Trolley Competition With the Railroads

IT is barely eight years since street railroads have outgrown the horse-car period, and have required the use of the word “ interurban ” to describe the enlargement of their field of traffic. The electric installations of the early nineties served their purpose in a measure, and were in many cases attended by extensions of the local traction lines, but their competition with steam railroads was entirely negligible until after 1895. The year 1895 is a landmark in the history of electric roads; prior to that time it may be broadly said that the street railroad system of each city was an independent unit, organized with the sole object of carrying passengers from one part of town to another, and with a remote interest, if any interest at all, in traffic centring outside the city limits. The possibilities to be achieved by running electric cars at moderately high speed along ten or fifteen mile stretches of country roads, deriving both a local and a species of through business by coupling up adjacent cities and towns, came, as a result of improvements in the art, suddenly into view, and a series of extensive additions to existing lines were planned or begun, radiating out far and wide from the original confines of the city limits and the adjacent suburbs.

It may perhaps be questioned whether the steam railroads were really as slow as they appeared to be in realizing that in this interurban development they would shortly have to face novel and strongly fortified competition. The electric roads were spreading, and there was no obvious way to prevent them from doing so. Early attempts at competition were treated as isolated cases, and it is only since 1898 that the electric roads have demanded recognition in the field of short-haul passenger traffic.

From 1898 through 1901 the characteristic of interurban road development was exceedingly rapid extension, and during 1902 and 1903 there have been considerable reorganization and adjustment, the loose ends have been coupled up, and extension has been somewhat more moderate and perhaps better directed than previously. The government census report on electric railroads for 1902 estimated the total length of main track on June 30 of that year as 16,648 miles, as against a street railroad mileage of 5783 in 1890. During the twelve years, according to the report, mileage worked by animal power decreased 95 per cent; by cable power, 51 per cent, and by steam power, 76 per cent, while electric working increased 1637 per cent.

In spite of the construction and connection of interurban electric lines to form through routes fifty miles or more in length, their profitable territory still lies about a series of centres, and it is worthy of note that these centres are not cities of the first magnitude, and doubtless never will be. The interurban traffic about New York is carried by the steam roads, because the congestion in the streets is too great to permit any extended use of cars that must thread their way through eight or ten miles of city streets before reaching open country. Similarly, in Chicago, the Illinois Central runs a lucrative suburban service with cars of special type, and reports that it does not feel the competition of the street cars, which nominally compete in the service to most of the suburban points reached, but have not the advantage of a private right of way, and cannot furnish rapid transit in its true meaning. It is a primary necessity in the suburban traffic of a great city that rapidly moving cars shall not occupy the same thoroughfare with slow moving cars and vehicles, and the cost of securing suitable terminals and entrances into such a city effectively shuts out any sporadic competition. Railroads such as the proposed New York & Portchester, which is endeavoring to build a twenty-four mile suburban line out of New York city, electrically equipped, connecting with the Rapid Transit Subway, scarcely come within the scope of the present study, but are rather to be classed with the elevated and underground lines of great cities as portions of a purely local system, differing from interurban roads in general in the vital characteristic that they do not enter the city at grade, or receive and discharge passengers in the streets at street level.

The maximum effect of electric competition at the present period is felt in localities where there are groups of prosperous cities and towns within a radius of from ten to forty miles of one another; and this competition is in some cases so successful that the steam railroads have lost practically their entire local short-haul traffic, while the electric roads have created for themselves a business not merely greater than the entire traffic that previously existed, but many times greater. In 1895 the Lake Shore & Michigan Southern carried 104,426 westbound and 98,588 eastbound passengers between Cleveland and Oberlin, Ohio, thirty-four miles west, and intermediate points. The competition of the electric roads, which at this time had commenced building a network of lines around Cleveland, was so severe, that in 1896 the steam road carried 68,000 passengers less, between the points named, and in 1902 carried a total of 91,761, as against 203,014, seven years before. Between Cleveland and Painesville, twenty-nine miles, and intermediate points, the Lake Shore & Michigan Southern carried a total of 199,292, or an average of 16,608 a month in 1895, and 28, 708, or an average of 2392 a month, in 1902.

In other words, the steam road carried more passengers in two months, during the formative period of the electric lines, than it did in a year, after they were completed and had developed their traffic between the competitive points.

The following table summarizes these results, showing the surprising traffic losses which the steam roads have sustained. The lower average fare on the New York, Chicago & St. Louis indicates the effort made by that company to compete with the electric road for the business, but the falling off in number of passengers carried shows how futile this effort has been.

