Railroads were among the earliest U.S. industries to apply modern management principles to their operations. Beginning in the 1850s and 1860s, railroads were the first American businesses to have a large number of salaried managers and an internal organizational structure with clear lines of communication, responsibility, and authority. These managerial innovations, standard by the 1880s, were necessary to control a large number of employees and offices scattered over a vast geographical area. With the growing professionalization of railroad management came a burgeoning professional literature. Marshall M. Kirkman wrote prolifically about railroad management. This excerpt from his multi-volume The Science of Railways: Organization and Forces (1896) extolled the virtues of military-like discipline in the running of American railroads.
The force that operates a railway is like an army. It is methodically organized and drilled. It has its commanders, its rank and file; its officers, sub-officers and privates. Its action is, however, peaceful and conciliatory. It strives at all times to preserve amicable relations with everyone.
The officers and employes of railroads are trained to obey in all matters relating to their business. In other things they are free. It is necessary thatthey should be obedient. The co-operation of a multitude can not otherwise be secured.
Insubordination among railway men is as great an offense as insubordination in an army. A country thus cursed is in a great danger as if its soldiers were traitorous. In the operations of railroads, the interest of the owner in the employe must be constant, intelligent and marked; upon the part of the employe, loyalty to the property must be sturdy, unswerving and apparent; the interests of the two are, in the main, identical, and it follows that differences between them must in every case be equitably solved if patiently borne. There is no other way.
Rules and regulations governing trains and the station and track forces of railroads must have the force and effectiveness of a criminal code. Disobedience endangers both life and property. It also prevents, here as elsewhere, effective and economical service.
All who enter the service of railroads do so on a perfect equality. They are at best merely experimental at first. But here equality ends. The energetic, capable, faithful and ambitious at once forge to the front. They do not need anyone to assist or favor them. Their merits are sufficient. It is a great mistake to suppose that anybody can get ahead or long keep ahead through influence. No one short of the owner of a property can maintain an unfit person in position. The natural law of selection operates in the railway service as it does everywhere else. It arranges and classifies the force and, sooner or later, assigns every person to his appropriate sphere of duty.
In railway practice each person must be adapted to the field he occupies. When he is not, the public and the owner suffer, because his deficiencies retard the efforts of others. Each must fit perfectly the place he fills, must be familiar with his duties, and able and willing to perform them effectively. Not only must he be physically and mentally capable, but he must be morally so. He must command the confidence and respect of his associates, his employers, and the public.
A railroad, to be effective, must be effectively governed.
Justice and wisdom must reign.
The highest as well as the lowest must be amenable to law and duty. The rights of the community, the interests of the owner and the welfare of the employe require this.
Opportunity to pursue private enmities and advantage must be minimized.
Everyone must be accorded his proper rights.
Investigation must precede judgment and wisdom and moderation must attend the execution of disciplinary practices.
These things require that there should at all times be intelligent supervision of the property; that those who labor, who evince wisdom, interest and faithfulness should be distinguished from those who do not; that those who pass judgment, who reward, or punish, should be dispassionate, resolute and wise. A company thus governed will never be made the pack-horse of private opportunity. A force thus ruled is invincible, no matter how tried. . . .
Subordination is a cardinal principle of organized labor—subordination to the employer, subordination to each other according to rank and natural precedence. It is based upon a just conception of the rights of men in their relation to property. All men, however, are entitled to justice and humane treatment.
The discipline of corporate forces is as absolute as that of a man of war. Obedience to superior authority is unqualified. It is, however, the privilege and duty of every subordinate in emergencies, when an order is given, to make such suggestions as the circumstances of the case demand. Here his responsibility ends, except in criminal cases.
An order once given, must be obeyed. Absolutism such as this involves grave responsibilities. It presupposes skill, accurate knowledge and appreciation.
In the administrative department of carriers lack of discipline breeds insubordination, idleness and extravagance. It engenders kindred evils in the operating department, with the added element of danger.
