Conversation 061-002

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Here we go, our gentleman is the president.

The president's coming up next.

All right.

Sit on the cross.

Jimmy Yost.

The president.

Mr. Dennis.

Watch y'all sit out.

Oh, yeah.

Yeah.

I think it's a good thing that we have a different railroad union in this industry.

It's just about the same.

And we'd rather we had a bigger table, so that we have a career before we invest in a different business.

That's right.

Well, we didn't have three in 1980.

Just three times.

Well, let me open this meeting by telling you how it came about.

And it's not on purpose.

We, so this whole week, I asked when we met before,

Railroad, we landed in Amtrak.

We discussed the passenger and the business.

And then I had the railroad president to represent it here.

They were pretty representative of the country, the east, the south, and the west.

And we talked about that.

And now we have the leaders of the railroad unions.

The purpose of the meeting is not to get into problems that are basically yours and those that involve you in railroad management, like labor management relations and bargaining and so forth.

That's something that is not my province.

But to get into that kind of thing is...

this kind of a meeting where so many various people are represented is not the best forum for it.

But what I tried to cover with the railroad leaders, other than I'm not speaking about Amtrak, which we're really more of a passenger service almost,

let me give you a rundown of what was the primary subject of discussion with the railroad management.

First, we got down to cases on the future of the industry, and I asked one of the railroad presidents, the president of Southern Pacific, I said, look, you take the railroad and you can see what it's saying.

I said, a lot of people don't think so.

It certainly is.

He said, we're all in this.

We're all in this because we think it is here to stay.

We want to stay.

And then, of course, they pointed out something that I mostly feel very wrong about, that this industry is enormously important to the economy of this country.

That to allow it to

continue to have the inequalities which might eventually lead to, say, some kind of government operation that would not be in the interest of management and not in the interest of labor, and would certainly be in the interest of the American people.

They also, and then we got down to some of the problems of the ministry, and really,

And they zeroed in very hard on the need for new equipment, for new installations like overpasses and so forth, and all the other things to be done so that the

that the industry could be intended.

They also zero in on the need for, as far as the regulatory agencies of the government are concerned, I prefer now to the State Congress Commission, whereas they point out the necessity for those regulations to take into account the situation that we have in the nation today.

When the SEC was first set up, the railroad industry was a virtual monopoly in terms of the hauling of freight, but then along comes trucking, and then along comes airplanes, which takes, of course, the cream off of some of that stuff that has to be delivered fast.

So you've got airplanes are not, frankly, a major competitor that we'll come to that later, but the trucking is, and so you find the railroad industry

regulations that speak to a different time.

I'm not suggesting today to you any more than I suggested to them what ought to happen, except to indicate the interest of us in the administration in working with the industry, working with management, working with labor,

to make it more healthy, to allow it to be more competitive, and to find ways that government, either through its regulations and so forth, can't be helpful.

One example, and then I'll throw this open to get some of your viewpoints on yours and some of these other things.

One example that was raised is the problem of

For example, with the tax deal, I'll show you what could happen.

One regular president pointed out that if a change in the tax legislation could be made, or a tax ruling that may require legislation, it may require a ruling.

But that's not going to do that.

The effect is what he was talking about.

This is probably something all of you agree with.

The change in the regulation could be made.

so that the railroads could write off on the constructions of tunnels, etc., which are needed.

They said that it could first have a very great effect in terms of jobs and the economy, and also it could have a very great effect in terms of making the railroads less impenetrable.

They put it another way.

They said, for example, that railroads over the past,

in the past five years and plowed back a billion and a half annually into their plant equipment.

They said actually, they could be, and could, if they had the wherewithal to do it, they could plow back three billion, three and a half billion.

That would be an increase of two billion dollars.

Well now, and plowing back plant equipment and so forth, all that has a very, and that could be done every year for 10 years, as a matter of fact.

That could have, of course, a bit of an effect on the economy.

There's jobs for those, and, of course, workers' choice, construction projects, if that's the case, or the rest.

But also, in the long run,

has a great effect on all of you, because the more healthy those railroads are, the more members are working, they're going to be, and the more productivity they become, the more competitive they become.

the better the situation is around the bargaining table.

