Competition in Transportation

March 27, 1931

Report Outline
Competition in Transportation
The Decline in Railway Traffic
Growth of Automotive Traffic
Development of Waterway Traffic
The Progress of Civil Aeronautics
Pipe-Line and Hydroelectric Development
Need of a National Transportation Policy
Special Focus

Competition in Transportation

Reductions in dividend rates during the first quarter of 1931 by leading railway systems whose stocks are widely distributed have brought sharply to public attention the effects of eighteen months of declining revenues upon the financial condition of American railroads. The temporary effects of the general business depression have tended, however, to obscure the more permanent effects of the “new competition” which has developed during the last decade and is now held in some quarters to threaten the preeminence of the railroads in the field of transportation.

During recent years the railroads have had to face intensified competition from several quarters. The automobile and motor truck have made heavy inroads upon railway passenger and freight traffic. Inland waterways have entered a period of renaissance, aided by large governmental appropriations for rivers and canals and by direct subsidies to the government-owned barge line on the Mississippi and Warrior rivers. Pipe line systems are growing in extent. The production of electricity at the mine mouth and waterfall and its extensive transmission by high-power lines is displacing steam-generated power and the movement of coal by rail. And the airways have also entered the field.

The Raieroads and the New Competition

These changes in the competitive aspects of modern transportation have led to charges of unfair competition and to demands by the railroads for legislation assuring them equality of opportunity in the field. On November 20, 1930, the Association of Railway Executives issued a “declaration of policy” in which, among other things, they recommended regulation of competing transportation service by water and on the highways. They have served notice that they will seek legislation in the 72d Congress to extend the jurisdiction of the Interstate Commerce Commission to coastal steamship lines; amendment of the Panama Canal Act to enable railroads to operate steamship lines coastally and on the Great Lakes; extension to the railroads of the right to operate trucks and buses; and legislation giving the Interstate Commerce Commission full regulation of pipe lines and divesting pipe lines from oil company control. Meanwhile, the Interstate Commerce Commission has been holding nationwide hearings on the coördination of rail and motor transportation with a view to developing a national transportation policy.

ISSUE TRACKER for Related Reports
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