Nonstop since last sundays endorsement. Bookitle of our guests is, of course, the welldressed hobo. Himman those who knew new Stewart Brian was a welldressed man. He was a devoted supporter of the vigilant Virginia Historical society. He was a colleague and my publisher i will hit my 40th year paper in the first week of december, and stewart was publisher and chairman of media general for most of that period. He would be delighted by the book. He appears in the book, and i would just like to say, rush and i agree that stewart is not with us in body he passed away a few months ago, but he is here in spirit, and he will always be here in spirit at the Virginia Historical society, and we member him fondly. My personal relations with russia began a few years ago. I was at one of my neighborhood watering holes, and i was talking to the bartender, and the weekend before i had gone to new york on the train. I had a catastrophic experience coming back. The engine decoupled from the car somewhere near philadelphia at, like, 3 00 in the morning. A horrible noise. You saw this engine going away. [laughter] mr. Culbertson we were stuck. We were talking about that, and one of the other regulars was there a friendly fella, and he said it is interesting my father has written stepfather has written a book about the trains a lot about amtrak, csx, norfolk southern, richmond the virginia and richmond trains. Says i will send you a copy. I said that is great. By the way, my dad wrote war and peace. A couple of days later i get a in the mail and i go what is this and it is a book called the men who love trains, and it was a history of the railroads in that period of great convulsion in penn center, and went under. I had not realized at the time that penn central was the enron of its age. I read the book. It was like reading a spy novel. Corporatecription of doings, or miss doings, in some cases. Well, i did not realize my friend at the bar he had not mentioned this that the author of the book had been a Business Editor and writer at the times dispatch, before moving on to fortune magazine, so rush and i shared that over the years. When he would be visiting friends in richmond, we would run into each other at this neighborhood place, and we would stories,er, and trade and among the things we share is we believe that journalism is an honorable profession, and to me, it is always a pleasure to be around someone who is working in an honorable profession, and himself made that profession even more honorable. I recommend his book highly. People who love trains love the book. Studyingo a memoir of in richmond, loving the history of virginia, and there is a lot dispatch andes the newspaper business, and in my world there is no finer business to be involved in. Rush talk,e to hear so i would like to introduce rush loving. Thank you. [applause] todd, that was very gracious of you. Thank you very much. Day, wejournalist in my were all trained rigorously to be fair, to be balanced in our reporting, to be accurate, and always to be sorrow, and that was great that last item proved to be very important because i got a lot of good stories just because i was thorough and asked the extra question, or looked into the extra fact. It is like these two women who ran into each other, and both were quite surprised to see the other [laughter] saysoving jr. one of them why are you here, and the other was has i froze to death. The first one says it sounds awful. She says it was not too bad. It was awfully cold for a while, but then i fell asleep and i died. But why are you here question my the first woman says well, i was sure my husband was cheating on me, so i went home early to catch him, and found him sitting in the den reading a paper. I knew there must be a woman in that house, so i started searching. I looked in the basement, the first floor, the secondfloor, the attic, and the more i looked, the more worked up i became. I got so worked up i had a massive heart attack and died. Well, the second woman says it is too bad you did not look in the freezer. We would both be alive. [laughter] mr. Loving jr. the fellow who puts together these lectures is named graham, and he has a title that means a lot to me he is editor of the societies quarterly magazine. I was privileged to know virginias death. I worked with him. Is the temp contemporaries called him for the rest of us, it was mr. Dabney. Iwill never forget the things learned writing editorials on occasion for him, and just serving with him. The most notable was back in the mid60s i was a Business Editor. I wrote an editorial about the penn central merger, which was then pending. I referred to the chairman of the pennsylvania railroad, stewart saunders, as they form a former virginia and. Virginia and. Mr. Dabney came into my office the next day and he said rush, there is a good editorial. I am going to run it, but you must understand one thing, when you were born a virginian, you are always a virginian, and coming here to the Virginia Historical society brings back many fond memories because when i was a senior at the university of richmond, history major, i researched my senior thesis here, and won a prize for it. When i was a young reporter at the times dispatch, i covered the Virginia Historical society, as well as the Virginia Museum that store, and the civil war centennial, which was raising raging across the state then. Journalists back in those days in the 1950s and the 1960s, were unique people. They were irreverent. They were incredible, bright people, and one of the young reporters i came to know and really admire, and have an affection for was Stewart Brian, who todd mentioned just now. Was speaking a couple of years ago at the cosmos club in washington, and i introduced him. He was talking about the current state of the media, and he says when rush and i were young reporters. We all trained, we all caps we all drank, smoked, and we all chased other mens wives. I have to take one exception with him on that i did not smoke cigarettes. Just a pipe. Became an exceptional publisher, as he was an exceptional reporter, and i think