I simply summarize it in this way.

We ought to be quite honest about it.

I think all of you are trying to look at it the same way.

This is not for the purpose of assessment.

There's probably enough on all sides.

The government may have responsibilities.

They're able to manage them.

They may not have been up to date.

Certainly the regulatory agencies, many of them, they speak to an obsolete condition, and the condition has become obsolete.

There are certainly problems, as we know, insofar as labor management relations.

The fact that we've had some work stoppages, either threatened or actual, which have really

because the country is very, very concerned.

All these are factors that we have to take into account.

And of course, on the latter part, as you know, that's one of the reasons that we have recommended the bill to the Congress of Transportation.

Many of you may not like it.

Some of you may.

The reason we recommend it is that we feel that we need a better approach than we currently have.

But I'm not asking you to comment on that unless you want to.

But one thing that is generally agreed in the country is that

For whatever reason, or for whatever combination of reasons, you have a situation where railroads today are not considered a particularly good investment.

You know what I mean?

Railroad stocks, in return, many of you probably have been home to some stocks initially and have it back because of the earnings of railroads.

The most profitable was Southern, approximately about 4%, and most of them averaged around 2%.

Now, you compare that with most other industries, you know, where it runs 5, 6, 7, where you don't put your money.

Now, on the other hand,

Your industry has one in great advantage.

In my view, it is now, and will continue to be for many years, an indispensable industry.

It will continue to be as long as any of us are around.

We all know that.

Nobody can foresee the time when we're not going to need really strong, healthy service industry.

Now under these circumstances, what we want to do is to find a way to talk to the leaders of labor, the leaders of business,

Instructing them, not to put blame on anybody.

As I said, you've talked to us in the trust before, what we worry about.

To find a way that the government has a great interest representing the people where the railroad industry's management and railroad labor leaders like yourselves, where we all look to our own interests, but together we do the necessary things that may strengthen this industry so that you,

Instead of working in labor organizations who are working for an industry that is going downhill with less and less hope that you will be working, you will be heading labor unions that will be working in an industry that is going up with better prospects for the future.

That, I think, is something that we kind of agreed on, was the thrust of our meeting with the railroad executives, and they laid out their problems, mostly.

in the regulatory field, in the tax field, and we'd like to consult.

John, would you like to?

Well, I'd like to ask Mr. President, I think, a little bit of the perspective from which these men have to look at things in their industry.

They've seen in the last 25 years the industry go from about

200,000 employees down to about half a million, if I remember right.

And we've got 580,000 here.

So it's been quite a fall during that period.

But yet, even during that fall, because of turnover and because of change, there have been anywhere from 25,000 to 100,000 people hired each year.

So it is just all a...

workforce is ready for retirement.

There's a large number of older people in the industry, but not solely so.

And they've got this problem of declining membership and the problem that has hit the industry in the sense of its decline has had its effect on them and has definitely affected the way their members look at things and the way that they look at things.

problems of competition that they've had in the past quarter century from new forms of transportation, and particularly from new ways of doing things, new shipping techniques and things of this kind, has made the, just a constant conning of rear guards

battle for them to try to find ways to stay alive and to keep their organizations intact and their organizations even like the federal government with budgets and concerns for dollar expenditures and things like this and things that concern them.

This matter of regulation, I know, is one that is a real dilemma for everybody in the industry.

The management side, the core of the industry side, the extent to which regulation helps and the extent to which it hurts, and trying to decide which helps and which hurts.

In general, I think that there may be an increasing feeling that all the regulations that seemed to be protective in the past hadn't always been, hadn't always had that end result.

Well, the point being, in the time you had the regulations, there were good reasons for it.

Oh, you involved so many in the industry that, as I said, when the railroad industry was basically a monopoly, you would use them off a lot of regulations.

And now, at the present time, you regulate the railroads, but you're not regulating some of the people competing with them.

Now, of course, that runs a terrific problem for the Congress, I can tell you, too, you know.

If I had a group, we haven't had the trucking people here, John, yet, but we'll have to have them.

