The Great Railroad Revolution (50 page)

The most famous marketing campaign featured Phoebe Snow, a virginal lady who was devised for the Delaware, Lackawanna & Western Railroad, by Earnest Elmo Calkins, one of the great advertising men of the twentieth century, who later went on to create his own agency, Calkins & Holden. The Lackawanna had a unique selling point that might seem obscure now, but was actually quite important in the days of steam engines. Its locomotives burned anthracite from its own mines, a far-cleaner fuel than the bituminous coal used by other companies, which regularly ruined the clothes of their passengers. So, in 1900, Calkins dreamed up Miss Snow, who was prone to speak in nursery-rhyme ditties, to publicize the cleanliness of the Lackawanna's trains:

Says Phoebe Snow

about to go

upon a trip to Buffalo

“My gown stays white

from morn till night

Upon the Road of Anthracite”

This proved so popular that the coy Miss Snow, who always seemed to be going to Buffalo, presumably because it rhymed with her name, was made the central figure in the company's advertising right up to the
First World War. Nothing was too minor or insignificant for Miss Snow's enthusiasm:

No trip is far where comforts are.

An observation Lounging Car

Adds new delight to Phoebe's flight

Along the Road of Anthracite

In other rhymes, Phoebe praised the cooking and the electric lights, but cleanliness was her recurring theme: “No other lips have touched the cup that Phoebe sips.” If the whiter-than-white Phoebe was not telling fibs about the Lackawanna's crockery, the railroad was either throwing away china cups after each use or using disposable drinking vessels. She became the best-known advertising mascot of the early years of the twentieth century, a Ronald McDonald of her day, and even made a graceful exit: at the outbreak of war, the government forced the railroad to use coal rather than the anthracite that was needed for the war effort, prompting Phoebe, in her final jingle, to say: “Good bye, old Road of Anthracite!”
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It was not only on the Lackawanna that passenger travel on trains improved around the turn of the century. Electric lights, first used in 1887, became standard, as did steam heating, initially introduced a couple of years later on the Pennsylvania Limited. Special magazines were published by the bigger companies, rather like airlines today, containing both PR material about the railroad and articles of general interest to readers. George Daniels of the New York Central was again a pioneer, producing a magazine called
Four-Track News
(a reference to the fact that the railroad boasted both slow and fast lines on much of its route) along with various guidebooks to places that could be reached by the railroad.

Tourism was seen as the key to profitability by many companies. As we have seen, whole resorts were created by railroad interests, but now the companies started promoting the virtues of sites of interest and attractions in their area. The Northern Pacific, which had lobbied for the creation of Yellowstone Park with its famous Old Faithful geyser in the 1870s, began to exploit the connection, producing elegant advertisements and devising promotional deals to attract its passengers. Many other railroads realized the
potential of the tourist dollar: “The Great Northern promoted Glacier National Park; the Santa Fe, the Grand Canyon; the Lackawanna and the New York Central, Niagara Falls.” When war broke out, even the government got in on the act, by publishing detailed guides to railroad travel to the West in order to encourage people to remain in the United States rather than risk the perils of traveling to conflict-torn Europe. Native Americans, who had so recently been displaced by the railroads, were now promoted as anthropological curiosities, dressed up in their feathers and war paint for the benefit of the visitors, who were encouraged to buy Native wares. Some of the blankets and cloth sold by the Indians had, rather incongruously, images of trains and even railroad company logos woven into their fabric. One government publication, listing sights on the Santa Fe Railroad, advised tourists that “Hopi villages are the objective of many tourists, especially on the occasion of the far-famed [
sic
] snake dance, which occurs in August.”
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The railroads were also investing in better accommodation for passengers. The wooden-framed car, so dangerous in the still all too frequent train crashes because of its fragility and combustibility, was at last beginning to be phased out. By 1907, all-steel cars began to be introduced, and no more wooden-framed ones were produced after 1913, though some stayed in service until the 1950s. The introduction of steel cars was a neat illustration of the way the railroad companies could never stand still, always having to fund improvements or renewals. Steel was much heavier than wood, and therefore the new cars had to be introduced in tandem with more powerful locomotives, an added burden on the railroads' finances. Indeed, the bigger locomotives were just part of a wide range of improvements necessitated by the desire to speed up services. To improve timings, other technical changes, including more sophisticated signaling systems and better wheels, were introduced alongside more mundane measures, such as reducing the number of stops. Since trains had to slow down when crossing built-up areas, because of the large number of perilous road crossings, more protection was given to railroad tracks in towns, with fences being put up at particularly dangerous places, although by and large the railroad remained unfenced even in towns and cities. This actually remains a problem on many parts of the network today and explains why trains are so noisy compared with their European counterparts—at every road, however small, crossing the tracks, the engineer is required by law to sound the horn.
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The lower end of the business market was the conference delegate. As we have seen, the railroads created the potential for organizations to hold national conventions, and now, in the first decade of the twentieth century, much of America seemed to be attending conferences with the help of special rates. The railroads had to provide them, but running extra trains for such events proved on occasion more trouble than it was worth for the companies, as they disrupted existing traffic, both passenger and freight.

Another source of business was special excursions, usually on a Sunday, but these also were not always profitable for the railroads, as Martin explains: “The traffic man [who was in charge of the operation of trains on the railroad] complained that the railroad usually had to supply the attraction, and often ended up with no profit after deducting the cost of free transportation of brass bands, baseball teams, and watermelons.”
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Presumably the fruit was for refreshing the hot passengers in the days before air- conditioning! Even the Pullmans could be a burden. With the increase in traffic that Pullman enjoyed, the company churned out huge numbers of the luxury cars, trebling the number in service between the turn of the century and America's joining the war in 1917. However, the railroad company received only its usual fare for the journey from the Pullman passengers but in return had to haul the heavy Pullman coaches, which normally carried at most twenty-seven passengers each. And all the risk and costs of hauling empty spaces was with the railroads. That was fine on busy routes, but on poorly traveled lines, the railroad company could end up in the red.

