President's Message

Among other matters receiving the attention of the Executive Committee of the Association there are two which we would like to particularly call to the attention of our members at this time.

The first concerns the relationship between our individual Chapters and the Association itself. As was the case with my predecessors, I feel strongly that the vigor of our Association is directly proportionate to the strength of the relationship between the Chapters and the national Association. The national Association's Committee to Cooperate with the Chapters this year is comprised of the regional vice presidents, under the chairmanship of Mr. Sam H. Flint of Chicago. We urge the various Chapters to exchange information and ideas with their regional vice presidents with a view to strengthening the ties with the national Association and advancing our mutual objectives. We want here to note that the several efforts now under way to bring into being new chapters to the Association are most encouraging.

The second matter we wish to call to the attention of our members is the fact that in the next session of Congress there will undoubtedly be under active consideration several bills having a definite bearing upon the Interstate Commerce Act and upon Practice and Procedure before the Interstate Commerce Commission. We urge each and every member of the Association to make special individual effort, through the reading of the I. C. C. Practitioners' Journal and through the several other sources available, to familiarize themselves with the nature and details of such key bills. We suggest that the members transmit their views on such legislative proposals to the Chairman of the Committee on Legislation, Mr. Gerald Phelps, of Washington, D. C., or the Chairman of the Special Committee on Administrative Law, Mr. Starr Thomas, of Chicago, as may be appropriate.

The cooperation and the expression of views of the members will always be most welcome.

JOHN F. DONELAN, President

Commissioner Arpaia Wins Top U. S. Prize

at Pan American Railway Congress

Commissioner Anthony F. Arpaia won the top United States award of six hundred dollars for his paper, "The Philosophy of Transportation," presented at the ninth Pan American Railway Congress, held in Buenos Aires from August 30 to September 13, 1957. Mr. Arpaia attended the Congress as a technical adviser. Honorable Owen Clarke, Chairman of the Interstate Commerce Commission, was a member of the delegation from the United States, headed by Mr. William T. Faricy, Chairman of the U. S. National Commission in the Pan American Railway Congress Association. Mr. Faricy is Chairman of the Board and Chief Executive Officer of the Association of American Railroads, with headquarters in Washington, D. C. Mr. Arlon E. Lyon, Executive Secretary-Treasurer of the Railway Labor Executives' Association, of Washington, D. C., was another member of the delegation.

Four other United States men achieved recognition for the best technical papers presented to the Railway Congress. An Argentine prize for a work entitled "Training and Selection of Railway Personnel" was presented to Mr. Howard E. Simpson, of Baltimore, Maryland, President of the Baltimore and Ohio Railroad Company. In the field of railroad operations, the first Argentine prize went to Mr. J. M. Finch, of New Haven, Connecticut, for his paper on "Arrangement and Control in Yard Operation." Mr. Finch is Superintendent of Car Service of the New Haven Railroad. In the equipment and power classification, Mr. Lloyd J. Kiernan, of Washington, D. C., won the first Argentine prize for his contribution on "Application of Modern Scientific Research on Railroads of the United States." Mr. Kiernan formerly held the position of Executive Vice President of the Boston and Maine Railroad. A United States award was presented to Mr. A. J. Greenough, of Philadelphia, Pennsylvania, who is Vice President of Transportation and Maintenance of the Pennsylvania Railroad. His paper dealt with the "Reduction of Terminal Delays in Train Operation.

In addition to Mr. Arpaia, others in attendance at the Railway Congress as advisers were:

Two Department of Commerce officials, Dr. Herbert Ashton, Director of Transportation and Utilities Division of the Bureau of Foreign Commerce, and Kenneth N. Hynes, of the American Republics Division of the same bureau; Albert R. Beatty, Assistant Vice President of the Association of American Railroads, and George E. Stewart, of the United States Army Transportation Corps.

The tenth Pan American Railway Congress, according to Mr. Faricy, will be held in Brazil in 1960.

The prize-winning paper, "Philosophy of Transportation," as presented by Commissioner Arpaia, begins on the next page. It deals with the importance of coordinated transportation as an element of the world's sound economy. He was notified of the cash award upon his return to the United States.

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The Philosophy of Transportation

BY HONORABLE ANTHONY ARPAIA

Member, Interstate Commerce Commission

Much has been written and said about the mechanics and technology of railroads. However, there is a philosophic side to transportation and it is to this phase that I would direct some attention.

"So that if these three wheels go, wealth will flow as in a spring tide. And it cometh many times to pass *** that the work, and carriage, is worth more than the material, and enricheth a state more.' These are not the words of a transportation expert, an economist, or a business analyst. Neither were they said within recent history. They are the words of a philosopher of the 16th century.

More than two hundred years before the first steam locomotive, Sir Francis Bacon, in one of his essays, named three things of economic importance to a nation: commodities in their natural state, manufacture, and carriage-that is, transportation. It is to be noted that Bacon considered transportation of greater importance than raw materials. Experience has demonstrated that the three important basic elements of sound economy are industry, agriculture and transportation.

Transportation is as important to the body politic as the circulatory system is to the human body. The complex of bone, muscle and brain is ineffectual and useless without the nourishment which is furnished to them by the flow of blood through the veins and arteries of the human body. Similarly, however rich a nation may be in resources and manpower, these have little value until they are given utility through the medium of transportation.

