All Commentary
Monday, January 1, 2001

Bill Brosnan: Railroad Free-Marketeer

Charles Morgret’s books on railroads include the two-volume Brosnan: The Railroads’ Messiah (1996).

Dennis William (Bill) Brosnan (1903-1985) was a lifelong railroader. He began as an apprentice track engineer and rose through the ranks to become president and chief executive officer of Southern Railway Company, now part of Norfolk Southern Corporation.

In the course of his 46-year career with Southern, Brosnan, more than any other individual or group, must be credited primarily with keeping the U.S. railroad industry under private ownership and operation and out of the hands of government, unlike virtually all the world’s railroads in his day. He did so in three principal ways.

First, at a time when railroads were among the least modern and most labor-intensive of all industries, he led a massive technological revolution that converted them into one of the most modern and least labor-intensive of all industries. As a key element in that revolution, he built the first of what has become a stable of specialized freight cars designed to meet the varying needs of shippers, instead of forcing them to adapt to the standard railroad boxcar.

Second, by winning a key five-year battle (the “Big John” case) over the Interstate Commerce Commission (ICC), which had closely regulated railroads for nearly a century, he broke the back of government regulation of pricing, thereby enabling railroads to exercise more effectively their low-cost pricing advantage over other modes of transportation.

Third, he established on the Southern Railway the first modern marketing department, which today is a hallmark of railroad sales and services.

Trains magazine of January 2000 ranked Brosnan as the top railroad man of the twentieth century. In another leading trade publication, Railway Age, December 1999, he heads a list of 16 “outstanding railroaders” of the century.

Trains editors said of Brosnan: “Quickly and concurrently, he mechanized track maintenance, centralized car and locomotive repair, built automated hump yards, and consolidated operating regions and departments. If a machine to install crossties didn’t exist on the market, he and his tinkerers invented one and built it in the company shops.” Railway Age said “he invested in the first lightweight, mostly aluminum 100-ton coal hoppers, 100-ton ‘Big John’ covered grain hoppers, centralized computing, radio-controlled helper locomotives, and microwave communications.” Pointing out that Brosnan was Railway Age‘s “Railroader of the Year” in 1964, the editors quoted Newsweek as saying that Brosnan “changed the economy of the South and led the lethargic railroad industry in adopting modern methods.”

Recognition of what Brosnan meant to the railroad industry is thus well understood and fundamentally accurate. What is perhaps less understood and appreciated was his equal dedication and role in preserving the nation’s capitalist system and fighting efforts to undermine it. His prime contribution in that regard lay in providing the leadership that kept railroads under private ownership. During the Great Depression of the 1930s and before World War II, they were in grave danger of being taken over by government. In the early years of the war, and before, calls for railroad nationalization came from high-ranking government officials up to and including cabinet secretaries and Vice President Henry Wallace.

D. W. Brooks, then the executive vice president and general manager of the Cotton Producers Association, in Atlanta, said in 1967: “Except for the fact that Mr. Brosnan came into the railroad industry at the critical time, there was a good chance that all railroads would have moved into government hands.”

Fire Chief Father

Brosnan’s home environment in Albany, Georgia, was more government-oriented than business-oriented. His father, the first Dennis William Brosnan, was Albany’s internationally renowned fire chief during Bill’s early years and through college. It is perhaps not surprising therefore that Bill’s first job after college was as an engineer with the Georgia Department of Highways. Although the job lasted only three years, until 1926, it was long enough to convince him that he didn’t want a government career. He would take his chances in private industry. He accepted a job as student apprentice engineer with Southern Railway, a company then of some 8,000 miles of railroad, serving primarily the 13 southeastern states.

Leaving a secure, well-paying job with the highway department to take an apprenticeship with a struggling railroad seemed to Bill’s family and friends to be a step backward. A couple of years later, when he still had not received a promised promotion but instead had suffered a 50 percent reduction in take-home pay, their apprehensions grew.

The pay cut was not the result of a rate cut or a demotion. Rather, it was the result of declining business and revenue on Southern, which forced the company to spread the available work by halving the paid working time of the employees it wanted to keep.

The policy succeeded in saving jobs during the depression that was then beginning. But in Brosnan’s case, it meant having to get by on $50 a month instead of the $100 he had been getting at the highway department and initially at Southern.

The work that Bill was required to do with Southern was also far more difficult and physically demanding than the job he left. Moreover, on the highway job he had supervised the work of others. As a student apprentice on Southern, he was required to do much of the pick-and-shovel labor of repairing and maintaining the track and roadway himself.

From that physically challenging experience, Bill learned what it was like to break loose a 200-pound crosstie that had been in track 40 or more years, with only a sledgehammer and pick to assist him. There, too, he came to realize that there had to be a better way to do such work—and that it would be up to him to find it.

Initially, Bill’s apprenticeship with Southern was to last only six months. After that, he was to be promoted to assistant engineer. But as economic conditions worsened and jobs became harder to find, promotions were halted and the period of apprenticeship lengthened.

Slowly, almost agonizingly, he was finally allowed to assume minor engineering responsibilities. He started as a rodman, which on the railroad meant holding the surveying pole while his partner did the sighting. This was followed by promotion to foreman in charge of a section gang of five or six men who repaired and maintained a small section of track.

Despite his deep disappointment and impatience with his snaillike progress, Bill by then was thankful to have kept his job when so many others were let go. But the longer he worked with his hands—still using only the same basic tools as when railroads began a century earlier—the more he became convinced of the need for bringing railroads, a basic industry then as now, into the twentieth century technologically.

Certainly, he reasoned, the opportunity was far greater on Southern than it would have been at a government job run by bureaucrats and vulnerable to the winds and whims of political change. Therefore, he tackled the job with the vigor of one who sensed that only by experiencing the problems firsthand would he be able to find better solutions.