That's for equal time, too, but they've got quite a lot of you in Congress, just as you might have said, just as the management people have been.

But I do, I think we all have to realize that we in the government, we want you to do the same thing.

We should take a hard look at all the regulations we've got to see whether or not we have to bring them up to date to see that this industry is not being hamstrung in some instances, and maybe less competitive because of regulations that no longer are relevant.

Is that really the case?

Exactly.

Including labor.

That's our view anyway.

When we came to start looking at this thing a couple of years ago, this problem that the industry had and the recurrent nature of it,

It appeared to us that the railroad was an industry in trouble on the operational side, on the financial side, on the regulatory side, and on the labor side.

Bill Laustrey, largely in our department, decided to take some initiative on that and got together a group of representatives of all these railroads.

I believe it was the first time that they'd gotten together as a group under government auspices for at least a decade or more.

doing some ground work with them, what can we do to bring some stability into the labor management picture in the end?

And we got some excellent cooperation on these kinds of objectives.

One thing, we do need stability.

One way to achieve that is to have longer term agreements for weapons.

Try to have some similarity of germination rates.

and to engage in some real bargaining rather than the kind of thing that had marked the industry too frequently in the past.

Well, we just got in the middle of that sort of thing meeting the railroad management people and with the labor union people and then we came along with a series of open contracts and the problems that occurred in negotiating those contracts.

So we just really opened that idea.

We're now in what I would call a summer and early autumn phase of still a number of major contracts and hopefully that we will be able to resolve during that period and then we'll be able to pick up and start working at some of the more fundamental things that I have yet to find any of this group that haven't agreed need to be done, need to be approached.

That's so much for the later side.

Bill, do you have anything you'd like to add to that?

Because you were the one that really is the architect of this project.

No, I don't think so, Jim.

Other than this, I think that area agreement, Mr. President, that's been agreed to now, has a common date their moratorium was expired on basically the same day July 173.

But if we can get through this round of bargaining, it should be of us next year.

No later disputes.

There would be minor disputes in the end of this year, and it would put us over in the 73rd.

where in the past, there's been disputes and then one right after another.

And we, everyone around this table, we've spent some long nights together.

Most of them are cooperating in this area to try to achieve the end results, because they recognize that the problem is not only for them, but their members, but for the industry itself.

So we have made some progress, and there's a lot more yet to be made.

Governor, from an operating point of view, do you have an opinion that you might like to pass on at this point?

Well, let me just say, Mr. President and gentlemen,

President, I think you've put us very well, as a matter of fact, in terms of things that come to mind.

To the gentleman around the table, remember, it wasn't too many years ago, it wasn't 100 years ago, or 50 years ago, it was only about 20, 23 years ago, that St. Louis carried about 61% of the intercity freight.

Today you carry 41% of the freight, and even though in Tundra,

The thing is, our little lion needs to be, the percentage of the total volume that you're carrying is dropped just about 0.7.

And that's the thing with this present person.

Very good practice from the point of view of the environment, from the point of view of the competition.

From our viewpoint, we see railroads as being a very essential, and in many cases can do a lot better job than other modes of transportation.

And one of the reasons why we're so interested in trying to see what can be done to be helpful.

I think that's the real reason that the government is leading in this kind of situation at the present time.

This is an industry in trouble, but it's also an industry with perfect promise.

If you can get over a few major hurdles of financial operational and major dangers, there's real promise that this industry can come back and come back strong.

The ingredients are there.

Well, those are just some initial observations from our side.

Just welcome any observations you may have.

Charlie, I guess if you were present in the hand-track discussion, you might like to read off some observations.

Well, today we had our first report of a joint venture between the railroad and the

We and DOT, DOT asked us a year ago if we'd be willing to come on a committee and work with them and the railroad to see if we could try to resuscitate your union or all the isolated.

And over a year ago I made an agreement with Illinois Central on the

and then after that we made this one with a high level conference, which everybody's represented on, six, five of us meet with it.

Now they came in earlier to report today, and it's the first time in my 40-some odd years in the railroad that we've ever got together on this.

