Rember Ernie Pyle. Yes, I remember him from the news papers. And my Dad thought highly of him. My dad had worked for the MOPAC and in '43 was relacated from Milwaukee to Cincinnati. In '47, they told him he was being relocated again and he said NO. quit & went to work as a rate clerk for a truck line. Didn’t want to take us out of school. He was an ICC practitioner so I had some understanding of tarriffs.
No!
How could a truck line possibly “prove” that a route was not adequately served by rail? What’s “adequate” anyway? And if a “route” had say, 10 customers, five of them might be “adequately” served and the other five “inadequately” served. Customers’ needs do vary. So then what?
And, to an Atlantic Central post, there is absolutely no possible way for the stupid government economic planners to determine the “right” amount of competition and prevent “too much” or “too little”.
Carolina Freight Carriers, which was a well run company, started in 1932. In 1932 there was no Federal regulation of motor freight. None. The Feds got involved in 1935 and trucking companies got to maintain the services they then offered. There was, and is, absolutely no valid economic reason to economically regulate motor freight.
The truckers sought regulation. And they fought deregulation. That ought to make us suspicious. Anytime an industry actually seeks to be economically regulated something strange is going on. The truckers (and their union labor) wanted protection from competition. This protection was, naturally, contrary to the interests of the American economy and the American people, but it did protect the companies/union from competition. There’s a name for this: It’s called “Predatory Regulation.” It’s meant to protect the industry by harming consumers. Governments are far too often eager to do it because it gives them added power.
In the end most motor freight users found a way around the regulatory system. By 1980 70% of motor freight was moved in a
Fews things in life happen for absolutely no reason. For instance you might have past precedents of corrupt or abusive business practices that regulation was designed to limit (or in some really corrupt instances, promote). Not sayimng that i am a big fan of regulation, just that in some instances it serves a better purpose than “let the advantaged prey”
I found greyhounds’ comment that no trucking regulations existed before the New Deal to be thought-provoking. Doubtless this was because of Coolidge-Hoover laissez-faire, but also because of the condition of most highways before 1933 and the relatively new invention of the long-haul truck.
But perhaps the main reason the New Deal began to regulate interstate trucking was that at the depths of the Depression (1932-1933) the idea of dividing up the exisiting work in an industry to give all players a share of the market was not yet discredited, at least by today’s standards. After all, a big part of the National Recovery Act (later ruled unconstitutional in part by a very conservative Supreme Court as one of the decisions that encouraged FDR to “stuff” the Court in 1937) was based on the principle of dividing up the work to keep businesses, especially small businesses (like new truck companies) in business. As for the unions, of course they would favor such an arrangement because it was the other side of the same coin: to keep workers working.
Our views today of this 1930’s idea and arrangement on the part of the federal government, the industry, and its unions often overlooks why the whole thing came about in the first place. It didn’t just happen. It was a well-intentioned response to economic Depression and massive, government-threatening unemployment. FDR never claimed to have all the answers. His idea was to try something. If it worked, fine; if it didn’t, then try something else. But above all, try something, and not just blindly keep following
Please read and understand what I wrote. I agree that there is some cause/reason for just about everything. And, in many cases it may be a very bad reason.
I did not say there was no reason. I said: “There was, and is, absolutely no valid economic reason to economically regulate motor freight.” And there isn’t.
Two main “reasons” motor freight regulation came about were:
- FDR was illiterate with regards to economics and commerce. His administration prolonged and aggravated the economic downturn. They thought price regulation of everything and restricted competition would produce economic growth. They were wrong.
Hell Fire, they even tried to regulate the price of chickens. For some reason some people want to buy live chickens to take home for slaughter, plucking, preparation, and cooking. Yuk! I grew up in a very small town and we’d raise our own chickens from time to time. In such cases it fell to me as a young boy to catch the chickens one by one and hold them as their heads were severed. Then the headless chicken would run around “like a chicken with its head cut off” literally spewing chicken blood all over. When the finally lifeless chicken bodies were taken in to the house they were plucked/cleaned using boiling hot water. My God,
Regarding my earlier post and the comments that have followed.
I never said regulation was a good idea, I was simply giving a short answer as to the “theory” of the issue of territories as raised by C&O.
Yes, in 1935 the motor carriers willingly accepted regulation. Lets face it, right or wrong, at that time there was a lot of “socialist” thinking by many that the current problems could be fixed and avoided by more government - even among some business men.
And, while they may have served some good purposes early on, carried to the extreems of the 40’s and 50’s, what is a union but an extension of socialist ideas. Pay everyone the same no matter if they work hard or not? Bully people into joining, bully companies into contracts that ultimately make products too expensive and price people out of jobs? I’m not suggesting workers don’t need some sort of protections, but that scale tipped too far the other way long before it corrected.
But by the 1950’s and very much so by the time my father worked at CAROLINA in the 60’s and 70’s they all knew regulation was bad. They might not have been fully prepared to adapt to deregulation, but they knew it needed to happen.
The depression, no question that FDR’s polices prolonged the recovery. How is restricting business and spending money you don’t have ever a good thing?
