This weekend on the presidency, author sen. Warren bingham discusses his new book, George Washingtons 1791 southern tour. It was nearly 1900 miles and it took nearly three. 5 months. Three and a half months. The capital was in philadelphia, and washington held district to the west because he knew it was , and alsohallenging because they were the most reluctant to join the union. They didnt really want to commit to the union, or the confederacy. Northolina and carolina has a history of wanting to be off to themselves. We had the shadow of virginia and South Carolina surrounding us, and those states poked fun at us. We were slow to move. We were not a united state in north carolina. We were slow to join the union, but we signed the constitution in november 1789, and were then cleared by washington to come see the southern states. Carolinas,ginia, the and georgia. Program hereentire on American History tv, only on sees and three. Cspan3. Coming up next on American History tv, rush loving, jr. Talks about the rise and fall of the Railroad Industry. He is the author of the welldressed hobo the many wondrous adventures of a man who loves trains. Mr. Loving is the former editor of fortune, and former Business Editor of the richmond timesdispatch. In this event, hosted by the Virginia Historical society, he errors shares anecdotes from his experience covering american railroads since the 1960s. This is just under an hour. [applause] mr. Loving todd, that was very gracious of you. Thank you very much. Being a journalist in my day, we were all trained rigorously to be fair, to be balanced in our reporting, to be accurate, and always to be thorough, and that was great. That last item proved to be very important, because i got a lot of good stories just because i was thorough and asked the extra question, or looked into the extra fact. It is like these two women who ran into each other in heaven, and both were quite surprised to see the other. [laughter] mr. Loving one of them says, well why are you here . , and the other one says, i froze to death. The first one says, it sounds awful. She says, no, it was not too bad. It was awfully cold for a while, but then i fell asleep and i died. But why are you here . The first woman says, well, i was sure my husband was cheating on me, so i went home early to catch him, and found him sitting in the den reading a paper. I knew there must be a woman in that house, so i started searching. I looked in the basement, the first floor, the secondfloor, even the attic, and the more i looked, the more worked up i became. I got so worked up i had a massive heart attack and died. [laughter] mr. Loving well, the second woman says, it is too bad you did not look in the freezer. We would both be alive. [laughter] mr. Loving the fellow who puts together these lectures is named graham, on the staffer here at the society, and graham has a title that means a lot to me he is the editor of the societys quarterly magazine. I was privileged to know virginius dabney. V. Contemporaries called him for the rest of us, it was mr. Dabney. I will never forget the things i learned writing editorials on occasion for him, and just serving with him. The most notable was back in the mid60s. I was a Business Editor. I wrote an editorial about the penn central merger, which was then pending. I referred to the chairman of the pennsylvania railroad, stewart saunders, as a former virginian. Mr. Dabney came into my office the next day and he said, rush, there is a good editorial. I am going to run it, but you must understand one thing, when you were born a virginian, you are always a virginian. ] [laughter] mr. Loving and coming here to the Virginia Historical society brings back many fond memories , because when i was a senior at the university of richmond, history major, i researched my senior thesis here, and won a prize for it. When i was a young reporter at the timesdispatch, i covered the Virginia Historical society, as well as the Virginia Museum that store, and the civil war centennial, which was raging across the state then. Journalists back in those days , in the 1950s and the 1960s, were unique people. They were irreverent. They were just incredible, bright people, and one of the young reporters i came to know and really admire, and have an affection for was stewart brian, who todd mentioned just now. Stewart was speaking a couple of years ago at the cosmos club in washington, and i introduced him. He was talking about the current state of the media, and he says , when rush and i were young reporters, we all drank, smoked, and we all chased other mens wives. [laughter] mr. Loving well, i have to take one exception with him on that i did not smoke cigarettes. Just a pipe. [laughter] mr. Loving stewart became an exceptional publisher, as he was an exceptional reporter, and i think all of us miss him terribly. Back then, though, those earthy, creative, young reporters were cynical, and they turned out top stories stories that really , mattered and were balanced. And during all of that time, i was enamored with railroads as a child, but i find myself even more enamored with them, more intrigued by them, particularly economics of railroads. When i was small, my grandfather took me on an overnight run. He was a conductor on the southern. He took me on an overnight run outchmond to dirndl, of richmond and that is when i , really got hooked. Then, as a Business Editor and an associate editor of fortune later, i was writing about railroads, among many other industries, and came to really, as i say, love them all the more. I came to know it was a great life because i was doing the two things i love writing and dealing with railroads. Those railroaders included a lot of fascinating people. They were people like hayes watkins, who founded csx. People like abel herriman, who before he joined the roosevelt administration, went to moscow for fdr. He was the chairman of the Union Pacific. In fact, he created the streamliner train in the mid1930s, and he developed