Railroads: Trends.

While the aviation and auto industries caught the public fancy, the railroads continued through the 1920s to provide the major share of intercity transportation, both passenger and freight. At the turn of the century the railroads transported the overwhelming share of intercity goods and passengers (about 70 percent of freight and an even larger percentage of passengers); by the end of the 1920s the railroad share of both passenger and freight movement had begun to decline slowly, but early in the decade this trend was not evident. Although revenue from passenger service fell from $1.2 million to $876,000, freight revenue rose slightly from $4.4 billion to $4.8 billion. Railroads were still regarded as the backbone of the national transportation system.

Assumptions of the Railroads.

For the most part, railroad management in 1920 saw no reason to think that the industry might be headed for trouble. As the decade...