These difficulties encapsulated the railroad companies' financial dilemma and exposed the fundamental reason that, across the world, they have struggled to make a profit even in the good times. Although the railroads enjoyed a virtual monopoly on many types of journey, making money out of their position was not as easy as their opponents—who were numerous and vociferous—felt. Moreover, the railroad companies were hampered by the actions of the Interstate Commerce Commission and constrained by the continuing hostility toward them. Although the establishment of the commission in 1887 had marked a turning point in railroad history, it took time for the regulator to have an effect. Until 1906, for the most part, the ICC was powerless, unable to impose its rules on the industry and given the runaround by clever railroad-company lawyers who found loopholes in the legislation and exploited them. The ICC had come into being as a result
of the growing antipathy toward the railroads and concerns about their monopolistic power. The commission was charged with setting rates and fares that were “reasonable and just,” but what did these words mean? In trying to find out, the pompous commission members, mostly lawyers, held lengthy hearings, with decisions taking an average four years to emerge. Naturally, both shippers and the railroad companies were dissatisfied with such delays, but gradually, as the nineteenth century gave way to the twentieth, a policy emerged that favored the former at the expense of the latter. Tighter regulation was introduced by President Theodore Roosevelt's administration in 1906, preventing the railroad companies from granting favorable rates or, as we have seen, even issuing free passes. Moreover, despite inflation returning—prices had been stable or falling for much of the last quarter of the nineteenth century—the commission almost invariably turned down requests for rate increases by the railroad companies. They saw their role as protecting the public's interest, and that was to keep rates low, even though the railroads had a strong case for being allowed to make extra profits in order to invest. Borrowing money, too, was made difficult by the commission's policy, since investors were deterred from putting money in an industry whose profits were limited by regulation and that faced ever-increasing costs. In 1910 Roosevelt's successor, William Howard Taft, passed further legislation that made it even more difficult for railroads to prove the need for increases and gave the commission additional powers over the way it assessed the railroad companies' finances.

These continued moves against the railroads were rooted in the spirit of the Granger movement and the muckrakers who exposed the corruption of the industry when the railroads were like high-spirited teenagers, misbehaving and transgressing the law. The industry, however, unnoticed by the public and the legislators, had grown up, and the tightening of regulation, together with the routine refusal to allow the railroad companies extra revenue through rate increases, constrained their ability to respond to the new demands of the twentieth century. The railroads had few spokesmen prepared to defend them, but one of the exceptions, James J. Hill, who had built the Great Northern, reckoned the industry needed $5 billion to modernize, a quite staggering sum at the time. They were not asking for public money, of course, but merely seeking to be allowed to make sufficient profits
through the regulatory system to pay for these improvements. There was never any chance of their getting it. The zeitgeist of the early twentieth century was captured by the Progressives, who were hostile to the giant corporations, which they saw as corrupt and responsible for social evils such as child labor and workplace accidents. The Progressives held ambivalent attitudes toward government, being confident, on the one hand, about the ability of the state to improve social well-being—hence supporting measures to better regulate the railroads—but, on the other, remaining deeply suspicious of big-city politics that at the time were riven with corruption. A Populist movement motivated by a desire to eliminate both waste and corruption, Progressivism was a response to the rapid industrialization of the late nineteenth century. The railroads, as one of the most visible manifestations of that process, were an obvious target for the Progressives, who were suspicious of the power of the railroads and their ability to make profits out of their monopoly position as the core of the nation's infrastructure.

These prewar years should have been the heyday of the railroads. The companies wanted to invest, to improve their product offering—as it might be expressed in modern business parlance—but instead they had to struggle just to keep up. They were squeezed between rising costs and fixed rates, and the growth in traffic was not enough to provide them with the income for vital investment. Railroads, as we have seen, are a capital-intensive business and cannot stand still in the face of changing demands. The economy was, apart from the occasional blip such as the panic of 1903 and the short recession of 1907–1908, growing at an unprecedented rate, but the railroads were constrained in their response by the rules that their own past misbehavior had brought about. By denying the railroads the profits they could have earned through higher rates, the government dealt them a fatal blow. At the time when they most needed to modernize and prepare themselves for the coming onslaught from motor vehicles, they were stymied. Martin is unequivocal about the damage this “repressive policy of rate regulation” caused, arguing that it was not only the immediate loss of the huge amount of investment but the very ability of the railroads to respond in an entrepreneurial way: “The great tragedy of this failure of human beings intelligently to order their economic environment lies in the long-term effects on the railroad system as an enterprise. American railroads, quite literally, never
got over the shock which archaic Progressivism's cruel repudiation of their leadership produced. . . . [W]hat was lost was the spirit of enterprise which had produced such remarkable results from 1897 to 1907 and which had seemed then to stand on the threshold of even greater accomplishments.”
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This is a bit harsh on the Progressives, whose suspicions of the railroads' motives were well founded, given the rail companies' dubious recent history, which was precisely the reason the commission refused to acquiesce to their demands. Could the railroads really be trusted not to pass on the additional revenue to their shareholders or waste it by failing to control their ever-growing costs? The railroads pointed out that two pieces of government legislation had contributed to their rising costs: first, labor legislation aimed at improving the condition of workers, and second, antitrust legislation that prevented the companies from working together and therefore encouraged them to build parallel lines. The railroads were undoubtedly treated badly by the commission, but even though they were now for the most part a mature industry and not the gung ho capitalists of yore, they had not earned the trust of the people.