LAKE SHORE & MICHIGAN SOUTHERN.

PASSENGERS CARRIED BETWEEN CLEVELAND AND OBERLIN, AND INTERMEDIATE POINTS.

Westbound. Eastbound. Total. Average per month.
1895 104,426 98,588 203,014 16,918
1902 46,328 45,433 91,761 7,647

PASSENGERS CARRIED BETWEEN CLEVELAND AND PAINESVILLE AND INTERMEDIATE POINTS.

Westbound. Eastbound. Total. Average per month.
1895 97,460 101,832 199,292 16,608
1902 13,106 15,602 28,708 2,392

NEW YORK, CHICAGO & ST. LOUIS.

PASSENGERS CARRIED BETWEEN CLEVELAND AND LORAIN.

Total Passengers. Revenue. Average Revenue.
1895 42,526 $25,523 60 c.
1902 9,795 4,379 44 c.

It is to be regretted that the electric lines do not keep their records in such a shape that an exact parallel can be drawn, comparing their gains with the losses of the steam roads. The Cleveland, Elyria & Western kept such records for a time with considerable care, but discontinued the practice because it involved too much bookkeeping. Hence it is only possible to show the traffic over the entire system, which goes beyond Oberlin to Norwalk and other points, reaching practically the same cities and towns that the Lake Shore & Michigan Southern reaches, together with some additional ones. In 1902, the electric road carried approximately three million passengers; well over three times as many as were carried in 1899, while the steam road, recovering from its low-water mark of 71,755, carried 91,761. Although the comparison is only approximate, on account of the additional points reached by the electric road, it at least serves to show what has become of the short-haul traffic.

The really significant part of such figures is not the traffic lost by the steam roads, but the entirely new traffic created by the electric lines, seemingly out of nothing. The results which followed the opening of the Detroit, Ypsilanti, Ann Arbor & Jackson electric road between Detroit and Ann Arbor furnish a striking example of this. Ann Arbor is forty miles from Detroit, on the line of the Michigan Central Railroad, and had at the last census a population of less than 15,000, exclusive of the large transient residence at the University of Michigan. Before the electric road was built, the purely local business of the Michigan Central between Detroit and Ann Arbor was estimated at about two hundred passengers a day. During the first summer after it was opened, the electric road averaged approximately four thousand passengers a day between the same points, and although some part of this travel was doubtless due to novelty, the steady winter and summer business of the electric line has been running from ten to twenty times as great as the maximum traffic ever enjoyed by the Michigan Central.

These surprising increases in what may be called the visible business of a locality are due in part to the extension of the suburban residential territory of each city, following improved means of getting “there and back.” But the entirely new feature which the interurban roads have introduced into the traffic situation is the promotion of what may be called the traveling habit.

There are citizens of New England today who can remember when prayers were offered in the churches for the hardy traveler of Boston who proposed to undertake a trip to New York; steam communication has lessened tenfold the minimum amount of urgency which would induce a trip of a hundred miles, but it has remained for the electric road to keep people constantly traveling short distances, impelled by motives which would not have been sufficient to start them, even five years ago. A twentymile journey on a steam railroad requires as much preparation as a twohundred-mile journey, but the interurban car, leisurely traversing the streets of the town to collect its passengers, at frequent intervals, is such a convenient, lazy way of getting around that it seems not to require much in the way of plans or of packing. To choose between the morning train at 8.13 and the afternoon train at 3.57 required decision, to catch the train required forethought; while nowadays,if at 10 A. M. it seems casually advisable to go to Jonesport, all that is necessary is to wait for the hourly interurban car to pass the door. It has been proved repeatedly that these elements of convenient access and frequent service are more of an attraction than the lower rate of fare, although in some localities where local railroad rates had been high, the considerable reductions made by the electric roads have seemed to the community to constitute a bargain in transportation, so that people traveled frequently and perhaps needlessly, through a feeling that they were saving money. Fares on the interurban lines are seldom in excess of two cents a mile, and usually amount to about a cent and a half, for round trip tickets, where local railroad rates ranged, before the opening of the competition, from two and a half to four cents a mile.

