Can Do--Privately

The Providence & Worcester Railroad is a tiny (50 workers, 75 miles of track) Rhode Island freight hauler that has been beset by more problems than "the little engine that could" of children's fiction. In the past ten years, the giant Penn Central has tried to squeeze it off the tracks, it has lost seemingly do-or-die battles before both the Interstate Commerce Commission and the U.S. Supreme Court, and it has had to tough out an uphill struggle to survive on its own after years of being operated under lease. Today the line appears to be chugging toward the same sort of triumph enjoyed by the children's little engine. The Rhode Island Department of Transportation has in effect recommended that it take over all freight service in the state from both the bankrupt Penn Central and the Federal Government's planned rail corporation, reversing the trend toward public absorption of private rail service. In addition, Massachusetts officials are talking to executives of the line about extending its operations into that state.

From 1892 to 1967, the P & W was leased and operated by the New Haven Railroad, but after the Penn Central acquired the New Haven in 1966, it instructed its new subsidiary to cancel the lease because the P & W did not earn enough money. P & W President Robert H. Eder, an ex-paratrooper and Harvard Law graduate, fought the move, but the ICC decided in favor of Penn Central, and the Supreme Court upheld the decision. The P & W got bank backing and filed a petition with the ICC to operate independently, but the Penn Central about-faced and tried to block the move, claiming that the P&W lease was too valuable to let go. Shippers nonetheless backed Eder's P&W, and the little railroad began independent operation in February 1973 amid widespread predictions that it would soon go broke.

The naysayers did not take into account Eder's vision and nerve. He struck up such a close friendship with United Transportation Union Leader George Cahill that Cahill now sits in on P & W board meetings. Eder pays a flat, guaranteed annual wage of $16,460 to each of his trainmen, $4,640 a year better than the Penn Central pays, and he plans equal bonuses, regardless of salary. Eder, who earns $60,000 a year, will collect no more than an engineer.

The P&W can pay such high salaries because of its efficiency. The union has permitted it to cut train crews to three men from the four-and five-man crews that it insists on maintaining on other railroads. For the quarter ended June 30, the P & W earned $78,637, v. a loss of $182,297 for the same period last year, which was its first complete quarter in operation. In the deficit-ridden world of Northeastern railroading, that performance has been enough to attract the favorable attention of state governments. All of which goes to prove, perhaps, that rail unions are not always obstructionist, and that private management has a future even in Northeastern railroading. The sort of naive triumph enjoyed by the Little Blue Engine when it rescued the happy train sometimes approaches reality.

This file is automatically generated by a robot program, so viewer discretion is required.