It is necessary that the forces of a railroad should possess esprit de corps, coupled with interest, intelligence, and courage that no event can deaden or divert.
While the discipline of corporate life is as absolute as that of an army, there is this difference between them: army life destroys the individuality of all below the rank of officer; corporate life intensifies the personality of subordinates by recognition and promotion. Everyone knows that promotion will follow intelligence, faithfulness and industry. The officers of railroads are drawn from the ranks. It is therefore for the interests of such corporations to build up the intelligence and morale of subordinates; to strengthen the force by careful selection and cultivation. Individuals should be taught to think and act for themselves in all cases where discretion can safely be allowed. They will thus be taught self reliance, and the exercise of prudence and good judgment. . . .
The work of those in the employ of railroads must be continuous, systematic and orderly. It is said that cleanliness is next to godliness. I think, however, orderliness comes next, because it is the most distinctive characteristic of the creator. Cleanliness is largely conventional. But systemization or orderliness lies at the foundation of every beneficent thing whether of nature or man. . . .
Slothfulness and inactivity indicate worthlessness and precede or attend decay of mental and physical faculties. They are evinced in a lack of method and system just as the effective exercise of these forces indicates life and growth: one anticipates work and seizes it at the right tune and in the most effective way; the other makes no preparation and succumbs to difficulties instead of surmounting them.
In corporate life it is the unsystematic man whose cry is most importunate for more help, for additional assistance. The cause of his distress he does not surmise and can not be taught. It is an inherent, fundamental difficulty. There is, therefore, no cure for it. Such men are natural “hewers of wood and drawers of water.” They are not equal to any kind of place or power no matter how restricted the field or how abundant the opportunity. . . .
Next to its traffic the most effective resource of a company is its officers and employes. The first duty of a stranger coming into the service, therefore, whether as president or brakeman, is to familiarize himself with those about him; to study their individual capabilities, virtues, rights and desires.
Every service should afford abundant material for filling its higher offices. It is better to promote an average man than to bring a better one from abroad.
The best manager is he who can achieve the greatest results with the material at hand. In railway practice the most important thing, from the manager’s point of view, is the character of the men he has about him. The building up of his force is his constant aim; this he does by proper recognition and promotion. When he has occasion to fill an office he does not go elsewhere if there is a man that may properly be promoted or that with schooling may be rendered competent. By such a course he builds up and maintains the esprit de corps of the service. Any other course quickly destroys the loyalty of the men and their effectiveness as a body.
The railway service is a miniature world. It is cosmopolitan. Every nationality contributes its quota, while all degrees of taste, cultivation and talent are represented in its ranks. Not all men are equal either in interest, industry or intelligence. Men of different temperament or nationality work with different degrees of intensity and effectiveness. The result, consequently, per unit of labor, is not the same. Rewards are, therefore, relative. The quantity of labor required per unit of traffic decreases with every improvement of the service. Every advance made heightens effectiveness and decreases cost. The incentive to improvement is, therefore, boundless. Nor is opportunity restricted: no one can say how far improvement may be carried. . . .
In considering the relations that exist between the officers and employes of a railway and between the employer and those working for him, much thought has been given to the adoption of some practicable method whereby the interest of the employe may be increased. It is a well recognized fact that work performed under the stimulus of self interest is greater in quantity and of better quality than that of a perfunctory nature.
Men work according to the measure of reward in store for them. Wages are generally based on this. It is impossible, however, to distinguish nicely between those who average very high and others. More or less uniformity is unavoidable. Wherever this uniformity is not based on actual performance it is unjust to the employe and operates to the disadvantage of the employer. While the subject has received much attention, no solution of it has yet been found. It is purely a practical one and must be worked out little by little, like every other great advance. Of particular experiments that have been made with a view to the discovery of some method of inciting the efforts of employes outside of and in addition to the incentive of pay and possible advancement, the experiment has been tried of offering special inducements to invest in the stock of the employer, thus giving employes a proprietary interest. In the case, however, of the low priced employe the interest thus acquired is so limited as not to sensibly overcome the natural disinclination of men to do more than is absolutely necessary, or at least more than is called for by the letter of the contract. Another plan is to divide a certain percentage of profit among employes upon the basis of wages. The defect of this method is that where such percentage is apportioned among all without regard to merit no special inducement is offered an employe to excel. . . .