sun valley into a major resort area in the west to attract passengers for the upa. P. U he told me in his later years that all the things he achieved in his lifetime, those were the two he was proudest of. This was a Railroad Industry indeed it was the source of a lot of creative achievements. There were railroaders other than herriman and walk ends watkins, like Alfred E Perlman who turned around , three railroads in his lifetime. One of the Great Railroad ceos of his day. I came to meet some other nonrailroaders who were on railroad boards. One was baldy baldwin. Who is a member of the ward of the Virginia Historical society. Baldy, as a young man, he used a Railroad Office car, or business car to go around and try about , enough business for his bank to turn a small Baltimore Bank into one of the most powerful Financial Institutions in the east coast. A true achievement. I found, too, that the best people to run railroads were those that loved trains and love their work. Many of those executives were operations people and marketing people, but there were also some finance people like watkins, and some lawyers who were good. Now, i like lawyers. [laughter] cant help it, because my family is infested with them. [laughter] mr. Loving one of them, my brotherinlaw, who is a corporate attorney in martinsville, thanks i should be a redneck like his friends, and for my 75th birthday he gave me a motorcycle helmet, and on it were decals. 99 of allid lawyers give the rest a bad name. [laughter] mr. Loving but another one said having sex with a younger woman can be fatal, but if she dies, she dies. [laughter] mr. Loving even my wife is a lawyer. She is a trial lawyer, not a corporate lawyer, and the judges in baltimore tell me she is one of the best in the state. Many of her clients, unlike corporate clients, she is defending for charges, like, kidnapping and murder. And because of her work, she has to carry a sidearm. Now, when she got the permit to carry, the state Police Sergeant whov vetted her called me. He finished everything, but had one followup question. I answered it. We were getting ready to hang up , and he said mr. Loving, i have one piece of advice for you do not monkey with her. I have seen her targets. [laughter] mr. Loving now some of those lawyers in the railroad business, lawyers in my book, some of them, like bob claire, who created norfolk southern, his brother graham, were exceptional railroaders. I found that some lawyers that headed railroads were not up to the job though. By the mid1960s, when i started covering the business, the industry. The Railroad Industry was in grievous trouble. For a century, the railroads had been a key element of culture and economy in virginia, and the economies and cultures of many states other than virginia. It is interesting. Most people now are not aware of it, but the railroads created america. We would not have big steel without railroads. We would not have the big oil companies. It took trains to make those industries work. It was fascinating how the railroads developed the west. They brought passengers in, and actually recruited them from europe settlers. Brought them out to the west, they set up homesteads, and then the railroads hauled their products produce and cattle , to the east, to the markets. The railroads did very well over the years, although there were ups and downs. They survived depressions, crashes, and all of that, but it was and at the time of world war ii, they were in their glory, really. The richmond, fredericksburg, and Potomac Railroad in 1942 was moving 33 passenger trains a day. Plus specials like troop trains, and extra sections. It was carrying numerous freight trains. As a boy, i used to stand at the crossing and watch those trains go by. There were trains loaded with tanks, trucks, jeeps for the army. Steel for the shipyards. Trains of refrigerated cars full of food and meat, vegetables. And it was a fascinating thing to see, very stirring. The railroads then had a monopoly on innercity transportation in america. It was not until after the war that that monopoly began to fade, and the railroads began to feel the pinch, and some started merging in the hopes of making savings on duplicating costs. Sometimes it worked, sometimes it didnt the most notable case. Didnt. The most notable case of a merger that did not work was penn central. Stuart saunders was the chairman of until almost the last day before the company went into bankruptcy. And he lacked a feel for railroad operations, but saunders had a unique sense of public policy, and after his ouster from penn central, i met in great secrecy with saunders one morning at the Berkeley Hotel in new york, and he gave me his side of the bankruptcy story. He told me the biggest problem penn central and other ailing railroads had was overregulation. At first, i dismissed the story as just an excuse for his own shortcomings. But two years later, i was having dinner in new york one evening with graham claire, who was then the chairman of the southern, and at that point in time, there were five major railroads in bankruptcy in the northeast, penn central being one. There were railroads in the midwest that were failing, and graham and i began to debate what to do to solve the problem. Now, graham was a disciple of protege of dean has since in. Ha dean hatchers and tcherson. Excuse me. And a true democrat. Graham believed the government was the answer to problem. I tended to be more skeptical of government, and i started searching with graham for what is the answer, and of course, he was saying the government could fix it. I felt politicians would just make matters worse. So afterwards, i began to think about all of this. I began to research what could be done to solve this problem. As i began researching, i thought about what Stuart Saunders had said. And i found that saunders was deadon right. Since world war ii, the railroads had been struggling to compete. Airlines had stolen away their passengers and their lucrative mail business. Trucks