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12 The Dinner Debate with Graham Claytor

RushJr. Loving Indiana University Press ePub

CHAPTER 12

The Dinner Debate with Graham Claytor

ONE FIRST–CLASS PASSAGE

PENN CENTRAL WAS NOT THE ONLY TROUBLED RAILROAD IN the Northeast. Smaller lines there and in the Midwest were ill as well. By late 1972, seven of the Northeast’s eleven largest railroads were in bankruptcy, and two were tottering so badly their creditors were demanding that they be liquidated. They were suffering because trucks were draining their traffic base and they were burdened by too many routes. Worse yet, the regulators in Washington were indifferent when the roads pled to abandon excess tracks and money-losing services or to offset higher costs by raising their rates.

One night I was having dinner in New York with Graham Claytor and several of his top officers. As usual we began tossing ideas back and forth. This evening, as we began our appetizers, Claytor launched into a long spiel about the bankruptcy problem. As he went on laying out the dilemma that faced the industry, his concern became increasingly visible, for some legislators were even talking of nationalizing all the railroads, a prospect that disturbed both of us.

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7 The Locomotive That Sashayed

RushJr. Loving Indiana University Press ePub

CHAPTER 7

The Locomotive That Sashayed

ONE FIRST–CLASS PASSAGE

TO BE SUCCESSFUL, THE N&W-CHESSIE MERGER WOULD HAVE to depend on a new tool, the computer. Until the mid-1960s most railroads used their computer systems almost solely to manage their finances. Although the railroads had been leaders in technological change in the 1800s, most modern railroaders were slow to adapt. One exception was the Southern Railway’s Bill Brosnan. He introduced railroad operations to computers, taking the Southern into a new era.

The first computer I had ever seen had stood in a basement room in one our buildings at Fort Devens. Compared with the machines NSA operates today, that contraption was inconsequential, yet I had been immensely impressed. Now I was about to meet computers far more sophisticated, machines that would do as much to transform railroad operations as early computers had done for code breaking.

Not long after I began to increase our coverage of railroads, our publisher, Tennant Bryan, returned from a directors meeting of the Southern Railway System. For years a representative of Richmond Newspapers had sat on the Southern’s board. Bryan’s predecessor had been Dr. Douglas Southall Freeman, the Pulitzer Prize–winning Civil War historian, who had edited the News-Leader. At their gathering, Brosnan had shown his directors a new computer system, and on his return to Richmond Bryan suggested to my boss, John Leard, that I go down to Atlanta and see it.

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10 “The Greatest Thing Since Sex and Watermelon”

RushJr. Loving Indiana University Press ePub

CHAPTER 10

“The Greatest Thing Since Sex & Watermelon”

ONE FIRST–CLASS PASSAGE

ONCE THE SECURITIES AND EXCHANGE COMMISSION AND THE Interstate Commerce Commission had verified my Penn Central exposé, I was able to take on Gil Burck’s mantle as the magazine’s transportation specialist, and I went at it with exultation. The first piece was about United Air Lines. Six months after Penn Central’s fall, recognizing they should avoid the mistakes of the railroad’s board, United’s directors had staged a coup, replacing the company’s president with the man who ran a hotel chain the airline owned—Edward E. Carlson, who became one of the best chief executives in the air transport industry. Eddie, who started as a bellhop, turned around United in a year.

It was the makings of a magnificent story, and adding to it, I was able to ferret out how the directors had come to this wrenching decision. It was a drama from inside the boardroom, a place where reporters never ventured. The story caused a sensation, stirring the directors of Pan American World Airways to oust their CEO and causing other publications to begin producing boardroom dramas.

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14 “Who Knows Hays Watkins?”

RushJr. Loving Indiana University Press ePub

CHAPTER 14

“Who Knows Hays Watkins?”

ONE FIRST-CLASS PASSAGE

ALL INDUSTRIES AT ONE TIME OR ANOTHER ARE VICTIMS OF changes in technology, and sometimes it can be fatal. Some of my wife’s ancestors were wagon makers. They were said to be one of the South’s largest producers of wagons, turning out 15,000 a year, and, when the public began buying automobiles and trucks, the men running the company thought them a passing fad. Despite their prediction, the market for cars and trucks took off, and in the 1940s Nissen wagons finally succumbed to the new competition.

Newspapers, magazines, and railroads were created by new technology and could die by the same hand. The train had replaced the canal boat and the stagecoach, but by the 1970s it was losing to trucks, automobiles, and airliners. In fact, when the Post Office shut down its mail cars and moved all its intercity mail to trucks and airliners, the railroads’ traditional businesses of express packages and less-than-carload freight were shifting to the highways, and once again it was made possible by another innovation, the interstate highway system.

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18 J. B. Hunt Takes a Ride on the Atchison, Topeka and Santa Fe

RushJr. Loving Indiana University Press ePub

CHAPTER 18

J. B. Hunt Takes a Ride on the Atchison, Topeka & Santa Fe

ONE FIRST–CLASS PASSAGE

WHILE A FEW PEOPLE LIKE SWEENEY AND BILL JOHNSON wanted out of the business, other railroaders were struggling to decrypt the mysteries of the free market. Most still did not understand the key to the industry’s future—the intermodal business—and some did not want to. Many men like CSX’s Jim Hagen had always recognized its potential, if it could be priced high enough to bring in a reasonable profit.

Although intermodal traffic, especially trips combining transportation modes like boats and trains, had been in existence since the infancy of the railroads, mixing rail service with trucking was a late bloomer. Tractor-trailers, or semis, had been traveling America’s highways since the 1920s, and some, delivering new cars to dealers, had been operating since the invention of the automobile, two decades before that. Railroads had experimented with piggyback, or intermodal, as early as the 1930s. Yet, it was not until 1955 that the first batch of highway trailers was placed on regularly scheduled intermodal trains. The Pennsylvania Railroad opened the service with dedicated trains, one each way, each day, between New York and Chicago. The business grew, and other railroads expanded their own services.

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