From Nova Scotia to British Columbia the inimitable locomotives of Canadian National and Canadian Pacific roam main line and branch in summer foliage and in deep snow . . . in the exhilarating photography of a brand-new book whose single aim is to refresh the memory of Royal Hudsons and 6100-series 4-8-4's and many other

Dominion breeds from 2-6-0's to 2-10-4's. Words are minimized and action illustration is maximized in this rich pictorial of steam above the border in its finest and final hour! Another Kalmbach great one.

SENSATIONAL journalism is not our bent, so we were obliged to take issue recently with a reader, newly employed by Santa Fe, who felt that we've been painting an unnecessarily black picture of the industry in these columns. Quite naturally impressed by the Atchison's plant and vigor, he felt that it would be proper for us to accent the positive and eliminate the negative. It struck us that a few questions and answers might clarify the railroad scene as we enter 1962. For instance:

Is railroading in trouble or actually on the brink of bankruptcy?

Somewhere in between. Last year the railroads' rate of return on net investment (which has been sliding without respite since 1955) was 1.97 per cent not only their poorest performance since 1938 but only a hair better than the 1931-1935 depression years' average of 1.94 per cent. No other major industry earns so little on its property.

But doesn't regional performance vary widely?

Yes. But the individual trends remain the same. Also, though there are more than 100 class 1 railroads with revenues of 4 million dollars a year or more, all are interdependent members through freight-car interchange of an industry doing a 48-state-wide business. It is surely unrealistic to assume that Government would nationalize on a piecemeal basis should the roads in the East collapse, say, even though those in the West retained their solvency. Publicly owned CN and privately owned CP do coexist in Canada but scarcely to the advantage of either. Anyway, the regional rates of return on investment are these:

Is management largely responsible for the relatively poor showing of the East?

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As a rule, no. Indeed, Eastern railroads consistently earned more than the industry average until World War II. The Eastern decline of our time is attributed to many things. Eastern roads carry more passengers and, because of the proximity of population centers, maintain freight yards; both circumstances boost payroll costs which, in the East, account for 52.4 cents out of each revenue dollar vs. 49.9 cents for the U. S. as a whole. Taxes are higher in the East, so high in New Jersey, for example, that not a

single road can make money on its intrastate operations there. Again, the East is heavily dependent upon the steel mills which in turn (1) have suffered from foreign competition in recent years, and (2) possess greater access to river, lake, and highway carriers than mills elsewhere. Finally, the East as a region has not experienced the postwar economic growth of other areas such as the Far West, South, and Gulf Coast.

But didn't a third of U. S. mileage enter bankruptcy during the depression and recover?

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Yes but then the entire nation, not just the railroads, was in economic trouble. Investors bought the securities of reorganized lines on the assumption that their future earnings would parallel national recovery. Today it's different. No internal financial revamp of New Haven, for example, can possibly alter the external circumstances which forced it into bankruptcy last year.

What price mergers?

They could effect very real savings by elimination of either duplicating or unnecessary plant (e.g., 10 per cent of rail route-miles in the U. S. carry half our ton-miles). Annual pre-tax savings of the five big mergers which the I.C.C. is hearing or soon will (i.e., NYC +PRR, the Hill Lines, C&O+ B&O, Coast LineSeaboard, and N&W-NKP-Wabash) would total at least 225 million dollars. Total railroad net income for all roads last year was only 390 million. Yet it is doubtful if any large merger will receive an I.C.C. permit before the last half of this yearif then. The Commission itself seems favorably inclined but the Justice Department, Brotherhoods, and many Congressmen seem dead set against almost any consolidation proposal, and the railroads have not helped themselves by defaulting on a common-sense over-all merger blueprint in favor of voluntary marriages that often as not tread on too many toes. Mergers, then, are fine in principle but hard to practice. Also, unless the basic ills of railroading are resolved, merger savings will eventually evaporate into the same inflationary spiral that exhausted diesel savings. Who can save the industry?

UNSCHEDULED STOP

My favorite story about the great train Art Dubin chronicles on pages 16-33 concerns my grandfather, Dr. G. Campbell Morgan, who traveled the length and breadth of the continent in the 1920's in conference work as a Bible expositor. His home at that time was Winona Lake, Ind., site of the great church encampment grounds, and once he had occasion to discuss New York travel plans with the evangelist Billy Sunday. "Come along with me," said Billy. "I'm catching the Broadway." Impossible! PRR's finest didn't pause between Englewood and Ft. Wayne for anyone. Except for Billy Sunday, as it developed, for on the appointed afternoon No. 28 smoked to a stop not in the timetable - then or now.

Kalmbach Publishing Co. 1962. Title reg. Pat. Off. Published monthly by Kalmbach Publishing Co., 1027 N. 7th St., Milwaukee 3, Wis., U.S.A. BRoadway 2-2060. Western Union and cable address: KALPUB Milwaukee. A. C. Kalmbach, President. Joseph C. O'Hearn, General Sales Manager. Ward Zimmer, Advertising Manager. TRAINS assumes no responsibility for the safe return of unsolicited editorial material. Acceptable photographs are held in files and are paid for upon publication. Second-class postage paid at Milwaukee, Wis. Printed in U.S.A. YEARLY SUBSCRIPTION, $6; 2 YEARS, $11: 3 YEARS, $15. For life. $60. Outside the Americas, 50 cents a year additional (for life, $5 additional).

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