Nostalgia & History > Emergency Meeting of RR Presidents, March 11, 1938

I found this picture in the online Repository of the Library of Congress Prints and Photographs Division. I have never heard of this meeting. Here is the caption:

Railroad executives meet in emergency session. Washington, D.C., March 11. Leading executive of the railroad industry met here today in emergency session to study what they describe as the most critical financial condition in railroad history. During the meeting the executives, all members of the Association of American Railroads, considered a proposed new "National Railway Policy" as a solution to their financial problems. Left to right: (seated) Carl R. Gray, Vice-Chairman, Board of directors, Union Pacific Railroad; J.M. Kurn, Trustee, St. Louis-San Francisco Railway; C.E. Denney, President, Erie Railroad; E.S. French, President, Boston and Main Railroad; E.M. Durham, Jr., Chief Executive Officer, Chicago, Rock Island and Pacific Railway; and Daniel Willard, President, Baltimore and Ohio Railroad. Standing, left to right: S.T. Bledsoe, President, Atchison, Topeka and Santa Fe Railway; George B. Elliott, President, Atlantic Coast Line Railroad; Hale Holden, Chairman, Southern Pacific; M.W. Clement, President, Pennsylvania Railroad; J.B. Hill, President, Louisville and Nashville Railroad; F.E. Williamson, President, Grand Central System; J.J. Pelley, Chairman (ex-officio) Association of Amn. Railroads; E.E. Norris, President, Southern Railway; and J.J. Forster, Sec. and Treas. Assoc. of Amn. Railroads, 3/11/38

Creator(s): Harris & Ewing, photographer

Reproduction Number: LC-DIG-hec-24199


Marty Bernard

---

Most of them don't look to happy. Almost as if they don't trust each other. Ben

ns2557 Wrote:
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> Most of them don't look to happy. Almost as if
> they don't trust each other. Ben


Such a meeting would have to be handled v-e-r-y c-a-r-e-f-u-l-l-y. Could be interpreted as an anti trust violation.

-John

That must have been one outstanding collection of business cars parked at WUS for those meetings.

These folks don't do no stinking anti-trust.

Bob Wilcox
Charlottesville, VA
My Flickr Shots

LarryDoyle Wrote:
-------------------------------------------------------
> ns2557 Wrote:
> --------------------------------------------------
> -----
> > Most of them don't look to happy. Almost as if
> > they don't trust each other. Ben
>
>
> Such a meeting would have to be handled v-e-r-y
> c-a-r-e-f-u-l-l-y. Could be interpreted as an
> anti trust violation.
>
> -John


Since rates were generally dictated by the ICC, I don't see how this could be construed as price-fixing.

Back when the AAR had more than two Class I members.

MartyBernard Wrote:
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> Standing, left to right: S.T. Bledsoe, President, Atchison,
> Topeka and Santa Fe Railway...

For all you hard-core Santa Fe passenger fans, it was Samuel Bledsoe who was most responsible for the streamlined warbonnet passenger trains that would grace the rails for 34 years. Credit him for spending precious capital on a new and visionary train (with help from the CB&Q) that would become a household name. He died almost a year from the day of this photograph on March 8, 1939.

The economy was slowly climbing out from the bottom from 1933 when in 1938 it suddenly collapsed again, much to the despair of the public and the industry who had believe that the worst was over (it actually was; it never got as low as 1933).

It sank in 1937-38 after FDR got "conservative" and pulled back from many of the New Deal Programs and suddenly became insistent on "balancing the budget" after his reelection in 1936.

And so back to the brink the Economy went, in what was known as the "Roosevelt Recession." FDR quickly pulled back from this. But full recovery didn't come until WWII, or rather, the mass production for EUROPE before the U.S. actually entered the War. But quite true, it never got as bad again as it had as when FDR entered office in 1933 (or during the do-nothing Hoover Years).



Edited 1 time(s). Last edit at 10/03/14 23:29 by Red.

> Since rates were generally dictated by the ICC, I
> don't see how this could be construed as
> price-fixing.

That's a valid point. But for clarity, price-fixing is not the only activity prohibited by the Sherman Act, Clayton Act, and Robinson-Patman Act. The existence of the AAR per se is not a violation of any of those. Now if not then, though, I'd expect the AAR general counsel to remind everyone where the lines are drawn. Besides, a lot of those railroad presidents were lawyers themselves.

It's mind boggling to think about the age, experience and what change these guys had seen with railroads. Many were probably born in the 1870s-1880s.

Red Wrote:
-------------------------------------------------------
> It sank in 1938 after FDR got "conservative" and
> pulled back from many of the New Deal Programs and
> suddenly became insistent on "balancing the
> budget" after his reelection in 1936.
>
> And so back to the brink the Economy went, in what
> was known as the "Roosevelt Recession." FDR
> quickly pulled back from this. But full recovery
> didn't come until WWII, or rather, the mass
> production for EUROPE before the U.S. actually
> entered the War. But quite true, it never got as
> bad again as it had as when FDR entered office in
> 1933 (or during the do-nothing Hoover Years).