all of us miss him terribly. Those earthy,ugh, creative, young reporters were cynical, and they turned out top stories stories that really mattered and were balanced. Time, ing all of that was enamored with railroads as a child, but i find myself even with them,ed intrigued by them, particularly economics of railroads. When i was small, my grandfather to the on an overnight run. He was a conductor on the southern. He took me on an overnight run and that is when i really got hooked. Then, as a Business Editor and an associate editor of fortune later, i was writing about railroads, among many other industries, and came to really, as i say, love them all the more. I came to know it was a great life because i was doing the two things i love writing and dealing with railroads. The railroads included a lot of fascinating people. People like hayes watts can watkins, who founded csx. People like who before he joined the roosevelt administration, went to moscow. He was the chairman of the Union Pacific. In fact, he created the streamliner train in the mid1930s, and he developed sun valley into a major resort area in the west to attract passengers. Yearsd me in his letter that later years that all the things he achieved in his lifetime those were the two he was proudest of. S was a Railroad Industry indeed it was the source of a lot of creative achievements. Were railroaders other than herrmann and walkins, like alfred perlman, who turned alfred watkins, like perlman, who turned around three railroads in his lifetime. Ceos the Great Railroad of his day. I came some other to meet some other nonrailroaders who were on boards. Baldwin. Aldy as a young man, he used a Railroad Office car, or business and try aboutound enough business for his bank to turn a small Baltimore Bank into one of the most powerful Financial Institutions in the east coast. A true achievement. Of found,two too, that the best people to run railroads were those that loved trains and love their work. Many of those executives were operations people and marketing people, but there were also some finance people like watkins, and some lawyers who were good. Now, i like lawyers. It, because my family is infested with them. Them, my brotherinlaw, who is a corporate attorney in martinsville, thanks i should be a redneck at his friends, and for my 75th birthday he gave me a motorcycle helmet, and on it were details. 99 of allsaid lawyers give the rest a bad name. [laughter] but another one sex with a younger woman can be fatal, but if she dies, she dies. [laughter] even my wife is a lawyer a trial lawyer, not a corporate lawyer, and the judges in baltimore tell me she is one of the best in the state. Unlike her clients, corporate clients, she is like,ing for charges, kidnapping, murder. And she because of her work, she has to carry a side arm. Now, when she got the permit to the state Police Sergeant that it hurt called me. Who defended her called me. He finished everything, but had one followup question. I answered it. He said i have one piece of advice for you do not monkey with her. I have seen her targets. [laughter] mr. Loving jr. now some of those lawyers in the railroad business, lawyers in my book, some of them, like bob claire, who created norfolk southern, his brother graham, were exceptional railroaders. I found that some lawyers that headed railroads were not up to the job, the, and by the mid1960s, when i started covering the business, the Railroad Industry was in grievous trouble. The railroads had been a key element of culture and economy in virginia, and the economies and cultures of many states other than virginia. It is interesting. Most people now are not aware of it, but the railroads created america. Steelld not have big without railroads. We would not have the big oil companies. It took trains to make those industries work. It was fascinating how the railroads developed the west. They brought passengers in, and actually recruited them from europe settlers. Brought them out to the west, set up, and then the railroads hold their products produce and cattle to the east, to the markets. The railroads did very well over the years, although there were ups and downs. They survived depressions, crashes, and all of that, but it was and at the time of world war ii, they were in their glory, really. The richmond, fredericksburg, and Potomac Railroad in 1942 was moving 33 passenger trains a day. Plus, specials like troop trains, and extra sections. They were carrying it was carrying numerous freight trains. As a boy, i used to stand at the crossing and watch those trains go by. There were trains loaded with tanks, trucks, jeeps for the army. Steel for the shipyards. Trains of refrigerated cars full of food and meat, vegetables. It was a fascinating thing to see, very stirring. The railroads then had a innercity transportation in america. It was not until after the war fadethat monopoly began to , and the railroads began to feel the pension. The started merging in hopes of making savings, duplicating costs. Sometimes, it worked. Sometimes it did not. Of aost notable case merger that did not work was penn central. Chairmanunders was the the last day before the company went into bankruptcy. Feel forcked a railroad operations, but, ofnders had a unique sense public policy, and after his ouster from penn central, i met in great secrecy with saunders one morning at the Berkeley Hotel in new york, and he gave me his side of the bankruptcy story. Problemme the biggest penn central and other ailing railroads had was overregulation. Dismissed the story as just an excuse for his own shortcomings. But two years later, i was having dinner in new york one evening with graham, who was then the chairman of the time in, and at that time point in time, there were five major railroads in bankruptcy in the northeast penn central being one. There were railroads in the midwest that were failing, and graham and i began to debate what to do to solve the problem. Now, graham was a disciple of protege of dean has since in. Excuse me. And a true democrat. Graham believed the government was the answer to problem. Ofended