By Larston D. Farrar
The New Year is coming in on the highest economic plateau in all U.S. history, and there is every likelihood, in the view of both political and industrial observers here, that 1964 will prove to be every bit as good a "growth year" as 1963.
Considering that more corporations paid more dividends, and more corporations raised their dividends, in 1963 than in any other year in history, and considering the "age" of the recovery movement that began in 1961, it is surprising how little talk of a possible downturn is heard either among the economists or in the halls of Congress.
Rail management, according to spokesmen here, was heartened by developments on many fronts in 1963. Notable among these was the "green light" for piggybacking, from the Interstate Commerce Commission; the sympathetic attitude of the White House (under JFK and now under LBJ) toward management's problems, plus, of course, the solid increases in freight car loadings, due to the increased movement of materials.
For 1964, rail leaders foresee these favorable trends:
1. A continued rise in capital spending by business and industry generally, which means the probabilities of a year of overall prosperity. These things mean more freight car loadings, of course.
2. Action (perhaps) by Congress on the "minimum rate" legislation, which can mean so much to so many of the lines in the South and Midwest. No one considers this a "cinch," of course, but it still is considered to be a possibility.
3. A gradual "solution" of some of the problems revolving around the long-drawn-out "work rules" dispute, which has involved virtually every phase of the U.S. Government and solved by attrition, as much as by negotiations. Rail labor finally has come to the conclusion that it has few friends — among the public or in Government — on its more advanced ideas as to the use of manpower on the railroads. This recognition seems to be working toward a spirit of compromise.
4. The uptrend in new freight car orders, already visible, will continue. Railroads as a whole may set a new record in capital spending in this New Year.
5. A "new breed" of rail executives is coming to the fore. They will be able to make a greater indentation on the public — and on Congress — than may have been true of their predecessors. At least, they will be acting in the context of new situations and will have new approaches that may bring a better public image and a better deal to the railroads.
On the other hand, there's a possibility of trouble on the railroads in February, although few here think it will materialize. Effective February 24, the "strike embargo" in the new law goes out. President Lyndon B. Johnson is expected to put a new series of legislative proposals before Congress on the issues, for there is little chance that various points not covered by arbitration will be settled by the deadline.
— Larston D. Farrar is one of the nation's foremost Washington correspondents, a lecturer, and author of some 10 books. A native of Birmingham, Ala., he joined Nations Business as associate editor in 1942. He left that post to write for national politicians, and in 1946 opened his own agency. Mr. Farrar has been called by a national magazine "one of the 10 best-informed men on national economic and political affairs in the United States."
Source: The January-February 1964 issue of Progressive Railroading
