Steven W. Usselman's Regulating Railroad Innovation is a meticulously researched, carefully written, and long-awaited study of innovation in American railroading. Usselman places his impressive archival research, which most extensively covers the three principal railroads that serve as extended case studies, into the literatures of business, economic, and technological history. He presents a great deal of new, firm-level evidence on such recurrent questions as the debate on railroads' behavior during their changeover from iron to steel rails during the 1870s; the character of technical change during the managerial revolution; the uneasy relations between regulation, rate-setting, and scientific management during the Progressive period; and the relative decline of railroading in the early twentieth century. Moreover, his book integrates into the narrative sensible readings of key political speeches, legislative debates, and court decisions, thereby setting the internal workings of the railroads into the broader political history of the United States.
While drawing on such varied sources as court records, legislative hearings, and engineering conferences, the volume's core is its solid grounding in railroad archives. The Chicago, Burlington and Quincy (CBQ) was a technical and managerial model for railroads operating west of Chicago. Its model, in turn, was the venerable Pennsylvania, which claimed to be the "standard railroad of America." These two railroads, owing principally to savvy and well-informed executive leadership, pioneered many of the era's most important technical, managerial, and organizational innovations. Usselman composes a clear picture of the difficulties in seeing, choosing, and solving technical problems, drawing on the Pennsylvania's voluminous engineering and operating records at the Hagley Museum & Library. The Baltimore and Ohio is analytically valuable as a geographic competitor to the Pennsylvania and as a follower rather than a leader of railroad trends. Other railroads, such as the New York Central (important in the engineering debates on standardizing rail shapes) or the Philadelphia and Reading, as well as the Chicago and Northwestern (among the many roads that locked horns with George Westinghouse over his air-brake and signaling patents), round out Usselman's portrait of the railroad industry.
Usselman takes it as axiomatic that railroads loomed large as agents of change, but he does not portray them as deterministic driving forces or as unmoved movers. His is a contextual account that captures the interactions of railroads with historical processes, resulting in a rich and multilayered narrative. While he ably deals with themes in U.S. political history in which railroads figured prominently (e.g., sectionalism, the Civil War, western expansion, urbanization, reform, and regulation), he has organized the book to spotlight changes in the railroads themselves. "Assembling the Machine" describes the central preoccupation from 1840 to 1876, when Americans developed a political framework for economic expansion and launched a vigorous phase of inventing and patenting new railroad technologies. In this section, Usselman delineates the consequences of the nation's decentralized, federalist system of politics for its economic development in his masterful survey of early-nineteenth-century political economy.
"Running the Machine," the second chronological theme, captures the dynamics of a distinct later phase. From 1876 to 1904, as he shows, carefully bounded engineering was more important to railroads than free-wheeling invention. In the earlier phase, railroads had engaged in opportunistic "insider innovation," for instance, to capture the profits of locating Bessemer steel mills on their own lines and had largely relied on master mechanics or outside inventors for new technologies. With the shift "from expansive development to operational stewardship" (p. 141), railroads increasingly directed and channeled innovation toward incremental improvements in a maturing system. Newly created staffs of engineers and chemists struggled to achieve stronger steel-rail sections, more durable cross ties, and standardized paints, steels, and soaps. Their efforts helped railroads reduce their dependence on the unpredictable market for patented inventions, the use of which had often enough landed railroads in court. All the same, George Pullman, with his patented sleeper cars, and even more so George Westinghouse, with his unassailable patents for air brakes and signal systems, frustrated railroads' efforts to internalize innovation completely. This section's political analysis demonstrates the railroad industry, principally through its trade associations, as a key player in the midcentury reform of U.S. patent laws.
Finally, "Friction in the Machine" underscores a third phase of railroading, from 1904 to 1920, when Usselman finds that technical solutions no longer sufficed to deal with a world of changing markets and increasing federal regulation. The Pennsylvania, in the midst of a hugely capitalized rebuilding campaign (1898–1910) that was launched to speed the flow of its rail traffic, was flabbergasted to find that its locomotives and railcars were not moving faster, as it had hoped, but rather more slowly. In addition to commodity shipping of coal, iron, or grain, the Pennsylvania, without quite realizing it, had dramatically increased its offerings of specialized services, such as fast freights and local traffic. Railroads with this new and demanding mix of freight found that technical fixes, such as signaling or other quasi-automatic control systems, did surprisingly little to reduce traffic delays. An increasing focus on the standardizing concept of "ton-miles" as a measure of a railroad's efficiency ironically obscured whether or not a railroad was making a profit with its more streamlined freight service. Railroad executives and managers were explicitly wary of challenging the established work routines of the heavily unionized work force. Considerations of the "human element" were not amenable to engineering analysis. All these factors left the railroad industry ill equipped to deal with the rise of competition from motor trucks and automobiles.
For the most part, the railroad managers and executives at the center of Usselman's account are reasonable, even rational, actors, seeking to adjust their complex systems to swirling changes in the economic and institutional environment (p. 177). The impulsive or heroic figures at center stage in an earlier genre of railroad history, such as William Vanderbilt, Jay Gould, or even J. P. Morgan, appear only on the periphery of his account. Rather, Usselman's attention, and evidently, too, his respect, are squarely for such noncelebrity figures as Charles Perkins and Robert Harris (of the CBQ), as well as Edgar Thomson and Charles Dudley (of the Pennsylvania).
While his introduction hints at "a comprehensive set of tools for understanding the framework in which technical change occurs in the American context" (p. xii), he develops these points implicitly rather than explicitly. For U.S. railroads, clearly, the country's federalist politics, expansive and extractive economy, and shift from producer- to consumer-centered governmental interventions mattered deeply, as did the bounded rationality of the key railroad decision-makers interacting with sharply felt local imperatives and dimly perceived national trends. The volume's seven-page epilogue neatly summarizes its principal findings but does not synthesize them into a wider theoretical or programmatic statement. Usselman also largely confines to the footnotes his polite disagreements with such recent railroad writers as Austin Kerr, Albro Martin, and Gerald Berk.
Developing a more wide-ranging, "comprehensive set of tools" to build on this volume will require comparative analysis of railroad building in other political contexts, extensive cross-sector analysis of different industries, and explicit evaluation of theories and methods in business history (at the very least, those of Alfred D. Chandler Jr., Philip Scranton, James Beniger, and Charles Sabel and Jonathan Zeitlin). One puzzle is that the railroads seemed early on to have pioneered a conservative, system-stabilizing mode of innovation, yet they remained distant from the early-twentieth-century enthusiasm for institutionalized industrial research evidenced in the electric and chemical companies. Usselman, again implicitly, seems also to challenge the most recent and fashionable work in business history by bounding his study largely to exclude direct analysis of race, class, or gender issues. Perhaps we can hope that Usselman, with his expertise also in the twentieth-century computer industry, will himself take up this wider synthetic task.