Regulating Railroad Innovation: Business, Technology, and Politics in America, 1840-1920

Published by EH.NET (September 2004)

Steven W. Usselman, Regulating Railroad Innovation: Business, Technology, and Politics in America, 1840-1920. New York: Cambridge University Press, 2002. xv + 398 pp. $70 (hardback), ISBN: 0-521-80636-4; $29.95 (paperback), ISBN: 0-521-00106-4.

Reviewed for EH.NET by Jeff Schramm, Department of History and Political Science, University of Missouri — Rolla.

The railroad was the quintessential industrial technology. It has also been the subject of much economic and historical analysis since the days of the Vanderbilts and Jay Gould. While one would think that there was little new to be gained from an exhaustive look at railroads during their height of influence, this book clearly and definitively negates such an assertion. The railroad, America’s first big business, had a need to remain on the cutting edge technologically but also to order and channel those technological innovations to productive ends. The inherent tension between new innovations and existing management and business structures is one of the themes at the heart of the book. It is more than just a look inside the board room, engineering, and accounting departments, however. Railroads, while private businesses, were in the public eye in a way that few other industries were, certainly at the time. Politics, therefore, was also a constant concern. Usselman, an associate professor of History at Georgia Institute of Technology, opens the black box and takes a long look at the process and players involved in railroad innovation. He asserts that railroading during the period of study, “opens a uniquely revealing window into the dynamics not just of technical change but of American history” (p. 4). He clearly wants to tie technological history to the larger stream of American history and even to draw lessons from past attempts to regulate technology to our current efforts.

After a brief introduction stating the above objectives, Ussleman divides his work into three parts. The first is titled Assembling the Machine, 1840-1876, and itself is composed of three chapters. In this section he deals with the initial growth and development of the railroad system, broadly conceived. Railroads were more than just transportation for people and goods. Usselman correctly states that they were seen as transformative enterprises and, therefore, in the public eye from the beginning. This public inspection manifested itself in various ways, from an advantageous legal environment to land grants and other perks. Competition between railroads was less than expected as they were all engaged in the extraction of resources from a seemingly limitless and virgin land. As might be expected during this phase, railroads tried many ways to manage technological change, some more successful than others. Patent disputes were the major source of friction during this period.

The second part is titled Running the Machine, 1876-1904, and is composed of four chapters. With the initial expansion into untapped territory essentially over and with increasing inter line competition, railroads sought to refocus from expansion to efficiency. The public was increasingly turned off by the control that some railroads had over transportation of goods. This concern began to influence policy as the government became less accommodating and began to threaten increasing regulation. To respond to these challenges, railroads settled into a “middle age” where they increasingly turned to professionals for management and engineering expertise. Many railroads, most notably the Pennsylvania, enshrined these specialists in their own, in house, research and development facilities. Other roads embraced industry-wide trade associations, professional organizations, and engineering conferences to set standards and mediate technological development. Railroads also consciously chose not to be all things to all people but to concentrate their energies on what they did best, hauling bulk commodities long distances. Innovations that augmented the chosen mission were embraced while those that did not were shunned. In doing so, railroads elevated engineering and engineering principles above the forces of the market and economics. “The health of the industry as a whole,” was described in engineering, not economic terms (p. 268).

The final portion of the book is titled, Friction in the Machine, 1904-1920, and is composed of two chapters. Usselman asserts that the well-oiled and ordered machine that engineers and managers constructed during the late nineteenth century came under increasing assault from all sides after 1900. Mergers and consolidations left the railroad industry with seven large systems that controlled almost two thirds of the mileage in the United States. With increasing consolidation, government regulation also increased, culminating with a strong and forceful Interstate Commerce Commission that actively intervened in railroad business and set rates and policies. Traffic volumes increased and began to stress existing infrastructure and technologies. Finally, competition in the form of motor transport began to be a concern, although the inroads made by trucks and automobiles prior to 1920 were slight. To respond to these new challenges railroads backed away from the engineering ethos that they had embraced earlier. They sought more flexible ways of serving their customers. Ironically, as the railroads lessened their dependence on engineering and efficiency, the public and the government became enraptured with Scientific Management and even used these techniques against the railroads in rate disputes. The book is well documented with extensive footnotes and index. Usselman consults a wide variety of archival sources including government reports and trade magazines and journals. He focuses on two large and progressive railroads for much of his analysis — the Pennsylvania and the Chicago, Burlington & Quincy, although the Baltimore & Ohio is also mentioned at length. This leads to one small problem with the work. By choosing railroads that were clearly in the vanguard, others that may not have been as progressive are not explored. During the period of his analysis, there were literally hundreds of railroads with a wide variety of operating, management and engineering cultures. Bringing other roads into the narrative would serve to enhance the work. Railroads were not quite the monolithic industry that Usselman presents. Full standardization of such things as locomotive design was not achieved until the diesel revolution after World War II. At times Usselman may overstate his case to make his points. Railroads did experience much expansion after 1876 and the engineering ethos was strongly felt throughout the 1920s. The first section can be a bit slow and plodding but once the book gathers steam the second and third sections shine like well burnished steel rails. These problems, however, are minor compared to what Usselman has accomplished with his work. He sets out to look at a hugely important industry and its struggles with innovation over a long period of time and to tie it into the larger stream of American history. He succeeds at this task and then some. This will stand as an important work, not only in the history of technology and economic and business history but in American history in general for years to come.

Jeff Schramm, Assistant Professor at the University of Missouri — Rolla, is currently working on a manuscript about the dieselization of American railroads.