In general, that form of organization is best for corporate property that enforces the most minute responsibility and offers the greatest encouragement to those who work for it; that enables a company to know the measure of faithfulness and capacity of its servants; that rewards the trustworthy and takes cognizance of the derelict.
The growth of associations and unions among railway employes brings to the problem of operating corporations a quantity previously unknown. These influences it is impossible to forecast. If not wisely governed, such societies will deaden in the heart of the employe all interest in the affairs of the employer beyond those of a mercenary nature. This truth can not be learned too early by employers or be respected too implicitly. If it is not, the ultimate downfall of corporations is certain. Men who through extraneous agencies, seek to gain unjust advantages, can not too quickly learn that those who have money will not jeopardize it in properties thus threatened. Men will not put money into objects that exist at the mercy of those who have nothing in common with them.
It is probable that many labor associations have, at the bottom, a belief that the employer does not properly regard the interests of his employe. This belief is false. But in order to dispel it and in doing so break up such combinations as are subversive of the employe’s interest, railways must actively interest themselves in the concerns of those who work for them. Their interests are jeopardized, not because they have been disregardful but because their employes believed they have. This erroneous impression the owner must correct if he would not have foreign and unfriendly agents meddling in his affairs. There are two ways in which corporations may and do manifest their interest in those who work for them. In America it is done by kindly treatment, the payment of high wages, continued service, promotion, and by making the employe self reliant and independent. In many countries wages are unavoidably low, and so corporations eke out their efforts by small annuities and distress funds, and by special interest in the sicknesses, discomforts and forebodings of those who work for them.
The vicissitudes of corporate service require a paternal form of government. The owner must be the father. Failure to recognize this will aggravate the growth of unfriendly labor associations.
No labor organization ever formed, no matter how great the provocation, can prove beneficial unless those in charge are men of such exceptional wisdom and probity of character as to make their interest in everything they concern themselves about a blessing. No labor organization can ever be beneficial that qualifies the service or lessens the interest of the employe in the employer.
In general, employes are safer in the hands of the employer than in those of anyone else. His interest is permanent, material and fatherly.
The conception of the employer by those who work for him must be broad and charitable. Nothing is attainable without this. Employes must not be quick to believe they are treated unjustly, are overlooked or forgotten. They must be governed by reason. They must accept the conditions of life as they are. They must go ahead sturdily and cheerfully, believing that if they comprehend their business and are active in the discharge of it, their services will be recognized. They must also appreciate this truth, that those who are preferred are, on the whole, worthy of it. That while there are exceptions to the rule, they are unworthy of regard. Disappointed men, instead of repining, must seek by renewed zeal and attachment the recognition they desire. They must not seek, in such emergencies, through combinations, or otherwise, to force what they can not peaceably attain. Force may operate to their advantage for the moment, but will result in lowering their status and otherwise unfitting them to compete with their fellow men. He can never hope to attain eminence, to become a leader, to be independent, to be self sustaining, who seeks thus to bolster his fortunes.
Unflagging industry and continual study is the only road to preferment. All others are makeshift, temporary and incomplete. When men do not progress as fast as they think they should, let them work and study the harder; do more and better work. There is no other road to preferment. . . .
It was at one time thought to be practically impossible to manage a great railway effectively. This was true formerly. It is true now where organization commensurate with the property is not effected. It will continue to be true hereafter wherever individual responsibility is not provided for and co-operative effort maintained.
The same difficulty that is experienced in guarding an extended frontier, or military line, in time of war, is experienced in watching the interests of a long line of railroad. While the attention of the management is occupied in strengthening some weak point in the system, dangers more or less serious threaten it elsewhere. To guard against this it must be protected at every point by men disciplined and fitted to govern.
