The Freeman 1972 - The Ludwig von Mises Institute

756 THE FREEMAN Decembertion on currently topical studies,he said, "results in isolating thestudent from the great inheritanceof the past; the frequent habit ofdragging him through the slumsof sociology, instead of makinghim at home in the society of thenoble dead, debauches his mindwith a flabby, or inflames it witha fanatic, humanitarianism. Hecomes out of college ... a nouveauintellectual, bearing the same relationto the man of genuine educationas the nouveau riche to theman of inherited manners."More, of course, had not heardabout "relevance." But he knewall about cant, and he had theanswer to the Sixties way back in1915.ENTERPRISE DENIED: Originsof the Decline of American Railroads,1897-1917 by Albro Martin(New York: Columbia UniversityPress, 1971, $10.95, 402 pp.)Reviewed by Joseph M. CanfieldAMERICA grew at a phenomenalrate during the first decade of thetwentieth century, and the railroadstried to expand to meet thechallenge. This era producedPennsylvania Station and GrandCentral Terminal in New Yorkand Union Station in Washington,conspicuous evidence of the desireof the railroads for expansion.Railroad buffs can show, fromtheir own photo collections, orfrom the pages of a plethora ofpublished railroad histories, dramaticevidence of the increase insize and power of locomotives inthis period. But rolling stock iseasy to acquire, even when capitalf or fixed way and structures isdifficult to obtain. President Elliottof the Northern Pacific Railwayobserved, in 1907, that theroads were "attempting to force athree inch stream through a oneinch nozzle." The congestion ofthe railroads was a harbinger ofthings to come.The warning sounded by Elliottand other railroad leaders wasn'theeded. Martin declares, and demonstrateshis point statistically,that the capital needed for expansionof the railroad plant was far,far short of what was needed tocope with expanding -traffic. Histable shows that the growth 'capitalavailable in certain years, beforeWorld War I, came to aslittle as a fourth of the amountactually required to handle thetraffic being thrust upon the railroads.In those "Golden Years" theprice index rose rapidly. Everythingthat the railroads boughtcost more. Labor demanded-andreceived - substantial -wage increases~.But under the regulatoryphilosophy prevailing, the railroadswere not permitted to raiserates at all.