Main Lines: Rebirth of the North American Railroads, 1970-2002 (review)

Although the railroads remained among North America's biggest businesses long after the era in which they were pioneers of corporate organization, business historians have not paid them a lot of attention as far as the twentieth century is concerned. One of the finest studies of recent years, Steven W. Usselman's Regulating Railroad Innovation (2002), does an exemplary job of using the railroads as a prism through which to view the interplay of business, politics, labor and technological innovation in the United States up to 1920—a date that conventional wisdom holds as the last before the railroads entered a slow and seemingly inevitable decline. Stephen Salsbury's No Way to Run a Railroad (1982) remains a near-exemplary diagnosis of the ills of the big-business merger movement of the 1960s, as represented by the disaster of the Penn Central bankruptcy, for many years the largest in American corporate history. And those railroad historians whose interests focus on particular companies are often quite adept at bringing to their narratives a sense of how the organizational and operational peculiarities of railroading impacts upon business performance. But, perhaps baulking at the sheer magnitude of the task, very few historians have looked at the overall trajectory of the industry over the decades since World War I, as railroads grappled with the twin challenges of ever-increasing competition from road and air transport on the one hand, and federal and state regulation of, particularly, freight rates and labor, on the other. Albro Martin's Railroads Triumphant (1992) was a brave if flawed attempt, written in the decade following the Staggers Act of 1980, a revolutionary piece of legislation that, by releasing the railroads from many of the regulatory controls imposed by the Interstate Commerce Commission, allowed them to price their freight services competitively.

Saunders's book essentially is a history of the build-up to that legislation in the wake of the Penn Central collapse and the subsequent—although far from assured—revival of the railroads as private-sector freight haulers. A sequel to his Merging Lines (2001), itself a heavily revised edition of Railroad Mergers (1978), Main Lines traces the continuation of the merger movement that has culminated, so far, in just six corporations dominating North American railroading. The big difference, according to Saunders, is that while the merger movement prior to 1970 was a largely unsuccessful response to financial problems caused in no small measure by a regulatory regime designed when railroads had no competitors, deregulation—which started in the 1970s—has helped to make the more recent restructuring a success. In the 1960s and into the 1970s, the railroads' return on capital was so low that they could no longer attract enough investment to renew their infrastructure. That has now largely changed, thanks to the freedom, within certain broad limits, to charge market rates combined with massive increases in productivity stemming from technological innovation and changes in working practices. Mergers have been part of the process of sweating the assets, and have helped—at least when things have gone well, which they haven't always—to improve the quality of service to shippers.

Saunders tells a good story well, tracing the implications of government policy and high politics through not only to the effects on individual railroad corporations, but also through the nitty-gritty of operations on the ground. Written, according to the author, mostly for railroaders and railfans, this nevertheless is a book worthy of academics' attention. However, there are limits to its usefulness when considered as a work of scholarship. In the first place it partially exemplifies the jibe that writing contemporary history amounts to little more than up-market journalism since—and Saunders is quite open about this—many of his sources are journalistic. Many journalists are of course assiduous in their research, and their observations are, as readers of this journal will need no reminding...