Not until October 1931, two years after the stock-market crash and six years after his first job with Southern, did Bill receive his first real promotion. The title change was only from assistant engineer, maintenance of way, to junior engineer. But it restored him to full-time.

That was the good news. The bad news was that Southern at about the same time had found it necessary to order a 10 percent pay reduction across the board. It was but the latest in a series of belt-tightening measures that had been forced on Southern’s management by a severe business decline—which was destined to continue for the rest of the decade.

In just three years, from 1929 through 1931, Southern’s operating revenues had plummeted by nearly one-third. Net income fell from $18.1 million in 1929 to a deficit of nearly $6 million in 1931. A year later, in 1932, the company’s net income deficit soared to a record of over $11 million, a staggering sum at the time for a company its size.

Bankruptcy Threatens

Threatened as never before by the stark specter of insolvency, Fairfax Harrison, Southern’s president of 16 years, gave an order that was tantamount to preparing to “abandon ship.” He ordered his attorneys to prepare bankruptcy papers, which he held in his desk drawer expecting any day to have to sign and file them.

Nor was Southern Railway an exception. Among railroads generally, the level of business between 1929 and 1931 fell by one-third and net income plummeted by over 80 percent. In 1932 the entire industry reported a net income deficit of $121.6 million, again a staggering figure at the time.

The railroad industry, including Southern, slashed employment by 38 percent, adding over 600,000 persons to the swelling tide of those seeking jobs. Even the employees who were fortunate enough to keep their jobs often found their paychecks cut by ten percent or more for prolonged periods, for which they were unwarned and unprepared.

For most of the 1930s, as for the five years of World War II that followed, there was little opportunity for Bill to do more than work as hard as he knew how in middle-level supervisory jobs. His first job as a division superintendent, at Selma, Alabama, did not come until October 1938. After that he was moved, still as superintendent, first to division headquarters at Macon, Georgia, and in February 1943, to Birmingham, Alabama, then the most critically important division on Southern’s system.

Because of its strategic location as the southernmost division of Southern’s system connecting New Orleans and Birmingham, the importance of the Birmingham division was never in doubt. But with the entry of the United States into the war, it was almost immediately called on to handle, in addition to its normally heavy volume, the millions of gallons of oil traditionally shipped daily by tankers and barges. That water movement from the Gulf of Mexico to the manufacturing centers in the northeast had been halted by the armadas of German submarines then roaming at will in the coastal waters from Florida to New England. As the division’s newly appointed superintendent, nothing in Bill’s work was more important than to keep the oil flowing steadily northward by rail.

His tenure in that sensitive assignment lasted through the end of the war in August 1945. Three months later he accepted assignment for a year as chief engineer, Western Lines, with headquarters in Cincinnati. It was in that job that he began the work that ultimately changed the work of track construction and maintenance from hand labor performed by armies of workers equipped only with picks and shovels to the highly mechanized system used by all railroads today.

But it was not until 1947, when Bill was promoted to general manager, Central Lines, in Knoxville, that he began what became the second of his major technological changes. That was automating the work of freight car classification and movement in freight yards and terminals. As with the work on track, it too had been a function performed largely by human labor operating thousands of switching locomotives.

In 1952, Bill was named vice president, operations, a post he held for eight years. In that period, he launched many additional technological changes that, like mechanized maintenance and automated freight yards, were quickly embraced by the railroad industry. Among these were welded rail, microwave communications, computerization of railroad operations, modern assembly-line shops for freight car repairs, containerization, and specialized freight cars built to meet customer needs.

“Big John”

One of the new specialized freight cars became the focus of what would be a five-year battle before the ICC and the U.S. Supreme Court. The outcome of that battle led ultimately to deregulation of railroads and the restoration of competitive rate-making. The car was the renowned “Big John” for hauling grain.

Before “Big John” in the early 1960s, grain was carried in standard railroad boxcars, most only 50-ton capacity and as ill-suited for carrying grain as they were for loading and unloading it. Bill’s “Big John” car revolutionized the hauling of grain. Like a bathtub, it was loaded from the top and unloaded from the bottom. And because of its lightweight aluminum, stainless-steel construction, it could be double the capacity of the standard box car.

With “Big John,” Bill was able to lower Southern’s freight rates on grain by 60 percent. But doing so required approval by the ICC, which since its beginning in 1887 had viewed its primary role as protecting other carriers from railroad competition. It prohibited the rate reduction.

Bill finally prevailed after five years and two trips to the Supreme Court. By winning, he not only restored free pricing to railroad rate-making, but also began what finally ended anachronistic ICC regulation itself.

By leading the technological and managerial revolutions that enabled railroads to remain under private ownership, Bill made his most important contributions to free enterprise. He seldom missed an opportunity to make known his support of freedom. The occasions to do so became more frequent after he became Southern’s president and chief executive officer in 1962.

For example, in 1964 he spoke before the graduating class at his alma mater, Georgia Tech. (For that speech, he was awarded the George Washington Honor Medal by the Freedom Foundation at Valley Forge.) Bill expressed the philosophy that had guided his own life, saying that the erosion of individual freedom was caused by “herdlike acceptance of limitations on our rights to be individuals.” “It is important to recognize,” he said, “that the right to personal choice can be given away or voted away in a democracy as well as stolen away by a dictatorship.”

Bill also warned of a growing tendency on the part of too many young people to place a higher priority on security than on adventure, challenge, and opportunity. He warned against “the belief that cradle to the grave prosperity can be guaranteed if we turn over all our affairs to government. It gives the false promise that we need then have no concern about our personal contribution to our own advancement and welfare.”