Sheldon
[quote user=“greyhounds”]
Convicted One
greyhounds: “There was, and is, absolutely no valid economic reason to economically regulate motor freight.”Fews things in life happen for absolutely no reason. For instance you might have past precedents of corrupt or abusive business practices that regulation was designed to limit (or in some really corrupt instances, promote). Not sayimng that i am a big fan of regulation, just that in some instances it serves a better purpose than “let the advantaged prey”
Please read and understand what I wrote. I agree that there is some cause/reason for just about everything. And, in many cases it may be a very bad reason.
I did not say there was no reason. I said: “There was, and is, absolutely no valid economic reason to economically regulate motor freight.” And there isn’t.
Two main “reasons” motor freight regulation came about were:
- FDR was illiterate with regards to economics and commerce. His administration prolonged and aggravated the economic downturn. They thought price regulation of everything and restricted competition would produce economic growth. They were wrong.
Hell Fire, they even tried to regulate the price of chickens. For some reason some people want to buy live chickens to take home for slaughter, plucking, preparation, and cooking. Yuk! I grew up in a very small town and we’d raise our own chickens from time to time. In such cases it fell to me as a young boy to catch the chickens one by one and hold them as their heads were severed. Then the headless chicken would run around "l
My thoughts were geared more towards the reality that not everyone is honest, not everyone wishes to play fair, and not everyone gives a d*** about serving the greater common good. Unfortunately all too often you have well-funded scoundrels more than happy to pillage the system for their own selfish purposes.
By creating a set of rules by which ALL parties are expected to operate, you then have a means to prosecute, to iradicate what’s rotten in Denmark. Again I’m not trying to be a beacon of pro regulation, I’m just saying that i understand why it is sometimes better than no regulation.
How exactly does that work? In the free market:
Companies that charge too much go out of business.
Companies that charge too little go out of business.
Companies that provide poor service go out of business.
With complex regulation there is way more oppertunity to lie, cheat, steal, minipulate, buy priviledge, suppress competition, etc.
When the government has favors to sell, someone will be willing to pay for them…
“the government that governs least governs best”
Sheldon
And now the scale has tipped too far the other way, with the rise off “right-to-work” (for less) laws and other such nonsense. Today we are having to fight to keep those hard-won gains from years past.
Don’t get me wrong, outdated contracts and union attitudes caused a lot of problems (notably in the railway industry through the 60s and 70s), but there is still a place for unions today, even with their problems. I work in a closed-shop setting for a company that is highly profitable (and would be even if they manned up and obeyed our contract to the letter instead of violating it at every turn).
Sidenote: in Canada closed shops are legal, in the U.S. they are not (Taft-Hartley Act, 1947). The issue has been to the Supreme Court in Canada, and it was decided that anyone working in a unionized environment benefits equally from the union representation, therefore they are required to pay dues regardless of whether they choose to be a member of the union or not (the union also has to represent them equally). This required financial contribution (certain conscientious objectors may pay their dues to a registered charity instead) has also been deemed to not be a violation of the freedom-of-association/freedom-to-not-associate principle in the Charter of Rights and Freedoms.
Some regulation is necessary, environmental pollution and product safety laws come to mind. Recall that it was Nixon (a free-market republican) who signed the original Clean Air Act into law, and that car manufacturers did not care much about safety until after Unsafe at Any Speed was written. Service equality comes into mind too, even though they lasted far too long and nearly caused the death of the railroad industry in the 1970s there were legitimate reasons for the creation of the Elkins and Hepburn Acts (railroad regulation and the ICC) back before the First World War.
Also in setting wages and working conditions there are two sides: Owners (shareholders) and workers. In large businesses the owners most often do not have time to run the business themselves, so they hire managers to do it for them. Likewise in a unionized environment the workers choose (elect) representatives to do the negotiating for them.
So there we have it: Owners represented by management, workers represented by unions. Therefore unions are a part of the free market.
The reason for economic regulation was to the benefit of existing carriers verses entrpreneurial people, safety, and the shipping public. Prior to 1980 one couldn’t start a trucking business without a hard to get “operating authority” Usually the applicant had to prove a need that wasn’t currently being met in the marketplace, and established carriers had the opportunity to oppose the application. Often the applicant needed to grease/pay off someone under the table in order to get into the game (some politicians got rich that way)… or better yet… the applicant had a friend in organized crime that could get the application fast tracked. Regulations were in place to protect the establishment from high energy people with ambition who would be happy to compete based on supply and demand.
Granted the system prior to 1980 worked well if you were lazy and not terribly bright. Anyone with an operating authority couldn’t help but make money, so what if the service was lousy. Buy an old truck and hire someone…anyone… didn’t really matter if he could drive or not because you could have 49 driver’s licences…i.e if your WI licence expired then yo
Wow…what an eye opening posting. Way to go!
One of the main reasons so many trucker fought deregulation: For many of the companies, a very large proportion of their capital assets consisted of their operating rights. With deregulation, many of the smaller companies became wildly over-capitalized with a stroke of a pen.