to be more skeptical government, and i started searching for what is the answer, and of course, he was saying the government could fix it. I felt politicians would just make matters worse. So, afterwards, i began to think about all of this. I began to research what could be done to solve this problem. As i began researching, i thought about what Stuart Saunders had said. Saunders washat dead on right. Since world war ii, the railroads had been struggling to compete airlines had stolen away their passengers and their lucrative mail business. Trucks were hauling, now, some of their most profitable traffic. The interstate Commerce Commission was the undisputed dylan. Villain. The icc bent to every pressure that came from congress from shippers, the unions, from little communities along their rightsofway. And the commission was tediously slow in granting rate increases to compensate for the increases in labor costs. Ittook months to raise rates also took months to approve mergers, which were then very popular because of the state of the roads. The allen of chicago, and pacific was a good case to take a look at, because the rock was in serious trouble. It had proposed to the icc that mergerllowed a threeway with the southern pacific in the Union Pacific, and it had taken 11 years for the icc to approve that merger, and even then, with conditions, and even then, about was time, the rock island bankrupt and going into liquidation soon after. I put the findings of all of that research into a fortune and a few months after the story came out. Came out, congress began to act. His faith in the government turned out to be wellfounded. And the white house provided a sound solution to the bankruptcy problem. They created a special off thetion that pruned nonprofitable tracks, stations, services, and merged the remaining into conrail. Dominant railroad in the northeast, of course, because of that. But, unfortunate, it failed to make money, and the government had to subsidize it, much to the chagrin of the office of management and budget, and the finance committees of the two houses. After my study came out after conrail was created, congress began to talk about deregulating all forms of transportation, starting with cargo, and this went, stirredt endingople to talk about regulation of railroads. The conrail management, also want the conrail management also wanted railroads deregulated because they felt that would turn around conrail that without all of these onerous restrictions, they could finally make money. Early 1979, congress was drafting a bill called the staggers act to give regular to railroad. Work in the white house for a year that summer, and soon discovered that the draft of the bill that by then existed had a lot of new restrictions in it, a lot of new regulations that would have bankrupted the entire industry , some of these regulations and it is funny. I discovered later that the problem was burlington northern. They had gone into the coal business about 10 years earlier, and the chairman had set extremely low rates. Ony were not making money the moves. Rates did not cover the deterioration of track, and all of that. Of greatbeing a man ego, and a very brutal brittle ego, and i love lou, but that was his shortcoming, resisted the warnings of the Eastern Railroad ceos hauled is notaul told him this a good idea you are not taking money. You might think so. Ofistant to the point getting pretty antagonistic to those who gave him what they thought was good advice. In one case, he wrote a scathing letter. Guy that sort of thing sort of thing rolled off, but it proved a point to everybody, that lou was just daft to reality. Well, finally, marketing people convinced him that they were indeed losing money, and indeed they needed to raise their rates and raise them pretty steeply. Well, when they jacked up those rates, the utilities all over the midwest and the southwest, coal wentuying bn into well, raised hell is what they did. These people led by a lady in n antonio who was the mayor. Andwas short and rotund very grandmotherly with big glasses. She did not know anything about the icc but she knew a lot about the politics and about the congress. And so she proceeded to go to the halls of congress and start twisting arms and she got other utilities to do the same thing. And pretty soon, they were rewriting the bill. And they were putting these amendments on that were going to choke the railroads. I worked for jimmy carter in the white house and i liked him come up i never thought he was very decisive. But this time he and his legislative staff really came through. Came through big time. Went to congress, worked with the leaders of congress and it got the bill redrafted and in early 1980, carter signed the thegers act freeing railroads. The last real major thing he did before he was defeated by november. Regulation had been so pervasive it took another 10 years for the railroads to add just to the new free market adjust to the new free market. And of the watershed came and the watershed came in 1979 when a trucker named johnny brian hunt took a ride on a santa fe train. The big potential moneymaker that we had all seen in the Railroad Industry was with the movement of containment containers and trailers. Nobody seemed to know how to unlock the market and a frail fellow named mike thought that he knew. And his idea was instead of having all of these trailers and containers delivered to the railroads through a middleman, a freight follower that got most railroadofit, the should form a partnership with the truckers. And thereby split the revenue and start making some money. Well, the Marketing Department at santa fe was deaf to those ideas because he wasnt one of them. But then haverty became president of the santa fe. [laughter] had hisng and he business car hooked to the train, put one of hunts cars in the front of it and invited him to come along to kansas city from chicago. And they were riding and is staying in the business car, looking at the trailer on the flat car in front of them. Hunt was a maze, because not only were the amazed because not only w