Now, as things came into date yesterday, I met with you, we talked the other day, and we put a new release on it and took action on it at this meeting at the University Club.

Now, we know, railroad people know, there's going to be some changes in railroads.

But we don't, or I don't, I'll speak for myself, I'm willing at this time to give them a blank check and let them make them their self.

I think it should be a joint set and a joint experiment and see what is a hurdle to railroads.

And I'm certainly sure that the boxcar loaded moves two hours out every 24.

Now, when you take a man's freight and move it two hours out of 24, you can't expect to get business back on the railroad.

Now, by that you mean that it's not used for 22 hours.

It's loaded and sent back for 22 hours.

You load a car in California going to New York, the total time it spends moving

from the time it leaves California until it gets to Guyard, it's two hours out every 24.

On average.

It might be closer to an hour and a half.

Yeah, I mean, it could be closer.

I'm guessing it got worse than it used to be.

Oh, definitely worse than it used to be.

We were on the wheels off of a train to get us to Chicago, and since going to Connection Line, it had taken 24 to 48 hours to get over to Connection Line to get out of Chicago.

And they had...

These two task forces, one was on the finance and the tracks and so forth, and the other one was on the yards and the other things that pertains to the operation of railroad.

Now, I think this, and I think every man around the table agrees with me, we want the railroads to prosper.

but we don't want them to prosper with it all coming out of the men's back that we represent.

We want to be a party to whether to prosper or not.

And if they will work with us on these joint reports, we can work out something that will bring the railroad back into railroad business.

I think the first thing, in my opinion, that should be done, they should do something to keep them diversified to the point where the railroad is secondary with them.

I mean, there were presidents that she was talking to in here last week.

Pepsi-Cola business, a hosiery business, every other kind of business, and the railroad might be the secretary, it's just a tax giver, in my opinion.

Now, if they want to work with us, I think every man around here is willing to work with them.

But to this time, in my 43 years, this is the first time that we've ever made a joint study with the Mr. Fogarty's department that set up this joint study, and they come in with a good report that was accepted by both sides impressively.

Not saying that I don't like it, saying that the railroad don't like it.

But be that as it may, we did start and we got a report made by the three different parties

that we can go from there on and try to work out some of their problems.

Now, we don't want to give them, as I said, a blank check.

If we agree to some rule changes and that's not what they need, we have a compensation grant.

If we take a yard and experiment and find out what the need is and then change it accordingly, we will compensate them.

And here's a report of our action, a report of the press release, a report of each of the tasks in support, Mr. President.

Thank you, sir.

Thank you.

I think that the Committee of Railroad Presidents, which was set up about three years ago to meet with the Committee of Union Presidents, has done a lot for the industry in bringing about a bridge

communication gap that existed previously.

You see, they set up a negotiating committee.

Jack Hill's a fine gentleman, but he is not a railroad president any longer.

He used to be president of a small railroad.

And

He has a job to negotiate the best agreement he can negotiate on behalf of the rail workers.

And we have a job to negotiate the best agreement we can on behalf of the people we represent.

The railroad presidents, many of them are friends of Luna's, friends of mine.

We've worked with them individually to solve a problem on their property.

But the thing is to get these railroad presidents a frame of mind to sit down and take an active part when a crucial question comes up.

for settlement by that negotiating committee, how the one-day strike that we had, that Bill Husrie helped out on tremendously, or we may still have done on the strike, that could have been avoided.

I think the settlement strike two days could have been avoided.

I accept the fact that the laborer has a certain amount of blame, but it could have been avoided if there had been the right kind of exchange of information and rather than just putting too hard-headed negotiators down and try to work the problem out, if you had a group of railroad presidents

at either one of those conferences.

Now, I would think that this is important enough, when you get down to that point, where definite means of settlement or a strike, that the railroad presidents should have a committee set up to come in and take a part.

Now, Lou Mink is a hell of a good man.

Fishwick's a good man.

Bill Johnson's a good man.

Bailey is a good man, and Biagini, Graham, they're all good men, and we associate with them and everything.

They should not duck this issue when it comes to a question of settlement or strike.

They're the presidents of the biggest railroads in the country, and they should come to that conference table at that time.

