USA > Massachusetts > Suffolk County > Boston > Fifty years of Boston; a memorial volume issued in commemoration of the tercentenary of 1930; 1880-1930, Pt. 1 > Part 32
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Part 1 | Part 2 | Part 3 | Part 4 | Part 5 | Part 6 | Part 7 | Part 8 | Part 9 | Part 10 | Part 11 | Part 12 | Part 13 | Part 14 | Part 15 | Part 16 | Part 17 | Part 18 | Part 19 | Part 20 | Part 21 | Part 22 | Part 23 | Part 24 | Part 25 | Part 26 | Part 27 | Part 28 | Part 29 | Part 30 | Part 31 | Part 32 | Part 33 | Part 34 | Part 35 | Part 36 | Part 37 | Part 38 | Part 39 | Part 40 | Part 41 | Part 42 | Part 43 | Part 44 | Part 45 | Part 46 | Part 47 | Part 48 | Part 49 | Part 50
23
57,300,000
19,713,669,535
1899
40
40,400,000
7,086,285,271
1925.
22
60,300,000
21.511,982,677
1900.
37
38,000,000
6,180,308,447
1926.
21
68,000,000
22,925,622,870
1901.
36
37,000,000
7,191,685,110
1927
21
72,650,000
25,573,245,478
1902.
32
33,000,000
6,930,016,794
1928.
20
78,400,000
26,775,596,410
1903.
30
32,500,000
6,717,416,678
1929.
20
86,550,000
25,601,570,216
1904
28
28,450,000
6,631,546,802
1930.
18
97,475,000
27,152,741,242
1905.
28
28,450,000
7,969,401,400
TABLE IV TRANSACTIONS ON THE BOSTON STOCK EXCHANGE Figures for Earlier Years are not Available.
YEAR.
Number Shares Stocks.
Face Value Bonds.
YEAR
Number Shares Stocks
Face Value Bonds
1905.
16,080,827
$14,833,605
1918.
3,939,008
$18,151,940
1906.
17,444,893
8,221,430
1919
9,235,751
28,039,700
1907.
14,308,687
7,682,700
1920.
6,696,423
24,674,300
1908.
13,002,235
30,828,000
1921.
3,974,005
16,198,950
1909.
15,507,303
32,365,820
1922.
5,495,051
19,064,750
1910.
10,679,572
15,253,387
1923.
4,783,324
20,718,750
1911.
7,744,737
15,547,230
1924.
5,300,862
16,624,450
1912.
11,134,908
12,319,000
1925.
9,238,304
8,141,090
1913.
5,705,588
10,569,300
1926.
9,562,031
7,153,447
1914.
3,522,187
6,617,400
1927.
12,171,549
7,742,313
1915.
12,603,768
9,835,600
1928.
19,069,761
8,655,199
1916.
13,078,5SS
15,650,300
1929.
24,625,115
11,147,245
1917.
5,090,982
17,724,810
1930.
15,856,504
5,599,300
THE RAILROADS
By WILLIAM J. CUNNINGHAM
INTRODUCTION
East of Boston lies the ocean, reached through the main ship channel and its branches. North, west and south, like a wide-open fan, spread the twinned rails that link the city with the rest of New England. These radiating lines are combined in three railroad systems, territorially, if not always finan- cially, distinct. Each road drains its own field and has its own gateways to the interior of the continent. Each maintains separate docks at the water- front. One of them, the Boston and Maine, receives and discharges its pas- sengers at the newly rebuilt North Station, while the South Station, recently reconstructed in the interior, suffices for the other two. The service rendered to the city by these three systems, their origins and their vicissitudes, form a story which is not without its dramatic features, though for the most part sober and prosaic. This story is the subject of the following article.
Industrially and commercially Boston is the capital of New England and cannot be separated from its hinterland. From the earliest days of the Colonies New England has been regarded as a section apart and it still remains "an economic unit on the outskirts of the central commercial territory of the United States." These influences have made their impress upon the organization of the New England railroads. They have not, like the railroads of other sec- tions, been extended beyond the borders of the region, nor, except as to the Boston and Albany, have they been linked up with the east and west trunk lines. Even in the case of the Boston and Albany the road is operated locally as a separate New England unit.
