Business & Finance: Train-Auto Service

For 14 years U. S. railroads have tried to hold dwindling passenger revenues (1926: $1,043,070,646; 1939: $416,573,621) against auto, bus and airplane competition. Lately, streamliners, cheaper fares, faster service, etc., have helped. But the No. 1 thorn in the railroads’ side, the auto, stuck fast. Last week, unable to “lick ’em,” the railroads decided to “jine ’em.”

In the terminals of twelve* western roads, in 135 cities, Railway Extension, Inc. opened a train-auto service. Sponsored by the roads (which put up no funds but gave terminal facilities for booths and parking spaces, telephone & telegraph service), Railway Extension was designed to persuade travelers to leave their cars at home, cake their journeys by rail, rent cars for use at their destination.

From Chicago to Los Angeles and Fort Worth to Seattle, the new service’s rates are the same: a basic 8¢-a-mile with a 10-mile-per-hour minimum, a sliding scale for rising mileage with an ultimate 6½¢-a-mile for a minimum 1,000 miles a week, gas, oil, maintenance, and insurance included. Cars: five-passenger Ford, Chevrolet, Plymouth, Studebaker and Hudson sedans. Telegrams to reserve cars are free, and arrangements can be made to charge automobile rentals against credit cards.

Author, president and top dog of Railway Extension is a husky, happy-go-lucky, talkative automobile dealer named Ed O’Shea. Weary of turning away potential customers who came to his Lincoln, Neb. agency from the next-door bus depot and the nearby railroad station to ask whether they could rent a car for a few hours, Dealer O’Shea worked out Railway Extension, took it to the railroads. At present his agency operates its own cars (500) in some 35 cities, has contracts with local drive-yourself agencies in the others.

Not to be outdone, some 30 eastern railroads put in their own train-auto service last week by arranging a hook-up with local drive-yourself agencies in 55 cities. Their rates, reduced for train passengers only: $3 a day plus 5¢ a mile ($4 a day, 6¢ a mile in New York City). Free taxis to the agency are included. Hope for their plan (and for Railway Extension) was advanced by the experience of the New Haven, which pioneered the idea on a limited scale in 1938, has found it adds about 50 passengers a month in nine New England cities.

*Union Pacific; Great Northern; Northern Pacific; Illinois Central; Santa Fe; Burlington; Rock Island; Chicago & Eastern Illinois; Chicago & North Western; Chicago, Milwaukee, St. Paul & Pacific; Chicago, St. Paul, Minneapolis & Omaha; Chicago North Shore & Milwaukee.