This is no longer...

This is no longer a case for Jack Hills and his committee of fellows who are really about third or fourth or fifth rate officers on the respective properties of the regions.

And I think that these things could be avoided.

i've worked out many problems with lou mink on the burlington northern property and he has no problems up there on that property compared to what the other railroads have especially the same way jack bixby is a fellow who believes in taking a hold of a naughty problem

I believe that a president has this responsibility before he sees the whole country.

But you see, they have set up this negotiating committee, and they pay a pretty good salary, and they just got this responsibility.

I think it's their responsibility to help keep these railroads running.

And then they rely on going to Congress and hoping Congress will pull them out of the hole.

And so I think that Bill Oxy went a hell of a long way in convincing us that we should quit this one contract expiring this month, another one two months later, another one six months later.

This keeps the public in a hell of a disturbed state of mind, and there is no question but what his idea of giving us all the terminate at the same time at least brings about that much uniformity.

And usually the industry has a tendency to follow patterns.

I think that we've, I agree with everything that was said by you, Mr. Secretary, that you've

You've set the program for the future on this, and I believe that it's good.

I agree with what the president said, and I don't know of anybody around here that's going to oppose any of these programs about regulations.

We think the railroad industry's been getting the short end of the stick, just like those presidents who were in here.

in respect to taxes and in respect to regulations because we know how much the airlines are subsidized, we know how much the waterways are subsidized, and we surely know how much the truck lines are subsidized by these miles and miles of concrete highways throughout the country.

We think the railroads are entitled to some relief.

We have generally agreed to support them on the ASTRO program in general, but not in detail.

We want to look at the detailed pieces of legislation that may have to be submitted, and we think that if they will but

put themselves out a little bit to get a little closer together with the heads of the unions that many, many of the problems of the industry can be worked out.

I agree with what Charlie said in my task force report.

This is terrific.

These fellows with opposing points of view

but sit down and recognize the facts after studying the problems of the industry.

Now, if they can do it, people of the second and third echelon or level, but certainly the railroad presence and the presence of these unions can do this too.

We have to stay competitive with other unions in the transportation industry.

And once the guy is set, it's pretty hard to change it.

But we try.

We are all men with 30, 40, I've got about 43 years of service.

I've got 43, everybody around this table.

has grown up on the railroads.

We're not just, you know, we don't come in on a fly-by-night basis.

We started out as on a low job, worked our way up.

We had to convince ourselves

and everybody that we work with that this was a good industry.

We know the potentials of the industry if it is managed properly.

I don't think any of us really down in our heart want nationalization of the railroads, but gosh, we want them to operate them the way they should and we want them to sit down at the conference table and work these problems out and put forth the effort.

It's just as important to them to work out

These important labor matters to avoid a strike as it is to make a big deal on buying Pepsi-Cola or some outfit like this that Charlie talks about.

Well, we certainly aren't laughing for experience around this table, Mr. President.

We have to see if we can put them all together.

We probably have about 25 to 30 years' experience at least in this group here.

The President has a schedule that I noticed in there on his calendar that he has.

If I can take another few minutes.

All right.

I'm particularly interested if anybody has any observations to make about the regulatory situation from your perspective.

Mr. Secretary, one of the things that we've been rather interested in is standards for operations.

I'm from the Pennsylvania class of craft,

They're one of the first groups to do the acts when the money gets short, because you can defer maintenance.

We were meeting with one of the presidents this morning, back from Tennessee and New Jersey.

They have to do something and do it quick because there's no more money.

And I ask him about what his deferred maintenance program may be, and they're up into the $4 or $5 million.

Every railroad in the country has a deferred maintenance program because they can flip that off and still move freight.

And as Charlotte says, as long as it moves at two hours out of 24 hours, they call it moving freight.

So we are interested in some of the standards that the industry can utilize, and this has to come through the department here in Jericho.

And as soon as those are out and the carriers can abide by these regulations, these safety standards, we view that they can move the freight safely without so much of it going to salvage.

is being done presently.

Of course, we anticipate that rather than reducing maintenance and holding it back in reserve for years to come, it never gets done.