Within the section there is, as I have pointed out, a well-marked terri- torial division. The New York, New Haven and Hartford system operates practically all of the rail lines in Connecticut, Rhode Island and southeastern Massachusetts; the Boston and Maine serves the northern and northeasterly parts of Massachusetts and all of New Hampshire; the Boston and Albany, with its west and east line connecting the two cities in its name, forms a dividing line between the southern territory served by the New Haven and the northern territory of the Boston and Maine. In Vermont the rail service is performed by the Central Vermont and the Rutland; in Maine, there are the Maine Central and the Bangor and Aroostook properties.
The New Haven road, serving as it does the rich industrial sections of southern New England, is called upon to bring in the greater part of the raw materials, such as coal and oil; cotton and wool, iron, steel, copper and other metals; leather and raw hides; lumber, cement and other building materials; and a multitude of other things needed in manufacturing processes and not produced locally. The road also brings in practically all of the foodstuffs consuined in the industrial sections it serves, such as flour and cereals from the Western States, fruits from California and Florida, meats from Chicago and
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THE RAILROADS
vegetables from various parts of the country. Outbound, the New Haven rails carry the high grade manufactures and other products in which New England specializes. Fresh fish is one of these. The railroad runs a special fast freight train daily from Boston primarily to carry fish to New York.
The Boston and Maine has traffic characteristics similar to those of the New Haven road but in addition it carries some products from the forests of the northern sections and brings some export traffic from its western connec- tions at the Hudson river to the Boston piers. At one time the volume of exports, especially in grain, was much heavier than at present.
The traffic of the Boston and Albany is similar to that of the New Haven and the Boston and Maine, but includes a larger percentage of export traffic through the waterfront facilities in East Boston. The Albany, however, does not serve as inany industrial cities and towns as the other two railroads.
Because of the general character of the merchandise exchanged,- food, raw materials and goods for export coming in, manufactured products going out, -- the freight traffic into New England, in tons carried, is from three to four times the tonnage of outbound freight. There are about three carloads of raw materials inbound to one carload outbound in finished products. Con- sequently the empty cars westbound are from two-thirds to three-quarters of the total cars mnoved in freight trains in that direction.
Both the New Haven and the Boston and Albany have heavy passenger traffic, the former between Boston and New York and the South on the Shore Line; the latter in passengers to and from Boston and the West. The Boston and Maine, also, has a fairly dense passenger traffic between Boston and the Maine cities, and Boston and Montreal. At one time the suburban passenger traffic by rail into and out of Boston on all three railroads was very heavy, but a large part has been lost to electric railways, subways and motor vehicles.
The tracks of the New Haven system naturally enter Boston from a south- erly direction; those of the Boston and Maine enter on the north; while those of the Boston and Albany are from the west. Within the city the freight yards of the New Haven in South Boston are connected with the yards of the Boston and Maine in Somerville by the Union Freight Railroad, which carries the cars through the city on Atlantic avenue - a rather primitive and unsatis- factory belt line. The Boston and Albany has its own line - the Grand Junc- tion branch - which connects its Beacon Park (Allston) terminal with East Boston by a route through Cambridge, Somerville, Everett and Chelsea, inter- changing with the Boston and Maine in Somerville. Interchange between the three roads, for other than Boston business, however, is made outside of the Boston district, at such points as Worcester, Framingham, Concord Junction and Lowell.
GENERAL HISTORICAL SUMMARY
Historically, in its railroad aspect, the half-century ended with the Ter- centenary of 1930 may be divided into three parts, two of two score years each and one of ten. The first two decades, 1880-1900, were years of con- solidation, system building and favorably rising development in public service and financial strength. Then came two decades, 1900-20, of trouble and financial disintegration and impairment of morale and public service. And,
250
FIFTY YEARS OF BOSTON
finally, in the decade 1920-30, there has been a remarkable achievement in rehabilitation of rail service and earning power and restoration of public confidence.
New England was forehanded in providing itself with an adequate net- work of rail lines of conununication. New railroads and extensions after 1880 were relatively few in comparison with other scctions of the country, and since 1900 the total railroad mileage in New England has been practically unchanged, the few additions having been offset by abandonments. During the period from 1880 to 1900, however, there were profound changes in cor- porate organization, as the large number of small and independent lines of 1880 were gradually absorbed by the larger systems. That program of unifica- tion came to an end in 1900. Since then no important permanent changes have occurred.
