History of the Louisville & Nashville Railroad

4 The Contours of Postwar Strategy

4 The Contours of Postwar Strategy The defeat of the Confederacy thrust a host of decisions upon the shoulders of southern railroad managers. Wartime demands had so twisted the business and functioning of every line as to destroy any workable definition of normal peacetime operations. Part of the distortion involved simply the abnormal press of military traffic which would gradually disappear as regular trade relations resumed. Another part involved a more permanent alteration in the economic environment itself and would require major policy adjustments by every company. Indeed the South's economic environment in 1865 scarcely resembled that of i860, though many of its characteristics were but the accelerated development of trends already evident in the 1850s. The most obvious difference was the South's ravaged economy. Exhausted and trampled by four years of conflict, the section needed massive doses of capital, strong leadership, and much patience to reconstruct the agricultural prosperity of the 1850s. Plantations were overrun and in disrepair, the labor supply was uncertain, banking and credit facilities were nonexistent, and state governments lacked cohesion or direction. Commercial relations disrupted by the war had to be restored, and the industrial potential of the region, so vital to economic diversification, remained pitifully unrealized. Over every activity hung the uncertain political atmosphere of Reconstruction. The crippled transportation system shared all these defects and added a disheartening dilemma of its own: 6o HISTORY OF THE LOUISVILLE & NASHVILLE RAILROAD restoration of the transportation system was needed to rehabilitate the South's economy, but by the same token the financial survival of the railroads depended upon a revived economy capable of supporting them. For nearly all southern roads, the task of restoration superseded all other problems and absorbed most of the officers' attention until 1868. As already noted, the L & N faced no such difficulties and so possessed an enormous advantage over other southern roads. But it had no immunity from some basic adjustments required by the altered economic environment . Unlike the more established southern companies, the L & N lacked any real prewar model upon which to calculate its future strategy. Whether or not the absence of a traditional set of policies hurt the company in a changing environment, it did force L & N officers to make some momentous decisions within a year after Appomattox. Though the debate over policy began as early as 1863, the balm of wartime profits tended to dampen serious differences of opinion. But the disappearance of that abnormal prosperity soon underscored the urgency of fashioning a new strategy for peacetime. Inevitably the debate produced a sharp clash of positions between those advocating a bold, aggressive policy and those favoring a prudent consolidation of the company's existing strategic advantages. Since the two positions were based upon opposing interpretations of the postwar economic environment, it is helpful to consider that environment briefly. A Shifting Landscape With few exceptions, the control of southern railroads remained in the hands of the same men who dominated them before the war. Like the leadership of the L & N, they had built the early railroads and represented powerful commercial and financial interests in the territory drained by the road, especially the key terminal city. Since their economic horizon rarely extended beyond that city, they assumed a naturally provincial attitude toward the road's function. They conceived it primarily as their most potent weapon in the growing rivalry between the various commercial and distributing centers of the South. Possessing strong community and regional ties, antebellum southern railroad leaders sought to achieve three basic goals. First, they hoped to make the road a profitable long-term investment in itself. Secondly, they wished to localize traffic, and thereby commercial activity, at the principal terminus. Finally, they saw their road as the essential tool for developing the economic resources of the region tributary to the road. In one sense, the latter two points melded together, for extension of the road both THE CONTOURS OF POSTWAR STRATEGY 6 l opened adjacent areas to the marketplace and prevented rival lines from tapping the area's resources for some other terminal city. Since nearly all southern railroad leaders had external investments, their transportation work became a logical extension of their other financial interests. From this localized perspective emerged two closely related concepts , labeled for our purposes territorial and developmental, that guided southern railroad policy-making prior to the Civil War. The first formulated a definition of the road's marketplace and tributary region...