It's constantly deferred.

That's agreed to, Mr. Copey.

You're also only done.

All right.

I'm glad you made the point you did.

That is, if we can start to move this freight an awful lot, because it's moving now, that's one of the things, the packet which I am recommending,

to the present administration includes complete, not just one or two or three railroads having computerization and all, so that they know where every car is.

But if you're going to computerization, what we're concerned about is the safety of the track.

Frankly, every mile of track, it has to get slower.

The thing that the president gave, as a matter of fact, the million and a half, billion and a half that's spent includes maintenance, and it should be, as he indicated, three and a half billion.

Right.

And this includes, of course, the maintenance of the track maintenance right away.

We just got this legislation, and I want to, as long as I can, press our appreciation of the minister's support and...

We had a connection with the real estate legislation, and I assure you that we're moving on it.

Again, things organized in government are my business, although that's bad enough.

But we are moving, and we will get the kind of

organization going and really moving the series so that instead of having a different state regulation each state as you have before, you have a uniform now that will allow both your colors and management to work in a great deal better manner than they were able to work before.

That is going to be moving very definitely as well as the opportunity

to move this freight car and find out where it is at the touch of a button, instead of finding out how it has a year-and-a-half gelato, which is half of the gelato.

The story's gone that way.

Well, anyway, Mr.

Governor, I'd like to be respected to the point made by Mr. Lee.

We, the signal department, are working in a field that is regulated.

You can have all the regulations in the world, and unless they're properly administered and enforced, it means nothing.

Now, all of our signal and communications systems are regulated, but we are in an era right now where we bring these complaints to management about the tests not being made because the manpower is not there, this force reduction and this mass reduction in the number of people.

in the industry has affected all departments, and ours, of course.

And as a result, we have a regulated department.

However, they're not living up to the standards.

And it takes our people to greatly protest against us, and we go back in and we see the famous white watch letter coming out of the Bureau of Safety where they've been out there and they found that this condition did exist.

They brought it to the attention of the carrier to be corrected.

A month later, we got the same thing again.

So we can have all the regulations in the world, unless we've got people out there, enough people to take care of these things, but we're not going to solve the situation.

That's a pretty good example, all right, of the fact that regulations themselves are not the cure-all.

Right, right.

It doesn't have to be something else.

As far as what we just prayed over, the words out now that the failures of signals occur on weekends, don't call the maintenance man until Monday morning.

What kind of a system is that?

I've got letter after letter that you're going to get one of these days.

I'm building a file that don't call until Monday morning.

Anything happens after 4 o'clock on Friday night, let us in.

Is that because they're trying to avoid overtime?

I would imagine so.

It always sucks out of me right away.

Well, I'm going to do that, but it's something that, back to the point that Mr. Dennis made, I think if some of these railroad presidents will do a little homework,

They could solve a problem of theirs on their particular river, but when they delegate authority to a national bargaining committee, and the national bargaining is their feature, we don't want it.

I think everybody around this table would like to deal locally.

They want national hands, and yet they delegate authority to this group that does not know the problems on a particular river.

They're not all the same.

The railroads are like our illusions.

We have some particular problems that affect each one of us.

Mr. Dennis' problem is different than mine.

Mr. Lewis is different.

And so are the other fellows down there.

I can't get out there.

No problem.

And if you say there were slow orders on what actually every mile of railroad in the United States.

That means, in other words, your maintenance problems.

That means your maintenance problems.

You'll find millions and billions of dollars in deferred maintenance.

And our courses are, I would say, 50% of what they were 10 years ago.

There was one that I just gave $6 million to keep in court.

Otherwise, it wouldn't have all ended right now.

What this does bear out, though, is that one point of common interest, so if we could find a way through either the tax route or other routes, whereby the railroads could plow back

and a lot of money into their equipment and the rest.

That would have a great beneficial effect.

What would it not do?

Well, 30 years ago we were operating with a million and 500,000 employees.

We've got roughly 600,000 now.

So certainly that proves that the productivity of the railroad workers, we haven't reduced that amount of traffic on the railroad.

We know that.