I’m not so sure we appreciate the Teamster’s grip on the industry either - for better or worse, a guy who started loading trailers at age 18 and started driving at age 21 could retire at age 48 with a $39,000 a year pension and lifetime health benefits in early 1990’s when I was last conversant with the details. Unlike the railroads, it was (then) difficult to cut down on “crew size” for a semi. [^o)]
By going to driverless trucks? I don’t think you are suggesting that there were more than one driver per truck. Or did the teamsters prohibit multitrailer operation? A lot of trucking used to be LTL, (Less Truck Load) similar to REA but using trucks between terminals. Truck load shipments were the cream and fought for. I don’t recall any trucks having “featherbeding” agreements. Or were there onerous milage pay clauses?
Right - it looks as if driverless trucks are on the horizon (at least to a degree)
Of course, you could not replace the single driver (as the railroads did with firemen and brakemen.
In the Eastern US, the Teamster road-haul drivers did make extra for pulling twin 45/48 trailer on the IN/OH/NY/MA turnpikes, but the real money was in the 15 minutes of pay for dropping or hooking up a trailer. We had a senior driver that was pulling down over $100,000 a year in the late 1980 - he’d pull two trailers out to the “pike” from our Syracuse terminal, take them to Utica, NY, drop one, pick up one, then to Albany, NY, drop the other, hook another, drop both at Springfield, MA, and reverse the process on the way home.
Of course I might agree that trying to link up “a road train” in a good lake-effect snowstorm on a zero degree night might have justified the pay. [:-^]
There was some degree of featherbedding - probably the most onerous was the prohibition of using road men to drop trailerloads within the local terminal zone - if we brought in a trailerload destined one block out of his direct route into the terminal, the road man had to take it into the terminal and we had to bring in a local P&D driver to take to trailer to the customer. If a road man came into the terminal, he punched a time clock and parked his/her rump in the break room (on the clock) while we had to take a local man off the dock to drop the inbound trailer, hook the outbound trailer, and fuel the tractor. All that’s long gone…
I assumed that the regulation of Trucking was forced on the trucking industry by the railroads to make them pay there “fair share” I guess I was wrong and that the Trucking Industry itself did not too many players on the field at one time. The Taxicab buisness was regulated by the municpilaities that they ran thru to crack down on Jitneys in responce to Streetcar companies complaining that the jitneys were stealing their riders. Now we have gone full circle with Cities embracing Uber who picks up riders on bus lines that have low ridership and do not justfy running a regular schedule. Taxicab Operators are protesting Uber but forgot why they were granted a regultory monopoly in the first place.
Couple thoughts:
There is an old business axiom that states “your most dangerous competitor is the complete fool who will bankrupt himself trying to take business away from you, thinking he is winning”
In your scenario where ‘companies that charge too little go out of business’ How long are legitimate competing operators expected to suffer the fool who is cutting his own throat without even knowing it? I mean, there you are trying to run an honest business, you have loan payments, cost of facilities, equipment, payroll, etc and trying to compete with you is this fool taking all the business he can away from you, but at a loss. How long are you expected to endure this? Long enough that your own creditors call you to the table? What if the guy isn’t a fool afterall, but has sufficiently deep pockets that his plan for success is to starve you out, then own the market…is that fair to the customers in the long run?
Seperately, I for one believe that it is a good thing that carriers of hazardous freight are required to carry higher levels of liability insurance limits than the guys toting groceries. Leaving it to what I guess you would call “market conditions”, anyone hauling hazardous material that is dumb (or dishonest) enough to underinsure who then goes on to incur a substantial casualty loss, ultimately pays for his mistake when he goes bankrupt under the weight of litigation from injured parties suing him? Don’t the innocent deserve pre-emptive protection, or is that the risk they took living in the same world with the defendant?
Quick question: If my cost to produce one bushel of apples is $2, and the market selling price for apples is $5/bushel, but I sell you a bushel of apples for $4, what is my net? Just curious where your head is at on that one.
[quote user=“Convicted One”]
ATLANTIC CENTRAL
How exactly does that work? In the free market:
Couple thoughts:
There is an old business axiom that states “your most dangerous competitor is the complete fool who will bankrupt himself trying to take business away from you, thinking he is winning”
In your scenario where ‘companies that charge too little go out of business’ How long are legitimate competing operators expected to suffer the fool who is cutting his own throat without even knowing it? I mean, there you are trying to run an honest business, you have loan payments, cost of facilities, equipment, payroll, etc and trying to compete with you is this fool taking all the business he can away from you, but at a loss. How long are you expected to endure this? Long enough that your own creditors call you to the table? What if the guy isn’t a fool afterall, but has sufficiently deep pockets that his plan for success is to starve you out, then own the market…is that fair to the customers in the long run?
Seperately, I for one believe that it is a good thing that carriers of hazardous freight are required to carry higher levels of liability insurance than the guys toting groceries. Leaving it to what I guess you would call “market conditions” anyone hauling hazardous material that is dumb (or dishonest) enough to underinsure who then goes on to incur a substantial casualty, ultimately pays for his mistake when he goes bankrupt under the weight of litigation from injured parties suing him? Don’t the innocent deserve pre-emptive protection, or is that the risk they took living in the same world with the defendant?
Quick question: If my cost to produ
I wanted to know what you believe.