Off with Their Heads

When crafty old (now 84) Frederic Christopher Dumaine got control of the New York, New Haven & Hartford two years ago, he figured that he could run a railroad just as well as the next man, and maybe better. Although railroad management was new to him, Financier Dumaine went right to work. That meant, first of all, cutting costs to the bone. He had learned the technique--slash wages, cut the staff and sales force, eliminate such "frills" as advertising--in such earlier business ventures as New Hampshire's Amoskeag Manufacturing Co. and the Waltham Watch Co. Amoskeag closed down in 1936 and had to liquidate, but Dumaine came out all right: a holding company controlled by him and some associates had siphoned off about $18 million. After Dumaine sold out of Waltham, it went broke.

But when Dumaine began slashing away at the New Haven, which daily carries 23,000 of Manhattan's commuters, he ran into trouble. President Lawrence Whittimore, picked by Dumaine for the job, quit. In the next eight months Dumaine fired eleven of the New Haven's top management, including two vice presidents and the treasurer.*Last week he swung his snickersnee again.

Separations & Statistics. Off went the heads of four more executives, including Harold W. Quinlan, passenger traffic manager, and Henry F. McCarthy, vice president in charge of traffic, who was cited by President Truman for his war work in the Office of Defense Transportation. McCarthy was fired for refusing to fire Quinlan. Said the New Haven: the "separations" were not voluntary; they were made to cut costs and to weed out those who "are unresponsive to ... management." Said Dumaine: the dismissals were "simply ... part of a program designed to put the road on its feet and to rebuild its credit."

Under Dumaine's iron rule, some 2,000 other employees have been laid off as commuter service and station facilities have been cut. Though he has spent money on new diesels and track, Dumaine has cut down in other ways. He has 'canceled almost all advertising ("Money spent for advertising is very largely wasted"), and sublet the presidential offices in Manhattan. He is turning over his Boston office to some 40 clerical workers, since he does much of his work at home. He has also stopped the collection of statistics, because it costs money--"And what the hell good can [statistics] do?" He has even eliminated the coloring books (11-c- apiece) that were handed out free in diners to keep moppets occupied.

Waiting Rooms & Fun. This winter he plans to close down a number of small waiting rooms along the line, because each one requires an attendant. "Hell," Dumaine reputedly once said, "I stood out in the snow when I was young. People stand outside for the buses. If they want to ride trains they'll ride trains."

So far, Fred Dumaine's methods have done little evident damage to the New Haven. In the first half of this year the railroad's passenger revenues were off 9% from 1949--not so much as those of its New England competitor, the Boston & Maine; freight revenues' were off 1.4%, only a slightly bigger drop than the B.&M.'s. But railroaders, both in & out of the company, think that the effects of Dumaine's policies will soon be felt. Said one fired official: "The sales force is ruined, and . . . you can bet that the friends of the [dismissed] freight traffic people are going to start shipping on other railroads. Most of us feel sorry for the old man. He's gone through life without having any fun--unless it's firing people."

*Thus tying the record of Montgomery Ward's Sewell Avery, who lost eleven senior officers and directors within a year (TIME, April 25, 1949 et seq.).

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