were hauling now some of their most profitable traffic. The interstate Commerce Commission was the undisputed villain. The icc bent to every pressure that came from congress from shippers, the unions, from little communities along their rightsofway. And the commission was tediously slow in granting rate increases to compensate for the increases in labor costs. It took months to raise rates it rates. It also took months to approve mergers, which were then very popular because of the state of the roads. The allen of chicago, and pacific was a good case to take a look at, because the rock was in serious trouble. It had proposed to the icc that it be allowed a threeway merger with the southern pacific and the Union Pacific, and it had taken 11 years for the icc to approve that merger, and even even then, with conditions. Even then, about that time, the rock island was bankrupt and going into liquidation soon after. I put the findings of all of that research into a fortune piece, and a few months after the story came out, congress began to act. To my amazement, graham claytors faith in the government turned out to be wellfounded. Congress and the white house provided a really sound solution to the bankruptcy problem. They created a special organization that pruned off the nonprofitable tracks, stations, services, and merged the remaining into conrail. Conrail was a dominant railroad in the northeast, of course, because of that. But unfortunately, it failed to make money, and the government had to subsidize it, much to the chagrin of the office of management and budget, and the finance committees of the two houses. After my study came out after conrail was created, congress began to talk about deregulating all forms of transportation, starting with air and cargo. And this movement, as it went, stirred more people to talk about ending regulation of railroads. The conrail management also wanted railroads deregulated because they felt that would turn around conrail. That without all of these onerous restrictions, they could finally make money. Well, early 1979, congress was drafting a bill called the staggers act to deregulate the railroad. I went to work in the white house for a year that summer, and soon discovered that the draft of the bill that by then existed had a lot of new restrictions in it, a lot of new regulations that would have bankrupted the entire industry. And it is funny. I discovered later that the problem was burlington northern. The bn had gone into the coal business about 10 years earlier, and the chairman had set extremely low rates. The rates were so low, they were not making money on the moves. Rates did not cover the deterioration of track, and all of that. So the chairman, being a man of great ego, and a very brittle ego, and i love him but that was his shortcoming, resisted the warnings of the eastern Railroad Ceos who hauled coal, paul told , this is notld him a good idea. You are not making money. You might think so. Lou, was resistant to the point of getting pretty antagonistic to those who gave him what they thought was good advice. In one case, he wrote a scathing letter to the chairman of jacksouthern, who was the sort of guide to where that sort of thing rolled off, but it proved a point to everybody, that lou was just daft to reality. Well finally, his marketing people convinced him that they were indeed losing money, and indeed they needed to raise their rates and raise them pretty steeply. Well, when they jacked up those rates, the utilities all over the midwest and the southwest who were buying bn coal went into well, raised hell is what they did. [laughter] mr. Loving these people were led by a little lady in san antonio, who is the mayor down there named leah cockrell. She was short, a little rotund , very grandmotherly, big glasses. Well, she didnt know anything about the icc, but she knew a lot about the politics, and about the congress. So, she proceeded to go to the halls of congress and start twisting arms, and she got other utilities affected to do the same thing, and pretty soon, they were rewriting the staggers bill. They were putting all these amendments on that we are going were going to choke the railroads. Well, i never i worked for jimmy carter in the white house, and i liked him, but i never thought he was very decisive. But this time, he and his legislative staff really came through came through big time. They went to congress, they worked with the leaders of they got the bill redrafted, and in early 1980, carter signed the staggers act. Real majorlast, thing he did before he was defeated that november. Regulation had been so pervasive, it took another 10 years for the railroads to adjust to the new free market. The watershed came in 1979 when 1989, when a trucker named johnny brian hunt took a ride on a santa fe intermodal train. The big potential moneymaker that we had all seen in the Railroad Industry was with the intermodal, the movement of containers and trailers. But nobody seemed to know how to unlock the market. A fellow named mike thought that he knew. And his idea was instead of having all of these trailers and containers delivered to the railroads through a middleman, a middleman who got most of the profit, the railroad should form a partnership with the truckers. And thereby split the revenue and start making some money. Well, the Marketing Department at santa fe was deaf to those ideas because he wasnt one of them. But then haverty became president of the santa fe. [laughter] mr. Loving and he had his business car hooked to the back of an intermodal train, but right jb hunts trailers in front of it and invited him , to come along to kansas city from chicago. Along,y were riding staying there in the business car, looking at the trailer on the flat car in front of them. Hunt was amazed, because normally his trailers were bouncing along the highway on those potholes, these things was just thing was just sitting there at 60 miles per hour. He looked at the interstate parallel to the tracks