Now, I thought the "recession" was in 1937, although it may
have continued into early 1938. Note the date of the photo
is March of 1938. Later that year, the European rearmament
had started and that's what effectively ended the Great
Depression.

Nick Tharalson,
Marion, IA

F.E. Williamson, President of the New York Central System, I think. "Grand Central System" might be a Freudian slip.

knotch8 Wrote:
-------------------------------------------------------
> F.E. Williamson, President of the New York Central
> System, I think. "Grand Central System" might be
> a Freudian slip.

And I took careful note of the fact that the L&N's president stood between him and Martin Clement of the Pennsylvania. These men were all used to sitting in AAR and other trade association meetings with each other. Nevertheless, there were rivalries. Trade association officers, for railroads or any other business, are well-practiced in the arts of diplomacy, albeit with a business spin.

A remarkable photo.

MC
Columbia, Missouri

And yet for all the rivalries in the room, they were also a kind of brotherhood. Being head of a Class 1 RR is a fairly exclusive club and over drinks I'll bet they often discussed matters of common interest. Who else woudl understand their jobs, other than the other Class 1 leaders?

Oh, to go back in time, be in the bar and listen to what they were worried about. (I'd tell them to start investing in equipment like there's no tomorrow - there's a BIG war coming...)

Thanks for posting that, Marty. (And I love all the stuff you've been posting over the past many weeks. Please keep it up!)

- Norm



Edited 2 time(s). Last edit at 09/30/14 18:22 by NCA1022.

It sank in 1938 after FDR got "conservative" and
> pulled back from many of the New Deal Programs and
> suddenly became insistent on "balancing the
> budget" after his reelection in 1936.
>
> And so back to the brink the Economy went, in what
> was known as the "Roosevelt Recession." FDR
> quickly pulled back from this.

This is right on the money as far as it goes. Roosevelt's inconsistent economic policies caused a reversal of an anemic economic advance out of the worst of the Depression. That is the immediate reason why these me chose to gather. The more fundamental cause was the overall length and breadth of the Depression, which, if I recall my stats, forced one-third of U.S. railroads into receivership. The railroads were threadbare and needed relief. A consistent economic policy would have been nice, but these men were crowding the room specifically to pressure the ICC for freight rate increases, to lean on the unions for wage concessions, and to press their case for a Special Railroad Reorganization Court to handle bankruptcies.


-E.O.

There is no WiFi in this room.

NCA1022 Wrote:
-------------------------------------------------------
> And yet for all the rivalries in the room, they
> were also a kind of brotherhood. Being head of a
> Class 1 RR is a fairly exclusive club and over
> drinks I'll bet they often discussed matters of
> common interest. Who else woudl understand their
> jobs, other than the other Class 1 leaders?
>
> Oh, to go back in time, be in the bar and listen
> to what they were worried about. (I'd tell them
> to start investing in equipment like there's no
> tomorrow - there's a BIG war coming...)
>
> Thanks for posting that, Marty. (And I love all
> the stuff you've been posting over the past many
> weeks. Please keep it up!)
>
> - Norm

Totally agree on all points. And I add my thanks too, Marty, for the many fine images you've recently posted.

Well, I don't see any holes in the bottom of any of these leather-soled shoes, so these guys were well past the Great Depression era, but then were entering soon to be WWII. Must have been a serious meeting since the cigars box and the large butt-filled ash tray were on the floor, although, it looks like some smaller ash trays with matches and cigarettes do exist on the tables, maybe for those whose nerves might be "on end".

ntharalson Wrote:
-------------------------------------------------------
> Red Wrote:
> --------------------------------------------------
> -----
> > It sank in 1938 after FDR got "conservative"
> and
> > pulled back from many of the New Deal Programs
> and
> > suddenly became insistent on "balancing the
> > budget" after his reelection in 1936.
> >
> > And so back to the brink the Economy went, in
> what
> > was known as the "Roosevelt Recession." FDR
> > quickly pulled back from this. But full
> recovery
> > didn't come until WWII, or rather, the mass
> > production for EUROPE before the U.S. actually
> > entered the War. But quite true, it never got
> as
> > bad again as it had as when FDR entered office
> in
> > 1933 (or during the do-nothing Hoover Years).
>
>
> Now, I thought the "recession" was in 1937,
> although it may
> have continued into early 1938. Note the date of
> the photo
> is March of 1938. Later that year, the European
> rearmament
> had started and that's what effectively ended the
> Great
> Depression.
>
> Nick Tharalson,
> Marion, IA

You're right--the Recession of '37 was called the "Roosevelt Recession" and for the reasons that I specified. Thanks for the correction. It did last into '38, however.