The steam railroads vary greatly in their attitude toward electric competition, but it has been almost the uniform experience of railroad managers, East and West, that rate cuts to meet electric competition are quite futile. Electric transportation handles traffic in small units. The power house is the locomotive, and it can haul ten single cars as easily as it can a train of ten cars coupled together, —more easily, in fact. But in steam service, to reverse the figure of speech, each transportation unit must have its own power house. Disregarding technical refinements, it may be said that it would cost a steam railroad five times as much to run an hourly, single-car train during a fifteen-hour day as it would to run three five-car trains. That is the primary reason on the side of absolute cost which makes it impossible for a steam road to compete with an electric road for light shorthaul traffic.

But the peculiar difference in the legal status of the two kinds of transportation gives the electric roads an advantage far greater. The charter of a steam railroad requires private right of way, fenced in, with a problem to be met in the ultimate disposition of every town or city grade crossing. The electric road buys, begs, or steals a franchise which permits it to run on the side of the highway, except where it better suits its convenience to go across lots, and then by a sort of Jekyll and Hyde transformation, the car that just now dashed across the country in the guise of a locomotive, proceeds sleepily down the main street in the character of a street car. No steam railroad can build a terminal to compete with service of this character, in the inducements it offers to a public which is willing to travel, but does not have to.

What, then, should be the attitude of a steam road toward its electric competitors ? The best opinion seems to be that it should leave them alone, so far as direct competition is concerned. The traveling habit that the electric roads further does not confine itself to their own lines, and the steam roads find that their alert rivals are coming more and more to act as feeders for long-haul business, which is the natural and profitable traffic of a steam railroad. The interurban car which collects passengers in country hamlets, and marshals them at the larger stations of the steam railroad, performs a service similar to that of a local car line within a city. An officer of one of the large Eastern railroads much subject to the competition of electric roads estimates that although his company loses about sixty-five per cent of its local short-haul business as soon as the interurban competition becomes active, the lost earnings all come back again in the form of new through business. This statement, however, applies only to main line competition; the effect of an electric parallel on a branch line must be considered separately.

The passenger earnings and economic services of a branch line arise in part from short-haul local business originating and terminating on the branch, and in part from the services of the branch as a feeder for the main line. The interurban line is certain to take the short-haul business, or at least the profit of it, and itself performs the other part of the work, that of a main line feeder. Hence much of the most bitter competition has been in branch line territory, as, for example, along the shore of Lake Ontario, east of Rochester, where the Rome, Watertown & Ogdensburg branch of the New York Central has made an ineffectual effort to keep its passenger business away from the Rochester & Sodus Bay electric line, within the forty-mile competitive radius. The steam road runs from half to three quarters of a mile from the centre of the towns along the route; the electric road uses the highway for the greater part of the distance, and runs down the main streets. The cars have a baggage compartment, and make a special feature of delivering the trunks of commercial travelers at the doors of the local hotels, saving the cost of transfer, and although the electric road charges slightly higher fares than the steam road, it gets probably ninety per cent of the business.

The only apparent way for steam railroads to manage electric competition is through control, or partial control, of the territory. The New York, New Haven & Hartford, with a local business unique in its importance when the extent of the system is considered, has done some pioneer work in this direction, working in general to secure links which will prevent the welding together of the diversified electric lines in New England into competing parallels. Electrification of portions of the steam roadbed has also been tried on the New Haven road, and is just now being quite extensively experimented with in England, where it might almost be said that all the passenger traffic is local, in view of its controlling importance. The line of the Mersey Company, converted from steam to electric traction last May, was the first instance of this in Great Britain; on September 27 last, the first electric train was run over one of the Newcastle lines of the North Eastern, and electrification of the Lancashire & Yorkshire between Liverpool and Southport is now in progress.

But although transportation can be economically conducted in small units, on an electrified steam railroad, the tremendous advantage possessed by electric roads through their terminal facilities in the city streets is not affected, and still leaves the interurban roads in a competitive position which is almost unassailable. The alternative method of setting a rogue to catch a rogue, and building independent electric lines where needed to take care of competitors in the same field, and to act as main line feeders at the same time, seems more promising. Such lines, besides building up the territory, bringing business to the steam railroad, and constituting a defense, should be able, in most cases, to take care of themselves and earn an independent profit.