To the extent that transportation is inadequate, inefficient and restricted, economic and social growth is impeded. Contrariwise, to maintain a vigorous, healthy and growing body politic, there must be transportation of the type and amount sufficient to supply and nourish every segment and member of that body. Social, cultural and economic expansion and progress is directly related to the ability to move goods and people about.

If all transportation is regarded as the circulatory system of the body politic, then, assuredly, railroads constitute the main arteries. Without railroads, the world we know today could not have existed. They have made the largest single contribution to economic health. The present pace of social development and material progress was made possible by fast overland mass transport by rail. Railroads have made cheap transportation available to immense inland regions of the world and are still the predominant influence of our present day civilization. In many areas the railroad serves as the only medium of surface transport where distance is a factor.

Technical paper presented to the Ninth Pan American Railway Congress, Buenos Aires, September 1957.

As the cost of the transportation was reduced, more markets were created, more articles began to flow in commerce, more employment was created, more areas prospered and more comforts were provided for more people. It is mass transportation which makes available to a community many commodities which must necessarily be produced in some other region-in many instances, remote from a major consuming point. People accept as a matter of course the necessities and comforts which would either not be available or would only be available at prohibitive prices if it were not for the existence of such mass transportation.

Market prices are also stabilized through readily available transportation. A local over-supply of a product can be shipped to an area which is under-supplied-thereby avoiding the depression of prices locally which would naturally follow from an over-supply. Transportation greatly enlarges the market areas of many commodities which are produced in remote regions. And it also increases the utility and value of land which might otherwise remain fallow and worthless. The experience of any country affords many examples of this fact of economic life.

Rail transportation, by making feasible the mass movement of goods over great distances at reasonable rates, reduces the prices of goods because, after all, the cost of transportation must be realistically regarded as an element in the cost of production. Its influence on price begins with the raw materials and continues through every stage of processing until the delivery of the finished product to the consumer.

The medium of transportation also permits geographical divisions of labor. Such divisions of labor come about when areas tend to specialize in production of particular commodities, such as is now under development in South America in the operation of steel mills, production of manufactured products and new automobiles. Such specialization could not exist unless mass transportation made it possible for these areas to obtain their inbound raw materials, sometimes at long distances, and to ship their outbound products to ever expanding markets.

A country gains greatly from geographical division of labor because it can obtain a greater output at less expenditure of capital and labor by allowing localities to specialize in those products best adapted to their resources and their skills. When an area specializes in a particular product or products, it of course tends to produce more efficiently and this reduces production costs and ultimately the consumers' costs. Such advantages would not be fully realizable if it were not possible to ship in large quantities by rail. Reasonable and related freight rates also permit all producers of competitive products to market their products in a common market and, as the number of competitors is increased, this serves to keep prices down. To sum up, efficient transportation and balanced rates, by making possible the production and availability of more goods at competitive prices, means that the prosperity of a society will not only be increased but will be more evenly distributed among localities and areas.

Just as the truly conditioned athlete conserves his physical resources by eliminating waste motion and loss of energy, unnecessary duplication in transportation, or lack of coordination in transportation facilities,

constitutes an undesirable form of economic waste. This drawback can exist even within the same form of transportation. The multiple terminal facilities, the frequency of interchange, the re-handling and extra shunting of cars to make up trains add to the cost of operation and the delay in service.

Such duplication results in added overhead, inability to develop efficiently, excessive solicitation, handling and other items. The South American countries fortunately do not have to face this as a major problem and can profit by the mistakes elsewhere since there are no duplicating rail lines. It is often more difficult and expensive to rebuild than it is to build.

In transportation, the ideal would be to provide the exact quantity of service for the existing demand. Perfection in this respect is obviously unattainable due to the normal vagaries of our economy. There are bound to be peaks and vales but to deliberately provide an overabundance of transportation is an extravagance to be avoided. Standby facilities and a low utilization factor represent needless investment cost, carrying charges and maintenance.

Except under unusual conditions, railroads form the skeleton of any effective transportation system, because of their ability to operate for long distances under extreme conditions and because they can transport in large volume at less cost. Motor, air, and water carriers are limited in many respects and must necessarily be complementary to the rail framework around which the structure of transportation is built. To the extent these complementary media of transportation are not fully coordinated and integrated as part of a unified service, the full exploitation of the potential economy of a country is hampered and the maximum efficiency of transportation is lost.

What then is the solution in those countries where rail facilities cannot be extended and expanded to give complete transportation coverage, particularly in the light of the present high costs of railroad construction? In essence, it is to build around the skeleton of present railroads, or those to be built, a complementary service by such other means as are found to be appropriate and expedient, whether by motor, water, pipeline or air or other media still to be devised or developed thereby producing a flexibility of service not otherwise obtainable.

To help accomplish this objective, another form of waste, the unnecessary effort and expense caused by duplication of ownership or management of the several forms of transportation should be avoided. These factors tend to increase overall cost to the carrier, which in turn must be passed on to the shipper. The nations of South America can profit in this respect from the history of the development of competitive and auxiliary transport services in the United States. Shippers should have readily available to them a single complete service through one source in order to obtain the type, quantity, and combinations of service most appropriate, convenient and inexpensive for their needs, be they constant or variable.

To serve the nation's needs of developing its resources, providing room for growing population and promoting its standards of life, trans