So as far as labor is concerned, I think it's a minor part of the problem on railroads.

It's there, but it's not an important one.

So what is your answer then?

I think it's the people we're competing with.

These people are getting subsidies all over the country, as we know, airlines, boat lines, barge lines, truck lines.

That, I believe, is the answer.

We need some better for them to make a healthy railroad system.

They need help.

The regulatory legislation that we are finalizing now is going to be a tremendous help because we recognize that the bias lines don't pay a single dime for user taxes.

The railroads pay taxes on their right of way.

The highways are there.

Of course, the truckers pay gasoline taxes, tire taxes, so forth.

On the other hand, they add these all up, and you will find from these statements that I've prepared that there's some inequities here that just have got to be corrected.

Mr. Secretary, let me ask you one question.

I read an article last week where they say 40% of the freight is non-compensatory.

Is that so?

I don't think it is correct, but they are carrying a hell of a lot of stuff at rates which are below what it cost them to carry it.

Well, I was shocked.

A freight train is more expensive than 27,000.

They put out, the Department of Transportation put out a list and they said, let's go ahead and give you the products and how much they're losing.

I mean, it was their publication I got the information from.

They put it back in the scenario, so that's another problem, too, when you have a history that's regulated like this.

You get some of these, probably rates were set to years ago, and the situation has changed rapidly.

They aren't trying to be as questionary as they're being able to charge the traffic from there.

Because somebody else is going to be there to carry them.

I didn't mention barge lines.

Of course there are.

We just finished a new one down in Oklahoma.

Right, that'll go all the way down.

And there's a lot of freight going on those things.

The trucks, of course, will carry a lot.

But the part of this, in working with railroads, we're not trying to hurt anybody else.

What is best for all is to have a healthy industry and all compete and crack at it.

And I think the railroads will do well in those circumstances.

Railroad has much to offer, and the others just cannot.

And, of course, you work with the others, too.

You've got to work with the truckers and the licensees.

Secretary, you had some figures to do with the anticipated increase of body-in-body freight during the next 10 years.

This is very interesting.

That is why none of the transportation boats need to worry about, well, I have enough business.

But during the next 20 years, as I indicated to you, Mr. President, we are going to have to double the transportation capacity of this nation.

Just speaking of that.

Is that speaking of the Freight Ambassadors?

The Freight Ambassadors.

Overall, a double from the founding of the Republic to the present time, or until about a year ago.

In a 20-year period from a year ago, we're going to have to double the capacity.

Now that doesn't mean twice the number of trucks or twice the number of railcars and so forth, but double the capacity.

And this meeting is going to be a tremendous amount of business.

The reason that your time is still up there, even though you've dropped 20% of the total volume, is because of the increase in demand or the increase in population.

And there's just no question in my mind that there's going to be more than ample room.

Just take it one thing at a time.

The number of automobiles that used to be carried, that you and I used to see on none of the trucks,

Today, 76% of those automobiles that leave Detroit, and automobiles pass, travel on railcars.

You know how long it took them to figure out, look at that truck along the right-of-way, how to put it on railcars?

About 30 years.

I know it took a long time, but it's worth it.

In fact, it did.

And how do you fix none of that traffic?

Well, where did that start?

It was put, too, in an old automobile car in Woodland.

I remember when they got the first automatic thing to put forward, they thought it was going to town.

Then the convoy started having it, and it took them 30 years to figure out how to put that on the platform.

About five years ago.

That's been a big hump to them.

That's the thing, you see, there must be a number of other areas, technically, that speak...

And unit trains, coal trains, never uncoupled from them.

They let them put in these slush lines, coal.

And then they got them in, they gave them a rate where they could haul cheap old railroads.

But they let them build them first.

They forced them to come down where they could haul them.

My house was lifting when I was down in Florida recently.

And it's just all been a different way.

They just picked that stuff up.

But that's all ready to go.

But that saves too much on the theory, too, you know.

Yes, sir.

That kind of thinking really has to be done in this industry, too, as well.

And I guess it is being done by some.

I don't think actually, sir.

The Western roads are...

They're very shabby.