The extent of territory to be watched is so great upon a railroad that it is impossible for the central management to keep itself advised, except generally, of what is needed at remote points; an arrangement perfected and set in motion today will need revision tomorrow or the day following, but in the multiplicity of affairs the exigency will pass unnoticed if proper provision is not made to have it looked after on the spot by local officials. A great railroad can not long exist as an entity that does not provide for a suitable division of authority and responsibility. It may last for many years, but its ultimate downfall is sure. Why? Because only those clothed with the responsibility of management can appreciate the significance of its affairs, or can be induced to assume the responsibility of acting for it.
No one, except the manager of a railroad, can estimate the injury a property suffers from neglect to clothe its officials with necessary authority and discretion. In no other way can needed changes be made promptly and effectively from time to time. Wherever the local operating officers of a railroad are deficient in number, experience, talent, or discretion, opportunity will be lost and antique methods of business pursued. On the other hand, if the general staff is deficient in number and authority, its members will be so overworked as to be practically inaccessible to those who ought to go to them for advice and assistance; so that the probability of their attention being called by subordinates to matters that ought to have their action will grow less and less likely as intercourse becomes more and more difficult. Subordinates will quickly discover, where such a state of affairs exists, that the royal road to preferment does not lie so much in bringing needed matters to the attention of the management as in abstinence and complaisance. . . .
In the early history of railroads their management was personal and autocratic; the superintendent, a man gifted with energy and clearness of perception, moulded the property to his will; it teemed with projects emanating from him and of which he was a part. But as the properties grew, he found himself unable to give his personal attention to everything. This, however, did not daunt or discourage him. Able, ambitious, indefatigable, faithful, he sought to do everything and do it well. He ended by doing nothing. He was the victim of over ambition; he saw that by trusting his subordinates he lessened his own importance as the dispenser of details, while if he did not trust them they threw the burden of action and responsibility upon him. This was exactly what he desired He was suspicious of everyone and impatient of everything that did not emanate in him. Like all tyrants, he was narrow and arbitrary. His methods and undue assumptions lessened the interest and pride of officers and employes in the enterprise, without building up anything to take its place except his own personality.
The remedy for this state of affairs was found in trusting men and in making their authority and responsibility commensurate with their duty and the necessities of the situation.
Much depends upon the organization and the talent of those in charge of a railroad. Men differ widely as to their ability to animate others. One officer will receive the maximum service of which men are capable. Another will be able to impress only such subordinates as labor in his immediate presence; still another, personally capable and faithful, will be surrounded by incompetent, dull and heavy witted operatives, who render only an indolent support. Manifestly only the first named has the capacity to manage. He alone possesses the ability essential to the operation of a railroad with its vast interests and multitudinous affairs. But what of the other two—the men who know how to work themselves, but are incapable of getting work out of others? Manifestly they are only fit to fill subordinate positions, to hew wood and draw water. But their own estimate will be far different from this. They will not recognize the incidents we describe. Nor will others in every case. Hence we shall oftentimes find them occupying positions of high responsibility or actively aspiring thereto. They are not unconscious of their failings, but believe them to be offset by compensating advantages. Vain delusion. They are the bane of the business world; the men who render the sagacity of investors fruitless; who tear down the edifices erected by others more gifted; who fritter away opportunities that would, in better hands, be seized and profited by. When such men are placed in charge of a railway, we may trace in advance its future. But however baneful, they are not so fatally destructive as the autocratic manager of earlier days. They are simply stupid; he blighted the men about him and in doing so ultimately blighted the property.
To obtain the highest results at the least cost, a road should be large enough to occupy the maximum attention of the minimum number of officials necessary to such enterprises.
The enormous number of details that press unceasingly for attention on a railroad is so much beyond the capacity of a single person that much of the work is neglected if the organization lacks comprehensiveness. Work will be carried on without adequate preparation or consultation, or will be allowed to lapse entirely.
Ability to act for others grows with its exercise. The spirit is one to be cultivated. Some one must be trusted. The danger is not in trusting subordinates, but in neglecting to educate them so that they may be trusted; in neglecting to instruct them and build up in them a sense of loyalty. . . .
