CHAPTER   VII

Changes in Traffic 1920-1930

There are many factors which influence the success of failure of a railroad company.   In the long run, none of these factors is more important than the traffic the road can and does haul.   When people cease to ask a railroad to perform transportation services, the reason for the railroad’s existence ceases also.

Most of the Class I railroads of the United States in the decade from 1920 to 1930 were rather complacent about their sources of traffic.  Many roads sought to attract a greater volume of business to their rails, but few had any fear that their traffic source would dry up.  The Gulf, Mobile and Northern, however, lived through most of the decade with the constant reminder that its major source of traffic was declining and probably would almost cease at some not-too-distant date.  It may seem paradoxical, but it is probably true, that much of the success of the GM&N can be traced to this very fact.  The constant peril of the GM&N forced it to do the “impossible.”

PASSENGER TRAIN SERVICE

It was not by increasing passenger train traffic that the GM&N set its enviable record for development in its early years.  The Traffic Department employees of the road worked as hard and as intelligently as they knew how, but passenger business showed an almost constant decline for the whole ten-year period. 

Population in the territory along the lines of the GM&N was so thin that the road had little passenger business in comparison with its neighbors.  For example, the Mobile and Ohio had an average of 46 passengers per train mile in the wartime peak of 1920.  The GM&N at the same time had an average of only 34 passengers per train mile.  All the Class roads in the Southern District had an average of 67 passengers per train mile in 1920, and the U.S.  average for Class I roads stood at 80 passengers per train mile.

In spite of the fact that 34 passengers per train mile in 1920 was a very low average, the GM&N was to see progressively lower averages as the decade passed.  The wartime peak of 34 passengers per train mile dropped to 22 in 1921, where it stayed for three years, and then started downward again in 1924.  From that year to 1930 the decline was steady.  The average in 1929 was 14 passengers per train mile.  In 1930 each GM&N passenger train carried an average of 10 paying passengers for each mile it operated, and the depression was just beginning.

Until the fall of 1922 the GM&N was not in a position to reorganize its admittedly bad passenger train service.  In October, a new train schedule which offered through service to Memphis from Mobile was begun.  This service was in conjunction with the St.  Louis-San Francisco, with New Albany, Mississippi, being the connecting point.  In December, Pullman service was instituted on these trains in an effort to offer a superior class of passenger service.  Before a year had elapsed, this Pullman experiment was discontinued because the night trains were taken out of service in favor of daytime schedules. 

When night schedules were resumed, the sleepers went to Jackson, Tennessee, on the GM&N’s own lines and the service between New Albany and Memphis was dropped because the volume of business between Mobile and Memphis was not sufficient to sustain the operation.  The Mobile-to-Jackson run was not particularly profitable, but the road continued the Pullmans on this run during the rest of the decade.  The management felt that the Pullman service was helpful in attracting to the line some shippers who might not otherwise have used it. 

Throughout the ten-year period many changes of schedules were made in an effort to bolster passenger revenues.  “Day” trains were run between Laurel and Louisville, Mississippi, and later to New Albany, so that people could go to the towns on shopping trips and return home the same day.  Excursions and special trains were run to all major events in the territory.  Most, if not all, of the nationally used schemes to attract passenger business were tried by the GM&N. 

There was a brief spurt in passenger train revenues for the year 1923 which put the passenger service in the black for that year.  The last seven years of the decade, however, showed a definite trend downward.  Total passenger revenues did increase in 1927 when service to New Orleans via Jackson, Mississippi, was started in conjunction with the New Orleans Great Northern.  This total increase in revenues did not mean a change from deficits to profits.

FREIGHT SERVICE

The GM&N’s big task from the traffic standpoint was to show a constantly increasing total for its freight tonnage.  This meant that new sources of freight must be found, not only to replace the anticipated decline in timber tonnage, but also to show a net increase in total freight.  The traffic department began to improve its staff of solicitors almost at once.  More people were employed for traffic work along the line and in 1920 the road opened off-line traffic offices in the five big shipping centers of St. Louis, Chicago, Memphis, Detroit, and New Orleans.  Two more of these offices were opened in 1921 at Louisville, Kentucky, and Kansas City, Missouri. 

The road knew that these outside offices would not produce a large increase in business immediately, but a start had to be made toward competition for high-class freight. 

The managers of the Traffic Department were forced to go outside the existing personnel rosters of the company to find men who had the experience, the know-how, and the contacts which a major traffic solicitation office needed. 

In addition to building a full-time force of traffic men, the GM&N worked almost as hard to build its other employees into a part-time sales force.  Everyone who worked for the road was informed that solicitation was the key to growth.  No employee was ignored in the drive to get more traffic.  Stores which sold goods to employees found that they were asked to route their goods over the GM&N.  Passenger train crew members were encouraged to solicit freight from industrialists, merchants, and salesmen who might travel over the GM&N’s lines.   Employees were given credit in the News for outstanding effort in soliciting business for the road. 

All of these measures, coupled with the growth of employee morale, brought much favorable attention to the GM&N and produced a substantial volume of business which the road probably could have obtained in no other way.

The sales effort of the professional solicitors and the other employees would not have been nearly so successful without the backing of an aggressive rate section in the Traffic Department.  This group also had to be enlarged and reoriented.  The men in the rate section in the years that followed were ready and, indeed, eager to meet the needs of potential railroad users with rates and charges that would secure traffic for the GM&N.  If the existing rates were unworkable, new rates were often designed.  One of the most helpful rate adjustments of this type was the creation of in-transit rates for rough lumber.