They're a little much of a haul.

They have longer haul as I did.

They're a little more aggressive.

They're pretty aggressive bunch out there.

Mr. President, I'm raising a very interesting point.

Come on, let's go about the rest of your money.

You used the southern region as a plan.

Yeah.

They captured it.

That's the reason I didn't know what you understood.

I wouldn't want to put you on the spot, but if we were going to suggest a modification of the regulatory bodies, wouldn't it only seem logical that the railroad industry should stay in the railroad business rather than give in to the conglomerates?

We're speaking of some of the more affluent roads in the West.

The Union Pacific is the latest one that I know of.

It's broadened out.

CNN and W practically went broke getting into the conglomerate field.

And I agree with everything that's been said here as far as perhaps the Interstate Commerce Commission hasn't been too restrictive in some of their regulations.

But by the same token, are we going to permit the railroad companies to invest their money in everything that comes along from hot dogs

And then blame it on the railroad operation and take it out on the employees because they've got to say, that's exactly what's happened on the Penn Center today.

Now we've just taken the engineers and we fight to their satisfactory agreement.

We didn't have to threaten them with this walkout.

We perhaps didn't get everything we wanted.

I'm satisfied they didn't get everything they wanted.

But the point is,

We sat there with representatives, dealing with some of those roads, and the one road that held up and is holding up all the rest of these fellows in the fed center, now that we got a settlement with them, they don't even know whether they're going to be able to live.

That's why I think we're going to consider regulation as all you're going to have to get away from this permissiveness against the

The railroad director has the right to get into everything under the sun.

Well, that of course is a very, as you would well know, is a very broad subject that is very vigorously debated within the business community as well as in the nation at large.

I personally would not want to judge any one of them on the basis of this thing.

What we really have to do is to evaluate each segment of that business to see whether it gets paid or something else is dragging.

Mr. President, I wouldn't be doing my job here if I didn't insist that you get on there.

But I do want to ask my mother, Woody, to please look kind of at these videos.

We always do some visitors around the stable, but I'd like to tell you one thing.

I noticed you mentioned engineers.

And I do follow my biography to the most of this.

When I was a kid, I grew up, there was only one little track I ran by on a train a day.

My father was a streetcar motorist.

That was his first job.

And then I remember he came on in Columbus, Ohio, and then went out and worked for the red cars in California, you know, before they, you know,

It used to be called the City Collective here, the City Collective, but now they're out of business, of course.

So, yes, that train used to go on, and he used to go, he was part of the train.

So, my ultimate desire at that time was to be a railroad engineer.

I never made it, but... You see, I might have been a member of UU, but I'm proud to say that I do not.

We have a little, I do my best, we have a, I'd like to leave each of you, if you have one, you can take another for your secretary or somebody.

This is a, these are the presidential couplings, they basically are,

reproduction of the presidential seal and company farm.

And I always make the point when I have a bipartisan or at least one of those nonpartisan that you can all wear these because they do not have my name on them.

And wives can do likewise with this little pen.

It's a rather attractive little pen.

It's a bow, as you'll note, a bow with the presidential seal attached.

Now, if you, I can't tell you all, I don't, I haven't checked this year, but I don't know whether you all have wives, but if you give them to somebody other than your wife, be sure to tell her.

I was just re-elected and I got a $15,000 a year salary increase.

I gave away trinkets very similar.

You could probably afford it.

I just want you to know that despite the fact that these look very, I don't know, expensive, that they're not.

You don't have to report them.

So we appreciate you coming in.

The Secretary actually, in the field of transportation, is a great advocate of the air roads and Jim Hodgson and

I think we've got there two of them that really understand the reality.

Bill has been in, I must say, not just an interview, I don't know how he has been.

I think I got him working on everything from steel to railroads to lobshock to, and also, Bill was really the major contractor I involved in this, working on the poster mask.

We've had to do a great job here.

I want you to know that these folks have my confidence in them.

The back pocket.

I think they're interested in your stress, but at the same time, we appreciate your help in trying to keep this industry healthy.

Let's not have those memberships go below 600,000.

We'll send you a copy.

Thank you.