There are many points of resemblance between the organization of the service of a government and that of a railway. The same spirit animates both. In neither is there any financial risk to the employe. The servants of each act for some one else. They have many things in common; are alike in many things.
The difference between efficiency and inefficiency in corporate service is not occasioned so much by inherent differences in men as by differences of method. If a service is wisely organized and governed, efficiency follows; if not wisely organized and governed, inefficiency follows. . . .
The railway service possesses for those connected with it the insidious charm that attaches to political life, without the attendant publicity and gross vilification of the latter. Its attaches, while striving zealously for the common good, are rarely embarrassed in their official life by any friendships except those of convenience. Weighing, with the precision of courtiers, the probabilities of this or that interest, they are ever ready to welcome the victor. The chief that has embarrassed his administration and alienated his supporters in efforts to surround himself with men personally devoted to his fortunes, sees eventually with apprehension and shame that their support is governed wholly by policy, and their friendship by self interest. An officer who is saluted on every hand with cordial recognition today, is passed by tomorrow with cold indifference. His star, as long as it is in the ascendant, excites attention and speculation; but a day is sufficient to destroy the prospects and blast the hopes of the most aspiring, and call from obscurity men without friends or prospects of advancement. These features of corporate life attend more particularly autocratic forms of government such as characterized the service of railroads in their early days; they are, however, still to be found, here and there, in a mild form, but are everywhere tempered and modified by the influence of the owner, who is as much concerned in building up competent men as he is in building up his property.
In every railway organization, underneath the surface the most active, albeit good natured, rivalry exists. The strife to which this gives birth renders the life of the railway man one of continual surprises and harassing perplexities. This is unavoidable where so many men possessing substantially the same peculiarities of education, temper and object, are brought into active intercourse.
The finest administrative ability that can be found animates and controls our railways. Doing a colossal business, extending over immense areas of country and employing thousands of men in the prime of life, energetic and ambitious, moving in their places with the precision of soldiers, yet each animated by a determination to achieve personal success, their successful government demands abilities of the highest order.
How to control these myriads of men without destroying their individuality and pride; how to throw around them and the officers that control them the safeguards essential to the protection of a company’s interests, are questions that occur to all who are interested in making the service efficient.
While the organization of different corporations appears, to a superficial observer, to be substantially the same, the widest diversity exists. Thus, roads situated in the immediate vicinity of the proprietors are held under greater restraint by the owner, because of such proximity, than those more remote. No organization, however, is to be commended that does not conform to certain well known principles of civil service that experience has taught as being necessary to good government. Such matters are not open to argument. Properties remote from owners, if not properly organized, pass, by easy and imperceptible stages, from the control of their owners to that of their managers. This may be avoided by systematic organization. However, the danger of demoralizing a force by placing checks upon managers, in many cases, deters owners from attempting it. Now, while absolute authority is essential, it should be concurrent. Arbitrary power is prone to be unjust, to disregard common principles of good government; to govern through fear rather than justice. The remedy is simple. But we must look to see this remedy applied by those whom it is designed to hold in check. Nothing can be accomplished without their active sympathy and aid.
Methods of organization necessary to secure good government under all circumstances must originate with the manager; they dignify his office, ennoble his character and add to his fame. This is true of both public corporations and private enterprises. The task, while simple, demands thought and elaboration; it requires the enforcement of such safeguards as will secure the unity of the force as a whole without weakening the authority or lessening the responsibility of those entrusted with the management of affairs. In constructing such an organization the builder must be sincere; he must also be worldly wise. He must possess practical experience, coupled with a knowledge of the principles that underlie the control of men and the building up within them of those qualities that distinguish highly capable and faithful men from those who lack such characteristics. . . .
Source: Marshall M. Kirkman, The Science of Railways: Organization and Forces, 5th ed. (New York and Chicago: The World Railway Publishing Company, 1896), I, 63–83, 113–116, 170–175, 181–186.