The total railroad mileage in Massachusetts in 1880 was 1,893 and in 1930 it was 2,015. In 1880 there were twenty-seven separate railroad operating companies reporting to the Railroad Commission of the state. There are now, as we have seen, but three important systems. These three systems in 1930 comprised over ninety-four per cent of all of the mileage within the state.
Massachusetts, and in fact all New England, is peculiarly dependent upon transportation service. It has neither coal nor iron. Its agricultural resources are not sufficient to support its population. By far the greater part of the raw materials for its industries have to be procured from outside its borders and its location on or near tidewater is relatively of much less importance than it was before the country developed and the railway systems of the country became so complete. In short, New England today has to import from out- side its borders by far the greater part of its food, as well as by far the greater part of the raw materials for its industries; it has also to send by far the greater part of its finished product to markets which lie outside its borders, and much the larger part of all this carriage has to be done by railroad.
While it is true that the railroads have made many mistakes in dealing with the situation and while any critic, looking backward, can point out instances in which they have failed to recognize the interdependence of railroads on the one hand and industry and commerce on the other, it is also true that they have donc much to nullify the adverse distance factor. Rates as a rule have been established with a view to keeping the New England manufacturer as nearly as practicable on a parity with his competitor closer to raw materials and markets. In fact, the present rate structure is the result of an evolution of over half a century, the main principles having been established before the beginning of federal regulation of railways. Recently the railroads have recognized more fully than ever before the importance of regular, prompt service and today the time elapsed of goods in transit has been so reduced that for all practical purposes the New England industries have been brought much closer to their sources of raw materials and their markets.
Up to about 1908 the securities of the principal railroads in New England were regarded as gilt-edged investments. The long record of continuous dividend payments and the favorable balance sheets gave these securities high standing and the common stocks commanded substantial premiums. Early
251
THE RAILROADS
in the present century economic conditions over which the railroads had no control, coupled with mistakes on the part of some of them, seriously affected their earnings and standing, with the result that by 1914 the value of their securities had, except in the case of the Boston and Albany, which was under lease to the New York Central, fallen to a very low level.
After the World War began in August, 1914, the financial condition of the New England carriers grew even more serious. In 1916, however, the industrial. activity incident to war supply orders and a peak load of rail traffic brought a welcome, though temporary, relief. Then, in April, 1917, the United States entered the conflict and, on January 1, 1918, all railroads were taken over by President Wilson under war emergency powers. The rentals paid to the rail- road corporations by the government prevented further insolvency, but inas- much as the fundamental defects had not been corrected, the New Haven and the Boston and Maine were in a weakened condition when, on March 1, 1920, the properties were handed back for private management. The Boston and Maine, with the assistance of the government, had partially met its problem by reorganization, but subsequent events proved that the solution was not complete.
The promising start in rehabilitation, under the higher rates authorized by the Interstate Commerce Commission in August, 1920, was slowed up by the business depression of 1921 and was stalled in the fall of 1922 by a prolonged, nation-wide strike of railroad shopmen. The skies began to clear in 1923 and from that time the improvement has been continuous. The quality of service has become better than ever before, public confidence in railroad management has been regained, the employee morale restored, operating efficiency has reached high levels never before attained and railroad earning power and credit have been greatly improved. The New Haven, after fifteen lean years for its stock- holders, resuined the payment of dividends in 1928. The Boston and Maine had begun payment of dividends on first preferred stock in 1926, followed by payment on all other preferred stocks in 1929, and in April, 1930, an initial dividend at the rate of four per cent per annum was paid on the common stock.
The improvement since the war in the operating efficiency of the New England railroads has been relatively greater than that of the railroads of the country as a whole, as is indicated by the following figures.
Comparing the 1929 figures with those of 1923:
Increase of net railway operating income - for New England 150 per cent; for the United States thirty per cent.
Decrease in the ratio of expenses to total revenues - for New England fourteen per cent; for the United States eight per cent.
Gain in net train load - for New England twenty-eight per cent; for the United States thirteen per cent.
Gain in gross ton miles per train hour - for New England seventy-six per cent; for the United States forty-six per cent.
Increase in the movement of freight car miles per day - for New England sixty-one per cent; for the United States seventeen per cent.
