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Last run into the woods?
I THE disheartening news spread among the faithful with the speed of Morse last spring: Pickering had decided not to reopen the 58 route-miles of 3-foot-gauge logging railroad out of Tuolumne, Calif., whose eight geared steam locomotives operate under the name of West Side Lumber. To the fans it was really academic whether the depressed lumber market was to blame or West Side had finally worked itself out of trackside timber. What mattered was the fact that the shoulders of the Sierra Nevada would no longer echo back the rapid exhaust of three-truck Shays as they lifted their Swayne log cars up 5 to 72 per cent grades to remote railheads. However, let the camera here record that on June 6-7, 1961, three-truck Lima No. 14 did proceed into the woods to retrieve log cars, reefers, and an electric generating plant left there last winter. Thus at dawn, with stack barking and headlight ablaze, the 14-Spot made what could well be the final run before the dismantlers. True, West Side lay dormant during the depression in the 1930's, then was revived. Only time will reveal whether or not history sees fit to repeat itself. - D.P.M.
THE New Haven analysis was of particular interest to me - not so much for what it was as for
the questions it raised. To me, the real issue now is not "What went wrong?" but rather "What next?" During the development of the New Haven morass, I have been increasingly concerned over the insensitivity of almost everyone to its implications. Too many journalists (and your writer partially falls into this group) see the situation largely as a commuter crisis while regarding the rest of the railroad as a somewhat moth-eaten anachronism which no longer has much relevance to the territory it serves. And this view isn't confined to writers and reporters alone it is shared by politicians, the public (whatever that is), and even by the rest of the railroad industry.
But the New Haven is not a rapid-transit line alone, nor is it merely a multiple-track version of the Ontario & Western. It is an enterprise with assets of almost a half billion dollars and close to a rail monopoly in | one of the country's most densely populated areas. Theoretically it should be handling the production and consumption of over 8.5 million people, in addition to carrying the people themselves. It lacks neither potential business nor capacity, yet its present position appears almost hopeless. What is happening to this company now and what happens to it in the future may very well be portents for the rest of the industry.
To be sure, part of the New Haven's predicament can be laid to a peculiar mishmash of mismanagement, misfortunes, and miscalculations which might be unique among railroads. But are the basic problems unique? Commuters and managerial meanderings aside, the fact that almost one quarter of the New Haven's freight business has vaporized in only five years should make anyone stop and think. All that distinguishes the New Haven from its neighbors is a matter of a few percentage points; the trend is the same. Even the affluent Western railroads can hardly rejoice for maintaining a relatively static traffic level in a prospering and growing territory. And this applies to all the New Haven's problems: passengers, taxes, rising operating costs, low labor productivity, shifting distribution patterns, inability to generate capital, and practically every other railroad woe. The New Haven is different only in that it happened to be hit the first and worst so far.
If we do believe that the New Haven's financial fix
is an advance warning of what may soon follow on a Pennsylvania or B&O, or perhaps even a UP or Santa Fe, then we must look at how this particular situation is being handled for a clue to what may happen in a larger crisis. Judging by the present course of events, the interested observer can do only one thing: reach for the Miltowns. For several things have become clear so far:
(1) The question of any further financial reorganization is academic as long as the railroad cannot even meet its operating expenses. To be feasible, any private reorganization must depend upon future earning power and it would appear that the New Haven has none in its present form.
(2) Despite an admittedly desperate and hopeless situation, nobody seems ready to take those measures which would remedy the basic problems. The reaction of everyone-management, Government, New Haven security holders, labor, the "public" - has been to patch, pray, and apparently hope that elves will appear and fix things some night. Expediency and avoidance of any major decision seem to be the guiding principles. Yet it is hardly fair to single out any one group from this collective inertia. Certainly nobody wants to give up his own vested interests, particularly if sacrifices are not forthcoming from anyone else. In sum, "public interest" is nothing more than the individual self-interest of its multiple parts. Worse yet, there seems to be sentiment that the sacrifices aren't worth it that it may be "easier" simply to shift the whole tangle to some sort of subsidized setup and not change anything.
(3) Matching everyone else in apathy and inaction. is the railroad industry itself. The New Haven — because of its nonexistent finances and dubious future has been conspicuously missing from any merger plans. What railroad or group of railroads has offered financial aid, better revenue divisions, managerial talent, or anything else? George Alpert's hat-in-hand trips to Washington were met with embarrassed silence or overt grumblings by other members of the industry. While such an attitude is certainly defensible on the grounds that no company dares jeopardize its own finances by throwing assets into the New Haven swamp, at the same time the industry cannot charge other groups with self-interest while excusing itself. The impression created may be a significant one to a public which already partially feels that railroads
as a group are not competent to help themselves.
(4) The most interesting and significant question mark is the Federal Government. For the first time in recent railroad history the Government has a financial stake in the future of a major railroad-like it or not. It has, in fact, close to an ownership claim if it wishes to exercise it. What will this mean to the industry and to the Government? Now that Federal money is involved, will it mean any more enlightened governmental interest in railroad problems? How will the Government move to protect its loan guarantees? And if it does move, what precedent will this set if other railroads also pass the financial point of no return? So far, any answers to these questions might as well be got from a ouija board, for it is obvious that at this point nobody is philosophically ready to face the issue. It may be pertinent to point out here, however, that our present situation is developing disturbing similarities to that which forced the Canadian government to pick up a heap of prostrate, overbuilt and underfinanced companies and piece them together into the Canadian National system. Of course, in Canada the specific circumstances and the extent of government involvement were different, but the CN was the product of one basic problem: the railway lines could not attract private financing because they showed little or no practical promise of adequate earnings. The Canadian government was thus compelled to guarantee securities on a large scale, and when the inevitable collapse came there was no alternative but a 100 per cent public corporation which inherited almost all the financial problems and inefficiencies of the old corporations. Our own conditions and philosophy may differ from Canada's, but here too we are reaching the point where private sources will not provide necessary railway capital without some Government guarantee. Incidentally, it is significant to note that direct government ownership in Canada solved few problems; politics, vested interests, and general reluctance to change preserved most of the old inefficiencies almost to the present.
Now that I've raised the Monster Socialism, I'll retire from the discussion before the hardware starts flying. But I think one point bears repetition: the New Haven's predicament is not primarily the product of local or regional peculiarities. The road is a compact Pandora's box of railroad industry demons, but significantly, Hope seems to be missing. I