Another economic truth is that the unit cost of production is usually lowest when the output is great. Quantity production is the goal of practically all successful manufacturing enterprises. Automatic and near-automatic machines replace the human hand. One person by the aid of mechanical and electrical devices produces as much in the same time as could a score or even a hundred without such help formerly. The chief reason why quantity production is cheaper than individual production is that it allows for a division of labor, a separation of the preparing processes into several operations or occupations. Growing the grain, transporting it to market, grinding it into flour, baking it into bread, and selling the bread, indicate some of the several occupations, that arise in the simple preparation of “our daily bread.” The meat-packing industry affords an excellent example of the principle: The animal is surveyed and “laid off like a map”; and each workman as the carcass passes him has one operation to perform. One man sticks the pig, another scalds it, another pulls the hair from a particular portion of the body, one cuts the slits for the gambols, another inserts the sticks, still others hoist the body to the hanger, and so on as it proceeds along its course scores of persons are each doing a very limited portion of the work until the entire animal is prepared and packed for shipment. The workmen are classified and the highest paid are put to the most delicate or important parts while for the less delicate and less important duties the pay is very much lower. But each workman having only a small variety of work to perform soon becomes adept and can do a much greater amount than if he attempted the entire round of labor. The building of automobiles wherein materials start from different places and eventually coalesce as they proceed on their journey through the shops by each workman as they pass adding one thing or performing one operation until the whole emerges a complete machine ready to run away under its own power, is another case in point.
Mr. James J. Hill, when president of the Great Northern, Northern Pacific and Chicago Burlington & Quincy railroad companies, applied the principle of quantity production to railroad transportation. Under his supervision locomotives and cars increased in size; this necessitated heavier rails and more substantial track; trains were not allowed to leave the terminals until a full load had been accumulated; regular schedules were of course done away with except for passenger and a few local freight trains. Other trains were to be run only at the full capacity of the locomotive. This was not conducive to speed, but the unit cost of hauling a ton of freight one mile was very materially reduced. The same crew with comparatively small increase in costs may operate a train of many cars about as easily as one of few cars.
The same principle underlies the efforts of motor transport companies. They are increasing the size of trucks and loads to decrease cost. They have not used discretion, however, in this and their heavy trucks have ground to powder high-cost roadways with the result that public sentiment is reacting against them and regulatory laws are being passed by many legislatures.
Increasing the size of the plant, train, or truck will not bring economies unless it can be run at its capacity load, consequently when the trade or traffic will not utilize full loading a smaller plant should be adopted. To run a 12 horse-power gasoline engine to turn a 11⁄4 horse-power washing machine motor is no more foolish than to run 100-car locomotives to pull 2-car trains, or 7-ton trucks where the load never exceeds 2 tons, or 7-passenger automobiles with 1 or 2 passengers. The contention is well founded that western railroad methods are futile on New England railroads[160] and that if prosperity is ever to come to New England roads they must reduce their rates and rates can only be reduced by making the size and number of cars commensurate with the character and amount of traffic. In England where shipping distances are comparatively short the small van or car and quick deliveries have been evolved. In well-settled portions of this country, as in New England, similar practices might well be adopted that the railways may not be entirely eliminated and the public forced eventually to resort to more expensive transportation methods when both direct and indirect costs are considered over the public highways.
The railroads are also complaining that the automobile is cutting into their passenger earnings. This is no doubt true. What else can be expected with approximately 11,000,000 machines now in operation? Thousands of tourists are daily traversing the country. They find the outing pleasant and when several occupy one car it is cheaper than railroad travel. Free camping along the way avoids hotel bills which have grown inordinately during the past few years. If these rates continue, simple inns as in the olden days may grow up and cut into the business of the high-priced hotels. Lower charges for both railroads and hotels will mitigate but not entirely eliminate the automobile competition. The motor car is here to stay and automobile travel will continue to increase. It is no longer a theory but a condition which exists, and the railroads and hotels should adopt the policy of the wily politician,—who said, “If you can’t lick ’em, jine ’em,”—meet the automobile half way and make the most of it.
If predictions of those in close touch with the automobile business be any criterion the railroads will feel the influence of the motor car more and more. H. F. Blanchard, writing in Popular Science Monthly, January, 1923, p. 26, claims that the $150 passenger car is in sight, and that the “saturation point” which has been a worry for years has not yet arrived and will not if the lowering of prices keeps pace with increased production. It is pointed out that the production of automobiles and trucks is still increasing. The 1922 output (2,577,220 machines) is more than the 1920 output (2,276,000) and these are bought by the public as fast as made. Mr. Durant, a prominent manufacturer, is quoted as saying that: “The development of a cheaper car than we now believe possible is only a question of the development of the highways. Millions more of automobiles would be in use in America to-day if the conditions of our highways permitted. When our automobiles can be built to run on highways that are on the average as good as our city streets—and this is bound to come sooner or later—we shall have lighter, better and far cheaper cars. And the time is not far distant.”
In Roger W. Babson’s weekly comment dated September 30, 1922, we read:
Railroads have already felt the effects of pleasure automobiles, but they have not really begun yet to feel the effects of auto trucking. The trucking of goods within a radii of 50 or 100 miles has only begun and this radius may readily be extended to cover 200 or 250 miles. Transcontinental systems ... have nothing to fear from trucks. In fact the trucks may help them. Other roads [those intermediate in length] can survive and perhaps profit under this competition. With roads such as [short-line roads] this is not true. These roads are bound to suffer far more from the truck than they now think possible.
We shall live to see great highways built by the state exclusively for truck use. Railroads are destined ultimately to lose all of their short haul business and hence the roads which are in comparatively small and compact territories are sure to suffer. The only hope for some roads ... is to sell certain of their rights of way to the state in order that the tracks may be removed and concrete highways laid in their place. Many roads have parallel lines to-day under their control. The wise railroad company will develop one of these for itself and will sell the other at a good price to the state for a concrete truck highway.
If the steam railroads are feeling the competition of the motor, the interurban trolley lines and the street-car companies are harder hit. The interurban lines are most of them short and depend upon local traffic. Their cars stopped at any cross-road along the way to pick up passengers and freight. But the motor transport is going them one better; it picks up its load at the front gate, saving the trouble of even a short walk, or in the case of freight, of loading and unloading and a short haul to the track.