Page 58 



BETTER FRUIT 



June 



THE EFFICIENT MANAGEMENT OF OUR RAILROADS 



EXTRACTS FROM ADDRESS BY HOWARD ELLIOTT, PRESIDENT NORTHERN PACIFIC 



NOW, when the question of the rail- 

 ways of the country and their 

 rights and requirements are so promi- 

 nently before the public, there is one 

 point on which it is possible for both 

 the public and the railway management 

 to agree; that is, that the railways must 

 either earn or borrow the money which 

 it is necessary to procure to meet the 

 expense of improving old lines and the 

 cost of new lines, and furnishing better 

 trains and better service, which are not 

 only demanded by the public, but are a 

 necessity if the railways are to keep 

 abreast of the normal growth of the 

 country. Suggestions have been made 

 based on theories and methods yet in 

 an experimental stage, and, therefore, 

 unproven, among which none has claimed 

 more space in newspapers and maga- 

 zines than the assertion that American 

 railroads can save $300,000,000 a year — 

 a million a day — by what is termed "sci- 

 entific management." 



It is unfortunate that at a time when 

 all railroads are face to face with the 

 problem of stemming a rising tide of 

 expense and all the serious business con- 



sequences this situation entails, they 

 should be compelled to submit to so bald 

 and blunt a criticism of the efificiency of 

 their management. So widely has public 

 attention been caught by this radical 

 statement that it has seemed desirable 

 that the public be told what it amounts 

 to as a business proposition. Railroad 

 officers are spared this task, however, 

 because the Interstate Commission has 

 discussed it tersely and effectively in a 

 recent opinion about the advance of 

 freight rates. The commission declares 

 that no part of the advanced cost of rail- 

 road operation could be made good by 

 "scientific management," as advocated 

 by a witness in this case, and repudiates 

 the theory in the following language: 



"It was. however, earnestly insisted by 

 the shippers that the railroads might and 

 should find other kinds of economies 

 with which to make good this increase in 

 wages. Several prominent manufacturers 

 testified that in their business in recent 

 years wages had been advanced, but that 

 they had not been able to make corre- 

 sponding advances in the price of their 

 product, and were, therefore, forced to 



Copyright igio by R. M. Kellogg Company, Three Rivers, Michigan 

 BEAUTIFUL DISH OF VIRGINIAS BERRIES 



look about for other ways in which to 

 take up the increase in the cost of 

 production. 



"It was claimed that b3' the introduc- 

 tion of what was termed 'scientific 

 management,' the purpose of which was 

 in various ways to make labor more effi- 

 cient, at the same time increasing the 

 wage paid the laborer himself, much 

 more than the amount of these advances 

 could be saved. One gentleman who 

 described these methods testified that 

 they had been introduced to some extent 

 into the operations of railways with 

 remarkable results, and that from a care- 

 ful analysis and computation he was 

 satisfied that not less than $300,000,000 

 annualljr could be saved by the proper 

 application of these methods to the busi- 

 ness of railroading in the United States. 



"It is difficult to see exactly what 

 application the commission can make in 

 this case of this testimony. The wit- 

 ness, who apparently had most to do 

 with the originating and applying of these 

 methods, testified that they were in 

 actual operation in not over one-tenth 

 of one per cent of all the manufacturing 

 establishments of this country. The sys- 

 tem is everywhere in an experimental 

 stage. To some extent it has been tried 

 and is now being tried 

 by our railways. The 

 representative of railway 

 labor who appeared 

 before us stated that 

 these methods could not 

 and should not be intro- 

 duced into railway work. 

 Upon this record we can 

 hardly find that these 

 methods could be intro- 

 duced into railroad oper- 

 ations to any consider- 

 able extent, much less 

 can we determine the 

 definite amount of sav- 

 ing which could be made. 

 We cannot, therefore, 

 find that these defend- 

 ants could make good 

 any part of these actual 

 advances in wages by 

 the introduction of 'sci- 

 entific management.' " 



There is no necessity 

 for comment upon so 

 thorough and decisive a 

 decision that this theory 

 of railroad management 

 is visionary and imprac- 

 tical. It might well be 

 said of our railroads, that 

 without dressing their 

 methods in imposing 

 terms and giving their 

 ordinary practice an 

 undue and fictitious 

 importance, they have for 

 years been exceptionally 

 active in ferreting out 

 and applying all new 

 ideas that promised bet- 

 ter efficiency. All busi- 

 ness has been seeking to 

 find the best and most 

 economical methods. 



