Business & Finance: Stalled Locomotives

When red freight-car corpuscles are flowing through the arteries of U.S. business, the plants of three great companies are filled with the crash of hydraulic forges, the pounding of hundreds of hammers, making those mighty creatures of the industrial age, railroad locomotives, Iron Horses. The gestation period of an Iron Horse is about four months, yet the three companies can easily turn out a total of 2,000 locomotives yearly. In the past year the three companies—Baldwin Locomotive Works, American Locomotive Co., Lima Locomotive Works—received among them precisely one order for a new locomotive. It came from a Brazilian cement company. Alco got the order—and filled it at its Montreal plant.

Last week Alco’s directors, for the first time in Alco’s 31 years, passed the preferred dividend, the last dividend that was being paid by the country’s three locomotive companies.

The low estate of U. S. railroads is, of course, the immediate cause of the stalling of the locomotive industry. But this year’s situation is only an accentuation of a long trend. In 1928 Baldwin made fewer locomotives than in 1873. Modern locomotives (a good-sized one costs about $100,000) last longer and do more work. The Iron Horse population has gone down steadily and it is conceivable that in future years all the U. S. railroads will not buy more than 200 new locomotives a year.

The three engine-makers—Baldwin’s dewlapped Samuel Matthews Vauclain, American’s songwriting, politically prominent William Hartman Woodin (see p. 9) and smaller Lima Locomotive’s Joel Stanley Coffin—saw the danger signals ahead in 1928. Each company sought other ways to make money. They went into Diesel engines, power shovels and other heavy machinery as sidelines. But their great main plants are still locomotive plants and must have locomotive business to survive. The three companies can always count on some repair and parts business. But even this has been deferred, for with traffic falling off, broken-down Iron Horses can be turned out into the yards indefinitely. At present it is estimated that 10,000 of them are in need of re-shoeing.

Nearly half the 55,000 engines on U. S. rails are more than 20 years old. Sad-eyed Mr. Vauclain, who has seen the grass grow six inches high in the Baldwin plant at times, commented last fortnight to the International Acetylene Association: “One locomotive went into service the same year I came into being in 1856 and is still in service.”*

*He referred to a wood-burning American type, owned by J. M. Bray Co. of Valdosta, Ga. It has not been used since 1928 but is ready to steam up at a hat’s drop. .