DeggestyWell, greyhounds. at least he has not responded with an irate communication blasting you for daring to dispute his word with your facts. Often, some people are so sure of their knowledge that they cannot accept any criticism of their words, whether spoken or written. Perhaps he thinks your corrections are beneath his notice? Or, he is so ashamed of having written without having checked the full history of his topic that he cannot respond?
He can hit me with his best shot and I can respond effectively over this one. I know this subject and realize it's very important to keep the history straight.
After a month or so of this thread, it occurred to me - as far as I know, the UK railways developed near-standard containers for interchange by the late 1920s (pre-grouping), which was expanded and eventually (under BR) developed into Freightliner services by the 1960s. Would that be a good analog (to a certain degree) to what container shipping development in the US could have been if the ICC had been more flexible and liberal to railroad container rate pricing in it's 1930s decisions?
[R]ailway container designs were standardised during the later 1920's. The new RCH approved standard containers were based on the existing designs of the time. This move was mainly lead by the LMS who began promoting containers in 1928 in order to counter the competition from road haulage companies for door-to-door services. I believe the earliest railway company door-to-door container services started in about 1926 but I cannot confirm the details. By the 1930's the container had proved its worth for furniture removals work and was also popular for the transport of higher value cargo. One of the big successes for the railway container was the shipment of meat and although the railways continued to build vans for the carriage of meat the containers dominated this trade from the mid 1930's onward. The LNER only used meat containers for this trade after 1935, and several of these might be included in a fast express goods train rake. British fresh meat was shipped mainly from Scotland hanging on hooks in ventilated containers. Imported frozen meat was carried from the docks in refrigerated and insulated containers. British railways built many thousands of containers, mainly to the standard pre-war 'van' type designs. Up to the 1960's it was usual to send containers through the system as single loads, hauled in standard mixed goods trains but under British Railways that all-container 'liner' services began to emerge in the late 1950's.
Well, greyhounds. at least he has not responded with an irate communication blasting you for daring to dispute his word with your facts.
Often, some people are so sure of their knowledge that they cannot accept any criticism of their words, whether spoken or written. Perhaps he thinks your corrections are beneath his notice? Or, he is so ashamed of having written without having checked the full history of his topic that he cannot respond?
Johnny
greyhoundsThe 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.
Actually, the author's name is H. Roger Grant. That was my mistake. I own it.
But it's been over a month since my detailed complaints of bogus history and distored facts in the article were forwarded to Grant by the editor of Classic Trains. I've heard nothing.
And I don't expect that I will.
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.
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
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.
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.
Shadow the Cats ownerHey 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.
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.
greyhoundsYou 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.
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
wanswheelgreyhounds 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.
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.
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.
greyhounds Horse feathers!
Horse feathers!
Well Ken at least you got the name right on the Container Car era movie.
OvermodIs 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.
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.
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.
https://babel.hathitrust.org/cgi/imgsrv/image?id=mdp.39015022419488;seq=24;width=1020
https://babel.hathitrust.org/cgi/imgsrv/image?id=mdp.39015022419488;seq=26;width=1020
https://babel.hathitrust.org/cgi/imgsrv/image?id=mdp.39015022419488;seq=54;width=1020
http://digital.hagley.org/nationsbiz_051930?solr_nav%5Bid%5D=0e8c3ff90f4565b95f6a&solr_nav%5Bpage%5D=0&solr_nav%5Boffset%5D=3#page/169/mode/1up
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.
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.
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%.
Paul_D_North_JrArticle 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.
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.
Never too old to have a happy childhood!
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.
Greyhounds, I hope that Classic Trains not only responds to you personally, but also publishes your response to the misinformation that has been published.
sandiegoI 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.
Again, special thanks to wanswheel for his excellent historical research and documentaton.
https://archive.org/stream/transactionsof43amer#page/1012/mode/2up
http://www.canadasouthern.com/caso/search/search.php?zoom_sort=0&zoom_query=CONTAINER+&zoom_per_page=20&zoom_and=0&zoom_cat%5B%5D=0
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!
Kurt Hayek
OK, here's the email I sent to the editor of Classic Trains. We'll see if he responds.
Mr. McGonigal;
This communication is to express my extreme disagreement with the article “Railroads, Motor Carriers, Superhighways” by H. Robert Grant.
First, let me state some of my credentials. I hold a Master of Science in Transportation degree from Northwestern University. I also have a MBA from Loyola-Chicago. I worked in intermodal marketing for the ICG Railroad and RoadRailer. I also worked in market research for Navistar, which was then the largest North American manufacturer of medium and heavy duty highway trucks. I’m now retired.
My thesis at Northwestern was “The Transportation of LCL/LTL Freight by Railroad”. I got the idea for the thesis topic while interning on a LCL/LTL freight dock at 1601 S. Western Ave. in Chicago for a freight forwarder, Merchant Shippers, in 1975. I watched a constant flow of smaller freight shipments arrive, move across the dock for sorting, and be loaded in to TOFC trailers and boxcars for rail transport. Despite what Professor Grant says, Larry Provo’s C&NW actively solicited and sought this business. (It’s easy to take a quote out of context.)
One day I watched a highway trailer loaded with small clocks manufactured by Westclox of Peru, IL arrive at the freight dock. I then watched the driver unload each clock by hand to sort them by destination. My thought was: “There’s got to be a better way to do this.” From that thought my thesis developed.
My thesis advisor at NU was Dr. Joseph Swanson. He’s still aliive and living in Wisconsin. While discussing my proposed thesis with Dr. Swanson he told me that I had to document why this freight was diverted from rail to truck. That led to a deep dive on my part in to the excellent Northwestern Transportation Library. This documented research on my part revealed an amazing story of government interference with railroad efforts to integrate with motor carrier service.
