Now that I see we are talking about politics again, I can’t stay away from the forum any longer.
Anyway, the political question I have for discussion is: was the Granger political movement harmful for railroads and was it largely responsible for the duplicative main lines in Wisconsin and Iowa?
Admittedly, I do not know as much about this hot political topic as I would like, but that is why you ask questions.
I find it hard to believe that the industry put all of those redundant lines in granger territory own its own. Was there political coercion for this to happen? If so how?
I am thinking more had to do with the agricultural nature of the state, and not as much political tinkering. Competing for grain haulage, connecting the rural towns, and the establishement of the major Trunk lines (such as CNW, Rock Island, CGW, the Q, MILW, IC, and in a lesser degree the Louie) were as good a reason as any to build. Many of those lines were purchased from smaller operations and built into the large systems we saw in the 60’s.
Since not being the expert, it is hard for me to give examples. Most of what I learned was from a chap here in Iowa, who can talk to specifics better than I can hope.
Iowa is still interesting with it’s branch lines, most of which are property of UP. When UP took on the CNW, it was thought widespread abandonments were in store. Yet that has been far from the case, as many such as the old Rock Island Rake branch have been modernized a segment to 49 mph (Bow and Arrow territory).
I don’t know about the other states, but in Wisconsin there were a lot of grainger lines that were the result of the state being a big agricultural and industrial powerhouse in the economy a long time ago. I think there was a lot of competition back then between the railroads. Today, the state isn’t as focused on this and as a result a lot of it was abandoned and scrapped. I don’t know that politics played as a big a role as good 'ol fashion competition.
Could you expand on this angle? I would have thought the Granger movement would have been a disincentive to rural railroad construction. The question as posed seems to suggest that the Granger movement may have provided incentive to build more railroads “out in the boonies”, thus contributing to overbuilding in a limited market.
Mr. Gabe, your questions don’t easily resolve to bullet points. The book that will answer your questions is “Railroads and the Granger Laws,” by George Hall Milner. I picked up my copy in a used bookstore in Washington, D.C., for $6.
The Granger Movement if it could be characterized so simply sought to impose government regulation of railway rates on a strict mileage basis, to encourage construction to areas not yet served, and to accrete economic power to the producer instead of the middleman or consumer. None of these programs could be resolved with each other or within each other; for instance, the farmer shipping from a competitively served community was quite happy with his low rates whereas the farmer shipping from a non-competitive community was unhappy with his high rates. Farmers in areas not yet well-served by railways sought to encourage construction (and thus throw off all regulation in order to not restrict capital) whereas farmers in areas well-served were either neutral on the subject or wanted to restrict capital. The mileage-basis of rates was totally unworkable because transportation costs are not linear with mileage due to initial and final terminal charges, and contemplated the world as a smooth billiard ball where all railway lines had equal costs, and regulators never did figure out a way to equitably solve those problems. Farmers in rich-soil regions saw no need to equalize rates on a mileage basis with their competitors in poor-soil regions, either.
Much of the main-line construction to which you refer occurred prior to the Granger Movement’s zenith in the mid-1870s. In any case the Granger Movement was wholly unsuccessful in regulating railways or encouraging construction (it may have discouraged or delayed some construction) because it operated on a state level and the state regulations that were passed were inadequate to the task. Railway regulation at a national level meant almost nothing until it was given the enforcement power of the Elkins Act of 19
This is from the great transportation economist George W. Hilton.
The various railroad companies kept trying to organize themselves in to cartels. While a monopoly uses too few resources, a cartel uses too many resources.
We never did need seven rail routes between Chicago and Omaha, but by building one you could gain membership in the cartel and be guranteed a slice of the pie. So they got built. (too many resources used to move the freight.)
Once they were built they had a “share” of the through traffic. But any local traffic they could develop was theirs. So, in addition to redundant main lines, we got redundant branch lines that reached into small town after small town. (more waste of economic resources.)
The cartels never worked. People cheat. (Read “Freakonomics” by Levitt and Dubner.)
Eventually, a cartel member would “feel” the need for more money and begin offering lower rates to get more business. This broke the cartel and chaos reigned.
Eventually, they’d try to reorganize the cartel and, eventually, it would fall appart again.
Meanwhile, all these redundant railroad lines were built.
Then the Granger Movement showed up. As we have seen from "a cou
Welcome back. Who said we’re talking about politics again? My policy still stands, altough your topic is of a historical nature so I’ll let it go (unless someone decides to drag this to modern politics or bashing of one party or the other).
This is from the great transportation economist George W. Hilton.
The various railroad companies kept trying to organize themselves in to cartels. While a monopoly uses too few resources, a cartel uses too many resources.
We never did need seven rail routes between Chicago and Omaha, but by building one you could gain membership in the cartel and be guranteed a slice of the pie. So they got built. (too many resources used to move the freight.)
Once they were built they had a “share” of the through traffic. But any local traffic they could develop was theirs. So, in addition to redundant main lines, we got redundant branch lines that reached into small town after small town. (more waste of economic resources.)
The cartels never worked. People cheat. (Read “Freakonomics” by Levitt and Dubner.)
Eventually, a cartel member would “feel” the need for more money and begin offering lower rates to get more business. This broke the cartel and chaos reigned.
Eventually, they’d try to reorganize the cartel and, eventually, it would fall appart again.
Meanwhile, all these redundant railroad lines were built.