde B. Aitchison practiced law in Iowa and Oregon and was elected one of the original members of the Oregon Railroad Commission in 1908. Resigning in 1911 to become counsel for the National Association of Railway Commissioners. Wilson appointed him to the I.C.C. in 1917. Ernest I. Lewis sprang from Danville. Ind., was educated in a country district school and was successively a printer, reporter and critical writer for newspapers and magazines. He specialized on transportation and public utility problems, studying them in Europe, Asia, Africa and Australia. He wrote public utility laws and was chairman of the Indiana Public Service Commission when named to the I.C.C. in 1921. Balthasar H. Meyer was a school teacher faculty member at University of Wisconsin and chairman of the Wisconsin Railroad Commission. He has been on the commission since Taft appointed him in 1910. William E. Lee, appointed last year, was a justice of the Idaho Supreme Court from 1924 to 1929. Patrick J. Farrell had been for ten years chief counsel of the I.C.C. when appointed to a commissionership in 1928. He is 70 years old and his long career found him successively a farm boy, railroad telegrapher, railroad clerk, train dispatcher, station agent, conductor, law student lawyer, chief railway postal clerk, bank treasurer, confidential clerk to the I.C.C., assistant attorney to the I.C.C., its attorney, its solicitor, its first chief examiner, chairman of the board of reference and solicitor of its important bureau of valuation. Claude R. Porter practiced law in Iowa and served in the Iowa legislature. Many times, he ran unsuccessfully as a Democratic candidate for governor or senator. He was chief counsel and then special counsel for the Federal Trade Commission, returning in 1924 to re-enter law and Democratic politics in Iowa. Coolidge named him to the I.C.C. in 1928.

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Posted by wanswheel on Friday, April 13, 2018 2:13 PM

wanswheel

Frank McManamy  often votes with Eastman but is sometimes found sharply opposed to him. McManamy served the I.C.C. as inspector of safety appliances and chief inspector of locomotives from 1908 to 1913 and was assistant director of operations for the Railroad Administration when named to the I.C.C. in 1923.

McManamy and every ICC commissioner from Day 1 through World War II got biographically sketched in the book at link.

 https://babel.hathitrust.org/cgi/pt?id=mdp.39015035051781;view=1up;seq=191;size=125

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