All timber-hauling roads for many years had used intransit rates for hauling logs to the mill.  The GM&N pioneered, in its area at least, with a rate which would allow small mills to do the rough sawing and then send this material for further processing at central points.  As the timber regions of Mississippi decreased, this maneuver helped keep a number of large mills in operation at important collection centers and thus keep tonnage on the rails instead of trucks. 

One of the aspects of GM&N solicitation which proved most helpful was a somewhat unusual procedure.  The GM&N sought, and rather successfully, to be given complete control of shipments which originated or terminated on its lines.  The shipper was asked not only to let the GM&N haul his merchandise over its lines but to let the GM&N decide which road outside of its territory should handle these shipments.  Where this control was given, the GM&N was in a position to bargain with its northern connections. 

This program to control freight became a major principle in GM&N traffic solicitation in the years after 1920.  It was developed to a high degree of perfection, and its value was to be demonstrated most clearly in 1938 when the GM&N suddenly stopped hauling freight into Paducah, Kentucky.  Even the Interstate Commerce Commission was impressed with the ability of the GM&N to direct the transfer of its through freight.

In order to improve its chances of getting competitive freight, the road in May, 1922, began a fast, scheduled, through freight service.   After this date, the GM&N was in a position to promise delivery by a specified time.  These freight schedules were set to make connection with the principal interchange lines, the two most important to the GM&N being the Frisco at New Albany, Mississippi, and the IC at Jackson, Tennessee.  Both the NC&STL at Jackson, Tennessee, and the Louisville and Nashville at Bells, Tennessee, were important interchange points, but the bulk of the GM&N’s tonnage northbound went to the IC at Jackson in this period prior to 1926.

The GM&N’S traffic solicitation program coupled with its better service and public relations brought results.  In the period 1920-25, the GM&N increased its freight from 1,546,000 tons in 1920 to 2,522,000 tons in 1925.  This was an increase of 63 per cent in the six year period.  (See chart II).  The MN&0 in the same period dropped from 7,199,000 tons in 1920 to 6,824,000 tons in 1925.  Figures for the whole IC system are not comparable to those for the GM&N’s operations, but the IC in 1920 hauled 49,233,000 tons and in 1925 had increased to only 49,566,000 tons, or 100.7 per cent of 1920. 

Along with the increases in tonnage, certain shifts in emphasis were taking place.  Less-than-carload freight dropped from 84,000 tons in 1920, or 4.7 per cent of the yearly total, to 68,000 tons in 1925, which was 2.7 per cent.  The truck apparently was making its competition felt even in this early period. 

Other changes in the major classes of traffic were quite noticeable.  During the six-year period, forest products declined as a percentage of the total from 63.1 per cent in 1920 to 57 per cent in 1925.  At the same time, forest-product tonnage had increased from a total of 975,000 tons in 1920 to 1,448,000 tons in 1925.  Agricultural products in 1920 provided 125,000 tons, which constituted 8.1 per cent of the total.  In 1925, agricultural products had increased to 300,000 tons and made up 11.9 per cent of the total tonnage.  Products of animals, 12,000 tons in 1920, dropped to 9,000 in 1925, and the per cent of total dropped from 0.8 to 0.4.  Manufactures showed both a positive tonnage and a percentage increase.  In 1920, 166,000 tons were classed as manufacturing or miscellaneous, which was 10.7 per cent of total tons hauled.  In 1925 the figures stood at 456,000 tons, or 18.1 per cent of the total.

Other evidences of the changing pattern of traffic tonnage were also apparent in the 1920-25 period.  In 1920 the GM&N originated 71 per cent of all its freight.  In 1925 it originated only 61 per cent, which indicates that much of the added business was coming from interchange connections.  Another index of change is the fact that average haul for 1920 was 140 miles, but by 1924 it had increased to 174 miles.  This average slumped in 1925 to 166, but it went back to 173 in 1926 and kept climbing until traffic conditions changed in 1932, with the inclusion of New Orleans Great Northern mileage in the totals.

The pattern of freight traffic changed sharply with the changes of lines which took place in 1926-27.  Originated business dropped steadily: 58 per cent in 1926; 55 per cent in 1927; and by 1930, 40 per cent.  This last figure obviously was caused in part by the slump in building after the 1929 stock-market collapse, for GM&N tonnage in 1929 was 47.5 per cent originated.  Products of forests dropped from 52.4 per cent in 1926 to 33.8 per cent in 1930.  The actual tonnage also dropped, from 1,337,00 to 932,000.               

Products of mines and manufactures increased actually and in per cent of total in 1930 over 1926.  Fortunately for the GM&N, these two items more than offset the loss in forest products, and total tonnage did not collapse as fast as its former mainstay of lumber and timber however, total tonnage fell from a high of 3,242,000 tons in 1928 to the 2,759,000 figure for 1930 and was to touch a much lower figure in 1932 before improvement began again.

Under the circumstances, it is useless at this point to conjecture what would have happened if the GM&N had not made its connections with the Chicago, Burlington and Quincy at Paducah and the New Orleans Great Northern at Jackson, Mississippi, in 1926-27.  Certainly the GM&N’s forest tonnage would have declined, but the road might somehow have held together on the traffic which would have remained.  At any rate, the changes were made and the road continued its development program after a lapse during the worst of the depression years.