So, I know of what I write. After all, my documented thesis got me that MS.
H. Robert Grant apparently doesn’t understand the subject. Either that or he’s got such a left wing slant on things that he can’t accept the fact that government regulation screwed things up to a fare-thee-well for 50 years. I really believe history should be kept factually accurate, so I’m writing this communication. There’s whole lot wrong with Grant’s writing. But I’m going to focus on some specifics. I’ll be glad to discuss any and all issues with you, Grant, or anyone else.
Professor Grant falsely states that the government regulators, the ICC, “Encouraged” rail carriers to go into the trucking business, literally giving the railroads a “Green Light” to do so. Horse feathers! My response to that untrue claim is “facta, non verba”. The ICC may have said encouraging things about railroad integration with motor freight, but their actions, rulings, and decisions sure didn’t go that way.
As Professor Grant correctly states, the railroads (at least some of them) initially saw motor freight as simply being more efficient than traditional rail operations for certain services. They naturally sought to use it to its best advantage. One of those “Best Advantages” was with LCL for pickup and delivery. The railroads didn’t want out of the LCL business, but they sure were interested in making it more efficient. (LCL made an important contribution to rail revenues.) The initial holdup was waiting for a highway truck that could carry a decent load of freight (5 tons) to be developed. That happened in WWI for the US Army. So, in the early 1920’s, an important time that Grant largely ignores, the New York Central began offering intermodal container services focused on its LCL traffic. Think of it! In the 1920’s they were offering dedicated container services using friction bearing flatcars and steam locomotives! The New York Central cited the container efficiencies with reducing its cost of handling LCL by 75%. So powerful were the economics of containerization that other railroads, such as the Pennsylvania, adopted similar systems. Integrated rail/truck freight systems were growing and expanding beyond the New York Central’s pioneer operation. The rail customers were getting better service at lower rates. The railroads made more money at the lower charges because of the intermodal efficiencies.
Then the government regulators, the ICC, got involved. In 1931 those fools ordered the railroads to increase their rates on container traffic to non competitive levels. This killed the developing integrated intermodal system. (“In the Matter of Container Service” decided in 1931.)
Why would they do such a fool thing? Well, they were a bunch of government lawyers and bureaucrats who had little or no grasp of economics. What had been previously established was a railroad “Rate Structure” that dominated the commerce of the United States. This structure was based on “Ramsey Pricing”, a system which basically set the rail price based on the effect the transport charge would have relative to the value of the commodity. i.e., a transport charge of $2.00/hundred weight could well double the delivered cost for a low value commodity such as wheat while a similar charge would have minimal effect on something such as clocks. Since both the wheat and the clocks needed to be moved, the solution was to charge less to haul the wheat and more to haul the clocks. (No, they didn’t intentionally lose money hauling commodities such as wheat, but the railroads sure charged more to move high value commodities than they did low value commodities.) This rate structure was adopted, approved and enforced by the ICC. Changing it would disrupt established commercial patterns. But such change was inevitable with the advent of motor freight.
The development of motor freight was going to blow a gaping hole in this “Rate Structure”. If nothing else, the clock manufacturer could buy his/her own truck and pay only the cost of such a transport operation. This avoided the extra mark up on that high value commodity. (No, the ICC never did regulate manufacturers hauling their own product in their own trucks. They basically couldn’t do that.)
This process has a name in the study of economics; it’s called “Creative Destruction.” It’s basically when a new technology or process develops (i.e., trucks) that creates a new economic order while destroying the old order. (Think of what happened to typewriter manufacturers when word processing software was developed.) Creative destruction does cause pain. A lot of typewriter people were displaced. But it is absolutely necessary if the economy is to avoid stagnation and decline.
To compete with the new motor freight operations the railroads priced their container services as “Freight, All Kinds”. (FAK) This led to protests and the fools at the ICC sought to block the inevitable change. They did so by ordering the rail container rates increased to non competitive levels. H. Robert Grant falsely claims that the government gave a “Green Light” to rail/highway services. The government did nothing of the sort. It blocked intermodal service by ordering an increase in rates. To flat out ignore this significant development, as Grant does, is to greatly distort history. I don’t think you should publish such distortions.
There were numerous other restrictions on rail/truck integration imposed by the regulators. Grant just ignores them and blames the railroads for being late to the party. They were not late; they were blocked by government regulators. To say otherwise, as Grant does, is to distort history.
Other examples abound. For example, the restriction that railroad trucking services be “Auxiliary and Supplementary” to rail service. This was a killer. If the Seaboard received an interstate shipment from a coastwise ship company at Jacksonville, it couldn’t move the freight via truck to Ocala since the movement was not “Auxiliary and Supplementary” to rail service. But it had to move the freight because of its common carrier obligations. This would have necessitated two duplicate systems for freight movement and precluded the adoption of trucking by the railroad.
Another restriction involved government established “Key Points” which limited the range of rail trucking. If the Illinois Central had a shipment to move from Chicago to Rantoul, IL the railroad was restricted from moving it by truck. There was a “Key Point” at Kankakee and the railroad couldn’t use a truck beyond Kankakee for the move. This is far from the “Green Light” Grant falsely claims.
I could go on and on about this. But I think I’ve made my point. I’m particularly incensed about Grant’s false claim that economic regulation of trucking was needed to “Stabilize” rates. “Stabilize” is another word for fixing prices. And neither you nor he will find an economist who will support the trucking regulation of the time.
That’s enough for now. I’ll be glad to discuss any of this with anyone.
Ken Strawbridge
Antioch, IL
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