Improvement in ton miles per unit of coal consumed -- for New England fifty-two per cent; for the United States twenty-nine per cent.
252
FIFTY YEARS OF BOSTON
The greater relative gain of the New England roads in these respects does not mean that they are now ahead of the average of other roads of the country but that they have made notable progress in bringing their operating standards into line with the best modern practice. The improvement which these figures illustrate has resulted in better service to the public and greatly improved net earnings.
From this summary, dealing with the New England railroads collectively, we may now review the outstanding events in the fifty-year history of each of the three systems and note in somewhat greater detail the causes and extent of the downfall of 1908-16 and the recovery of 1923-30.
NEW YORK, NEW HAVEN AND HARTFORD RAILROAD SYSTEM
The present New Haven system is the result of nearly a hundred years of railroad building and consolidation, using the word "consolidation" loosely to signify the putting together in one form or another of separate railroads. To go into that development in detail would take too much space and would be out of place in a short account of the railroads serving Boston. For the purpose of this article the following summary will suffice.
The Hartford and New Haven Railroad was incorporated in 1833, the New York and New Haven Railroad in 1844. These two roads were merged in 1872 under the name of the New York, New Haven and Hartford Railroad. By the extension of its own lines and the acquisition of other small railroads the system had in 1892 reached Providence. In 1893 it leased the Old Colony Railroad, chartered'in 1844, which in 1888 had leased the Boston and Providence Railroad, chartered in 1831. In 1898 the New England Railroad was acquired. This gave to the New Haven system all of the rails in southern New England except the Central Vermont, a subsidiary of the Grand Trunk System of Canada.
The Old Colony Railroad had for a number of years prior to its lease to the New Haven in 1893 maintained and operated the Fall River Line of steamboats between Fall River and New York. Between 1893 and 1904 the New Haven acquired all the other steamboat lines on the Sound.
Up to the middle of the first decade of the present century the New Haven Road was strong financially. The property was well operated and gave good public service. During the depression of 1907-08 the road with all others suffered through loss of revenucs and pressure of higher operating costs but the shrinkage in net income was regarded as temporary. It was about that time, however, that the management, under Charles S. Mellen as president, engaged in an ambitious attempt to acquire all the railroads in New England. By 1912 the New Haven had acquired a majority of the stock of the Boston and Maine and, through the ownership by the Boston and Maine, control of the Maine Central. Arrangements had been made with the New York Central for joint control of the Rutland Railroad and for a voice in the management of the Boston and Albany Railroad, under lease to the New York Central. The New Haven had also purchascd control of the greater part of the electric railways in the territory served by it in Connecticut, Rhode Island and parts of Massachusetts and had acquired a competing electric railway - the New York, Westchester and Boston - at the New York end of the line. It had also extended its
i
253
THE RAILROADS
interests in steamship lines by the purchase of control of the Merchants and Miners Transportation Company, with lines from Boston and Providence to southern ports, and the Eastern Steamship Company, with its "outside" line to New York and services to ports in Maine and the Maritime Provinces. The New Haven had also invaded trunk line territory by purchasing stock control of the New York, Ontario and Western Railway, with lines from tidewater to the heart of the anthracite region in Pennsylvania and to Lake Ontario at Oswego.
This program of expansion strained the financial capacity of the New Haven and met with serious public opposition. Suit was brought in the courts of Massachusetts and, because the Boston and Maine stock control purchase in 1907 had not had legislative approval, the New Haven was ordered to dispose of the stock. Pending the enactment of special legislation the stock was sold to John L. Billard, who, when the Massachusetts Legislature in 1909 passed an act incorporating the Boston Railroad Holding Company, sold the Boston and Maine stock to the holding company. That company, whose stock was owned almost entirely by the New Haven road, was incorporated solely to acquire and hold a majority of Boston and Maine stock and by its charter was forbidden to sell any of the stock of the Boston and Maine without the consent of the Massa- chusetts Legislature. The New Haven thus had control of the Boston and Maine through the holding company. In 1910 Charles S. Mellen, then presi- dent of the New Haven, became president also of the Boston and Maine and Maine Central and in general the operation of the Boston and Maine was taken over by the New Haven management.
