Viewing page 97 of 99

This transcription has been completed. Contact us with corrections.

30

The Schenectady Works was served by the New York Central and the Delaware & Hudson railroads. It also had a network of intraplant trackage of its own for serving the multitude of buildings requiring rail service, which was provided by a plant railroad operation which was purely a plant facility and not a separate entity like the East Erie Commercial.  Since I have never seen either a New York Central nor a D&H locomotive in the Schenectady Works proper, I assume the plant railroad operation performed the work both covered and not covered by the line—haul freight rates. This meant that the two carriers delivered and picked up cars at an interchange and that was the extent of what they did. Another feature of the intraplant operation was a narrow-gauge system which at one time handled most of the movements between various buildings and would be strictly a plant responsibility; how much of this was still in operation in 1933 I do not recall but some of it, at least, had probably been supplanted by standard gauge as well as trucks, and possibly small, rubber—tired dollies which were operated as trains on the pavements. At any rate, it seems reasonable to assume that both railroads were paying the Schenectady Works a tidy sum for the switching work they were doing which was included in the line-haul freight rate and probably some that wasn't included. For the Schenectady Works was in the favorable position of being served by two carriers who could be set off against each other in awarding business in many cases; in fact, the plant also was served directly by the Barge Canal, providing additional competition.

I now come to my second assumption. When the Emergency Transportation Act of 1933 was passed, encouraging among other things that railroads get together on joint use of terminal facilities and avoid excessive allowances for industrial switching which, by implication, would seem to suggest competing roads get together on this, I assume the New York Central and the Delaware & Hudson approached the Schenectady Works about a reduction in switching allowances. At that time, the Company was looking for every last nickel also and I have to assume that they looked with great disfavor upon this request and refused it. The railroads presumably were adamant and so the Company undertook the study which was assigned to Chandonnet and me. For it wasn't too clear just what alternatives the Company had. The three which occur to me now are: 

1) Accept the railroads' new offer.
2) Reject the offer and tell the railroads to perform the work.
3) Continue to argue and persuade the railroads to revise their position if possible.

At that time, neither the Company nor the railroads, particularly the New York Central, wanted to make too much of an issue of the matter because each was a very good customer of the other.