The freight and express business done by interurban roads has been a separate growth, starting somewhat later than the passenger business. There is still a wide divergence of opinion among electric railroad managers as to the expediency of trying to develop anything more than a limited package service. The Rochester & Sodus Bay road maintains a regular freight service, handling such bulky articles as coal and lumber in five-car trains, and believes in it, while the Detroit United lines, aggregating some three hundred miles of interurban trackage, hold the opposite view, and take only a slight interest in light package business, refusing to haul heavy freight at all. The most rational point of view is probably that expressed by the president of the Detroit, Ypsilanti, Ann Arbor & Jackson road, who believes that interurban lines have a useful and legitimate field in collecting and delivering all kinds of package freight, and even garden truck and milk, in the rural districts, but that freight business ceases to be profitable to an electric road as soon as it begins in any way to retard or interfere with passenger traffic. Even apart from the matter of interference with the steady business of the road, a trolley line is as ill adapted to move freight trains in large units as a steam railroad is for handling light local passenger traffic in small units. But certain electric roads, such as the Hudson Valley, running north from Troy, the Cleveland lines, and others, have been very aggressive in their package freight business, running express cars several times daily, and instituting a system of free collection and delivery in wagons. Here again, by the combined elements of low rate, frequent service, and flexibility in the place and manner of collection and delivery, the electric roads have in many cases been able to secure almost the entire business of a locality, and to build up noteworthy increases in it as well.

The aggressiveness of electric railroad managers in solving new problems rapidly, without precedents to guide them, has led to great divergences in the practice of different localities, and to certain “freak ” developments. The term is used in the naturalistic sense, and not as implying ridicule, for while some of the efforts have doubtless been ill considered, others are valuable pioneer work in the field of experimentation. Among such developments, besides the electric freight trains in northern New York state may be mentioned the sleeping-car service out of Indianapolis, and the fast specials from Detroit. Sleeping-cars have been ordered at Indianapolis, to be run over the electric roads to Columbus, 181 miles away, on the theory that they will secure traffic by offering to passengers a full night’s sleep between these points, and relative freedom from noise and dirt. The company believes, perhaps rightly, that it has thus solved the problem of how to travel comfortably between cities too far apart to permit a business man to take time for the journey by day, and yet so near together that the passenger traveling in the sleeping-car on a steam railroad must either go to bed very late or get up very early. The electric cars will take all night for the trip, and there will be no cinders to drift in at open windows, in the summer time.

The Detroit specials are interesting as an experiment in high speed along the highway, where there is no protection against stray dogs or cattle on the track, and no safeguarding of grade crossings. Between Detroit and Port Huron, seventy-four miles, two specials run daily in each direction, stopping at only six intervening points, and making the distance in two hours and thirtyseven minutes. The average running time of these specials is thus nearly thirty miles an hour; accommodation trains on the New Haven road between New York and New Haven take practically the same time in running an identical distance. A similar service is maintained to Flint, sixty-eight miles, in two hours and a half. On portions of the run, between stops, the cars reach a speed of upwards of forty miles an hour. Rates on the specials are somewhat lower than by the steam railroad ; the service is popular, and has been free from accidents, although the speed is fully as great as that of most express trains of a few decades ago.

Perhaps the most serious difficulty which now confronts the interurban roads of the country is the prevalent over-capitalization. In view of the rapid gains in traffic following every move in extension, inflation has been easy, and new business has for the time covered up unsound financial methods. In Massachusetts, where the railroad commission has full powers, and has done excellent work for a number of years, the capitalization of these properties is restricted to what the commission calls the fair value of replacement, and now stands at $48,621, stock and funded debt outstanding, per mile of line. This figure is illuminating when compared with the average capitalization of all the street railroads in the country, which was $128,881 per mile, for the year ending June 30, 1902, according to the report of the Census Bureau. The subject is a broad one, and discussion of it does not properly belong in an article on the competitive conditions existing between steam and electric roads, except in so far as the stability of the latter is threatened by the inflation. But it is probably a safe statement that at least half of the total average capitalization of the electric railroads of the country at the present time represents nothing more than promoters ’ profits. The roadbed and equipment of these properties are still new, so that there is strong likelihood that the necessity of making a considerable number of simultaneous renewals will sooner or later arise. The allowances out of earnings for maintenance and depreciation have undoubtedly been too small; net earnings have been kept as large as possible, and it is to be feared that nothing short of extraordinary traffic gains and unusually careful management, during the next four or five years, will keep many electric properties from urgent need of new capital at a time when it will be exceedingly hard to find.

The interurban roads have grave problems to face. They are likely soon to feel the restraint of the complex legislation, both wise and unwise, which hedges about the steam roads; they are certain to undergo a period of foreclosure and reorganization during the next decade. But it seems wholly logical to expect that at the termination of readjustments, and after extensive development of the field and methods of electric transportation, which is still in an elementary stage, they will become the natural and profitable short-haul passenger carriers of the country.

Ray Morris.