Public criticism of methods resulted in a change in management. Mellen, who had been president since 1902, resigned in July, 1913, and was succeeded by Howard Elliott. When he took office the plan for a New England system was changed. Instead of a central executive actively controlling all units as one, each was to have its president and each property was to be operated with a large degree of local autonomy, co-ordinated by a chairman who would act only in broad matters of policy. Under that plan Howard Elliott became chairman of the board, after acting a month or two as president. James H. Hustis was elected president of the New Haven; Morris McDonald became president of both the Boston and Maine and the Maine Central; L. S. Storrs was elected president of the Connecticut Company to operate the strect railways, and the intention was to elect a separate president of the New England Navigation Company.
While these steps toward corporate unification were being inade, the Attorney-General of the United States instituted proceedings to compel the dissolution of the combination and the New Haven directors were brought to trial on a charge of unlawful conspiracy. The investigation and the trial lasted more than a year (1914-15). The directors were acquitted, but the company came to an agreement with the Attorney-General under which, on the part of the government, the dissolution suit would be discontinued and, on the part of the railroad, the unified system would be dismembered. The stock of the Boston Railroad Holding Company, which controlled the Boston and Maine, was placed in the hands of public trustees, who were directed to dis- pose of it within a stated number of years; the New Haven agreed to relinquish
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254
FIFTY YEARS OF BOSTON
its control of the Connecticut and Rhode Island trolleys and its stock owner- ship in the Merchants and Miners and the Eastern Steamship Companies, and to cancel the agreement with the New York Central, giving the New Haven a voice in Boston and Albany management.
While the dissolution proceedings were in progress the management of the New Haven could do little to restore the impairment in morale, earning power and service, but a real start toward rehabilitation was made in 1915. With the dissolution of the system Howard Elliott had, in 1914, assumed the presidency of the company as well as the chairmanship of the Board and James H. Hustis was elected president of the Boston and Maine. Elliott brought in as his assistant Edward J. Pearson, and when Elliott resigned as president in 1916, Pearson was elected to the office.
The program of rehabilitation was interrupted by the war. The railroad was called upon to carry a heavy traffic in raw materials and finished products to and from the many plants engaged in the manufacture of war supplies, and the demand of those industrial enterprises for capital placed the railroad in a disadvantageous position in competing for funds for improvements. These difficulties became greater in April, 1917, when the United States entered the war, and during the last nine months of that year, when the railroads were operated as a unified system by a committee of railroad presidents (known as the Railroads' War Board), and throughout the two years (1918 and 1919) of federal operation under a Director General of Railroads, nothing could be done but take care of the immediate pressing demands of traffic. The New Haven Railroad in common with nearly all railroads emerged from the war period in a weakened state, physically, financially and in employee morale.
In 1920, with the restoration of the pre-war status of private management, the New Haven Board and President Pearson faced an exceedingly heavy task. Large sums had been borrowed from the government to finance physical improve- ments imperatively needed for war traffic and to refund maturing obligations at a time when capital was difficult to obtain. The net income was insufficient to pay interest charges on the existing obligations. The heavily increased costs of operation had not been met fully by the advances in rates. The general condition of tlie locomotives and freight cars was far below normal. The morale had been adversely affected by the war-time centralization of power in Wash- ington and the weakening of local control. The degree of operating efficiency was relatively low.
Throughout 1921 and early in 1922 considerable improvement had been made but progress was stopped by the nation-wide strike of railroad shopmen on July 1, 1922, against a wage reduction ordered by the United States Labor Board. The poor condition of equipment interfered with the regularity of train service; the movement of freight cars was impeded and the serious con- gestion which ensued required the drastic remedy of an embargo. These abnormal conditions continued until the middle of 1923.
Since then there has been a progressive and gratifying improvement and by 1928 the operating efficiency and quality of service were better than ever before. Net earnings had grown in such substantial degree that dividend payments, suspended in 1913, were resumed. The refunding of maturing
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CHARLES STATION, TRAFFIC CIRCLE AND LONGFELLOW BRIDGE
THE NEW NORTH STATION (See Page 265)
256
FIFTY YEARS OF BOSTON
obligations had been accomplished by an unusual degree of co-operation on the part of leaders in industry and finance, betokening a renewal of the foriner public confidence in the integrity of the management, and friendly relations between the company and its employees were re-established.
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