ONE of the most serious of the nation's mistakes during
the early months of the depression was the failure to
recognize that the stock market crash was a symptom
of economic disease and not an isolated incident. On all sides,
optimistic and complacent prophecies promised an early fi-
nancial recovery and a return of continuing prosperity. Few
persons saw the dismal years ahead.

By the end of 1930, however, the seriousness of the eco-
nomic situation, both in the United States and in Canada,
had become acutely apparent. The net railway operating in-
come of Class I railroads in the United States had dropped
from an all-time high of $1.2 billion in 1929 to $868 million
in 1930, the smallest since 1922. Freight business was at the
lowest point in eight years, and passenger business was less
than at any time since 1906.

This sharp drop in railroad income reflected itself in drastic
force reductions by the carriers. The average number of main-
tenance of way employes in railroad service dropped more than
60,000 from 1929 to 1930 (and more than 200,000, approxi-
mately one-half, from 1929 to 1933, when the low point of the
depression was reached). The Brotherhood had enrolled 23,000
new members in 1929 and had the largest membership in
years. Its goal of a further substantial increase in member-
ship, however, became a lost hope as the railroads slashed
their forces.

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