Financial History Issue 112 (Winter 2015) | Page 13
forced to pay exorbitant rates to ship grain.
Brosnan’s larger plan for the South was
nothing less than a revolution in agriculture.
The South did not produce much grain,
which meant that cattle raised in the South
had to be shipped to the Midwest where
they would be grain fed and fattened for
slaughter, then returned to the South in
the form of finished meat products such
as hamburger, steaks and roasts. Brosnan
biographer Charles O. Morgret describes
Brosnan’s plan as “the essence of simplicity
and logic. Instead of taking the cattle to the
grain, he would bring the grain to the cattle.”
The resulting increase in jobs and tax
revenue along with lower beef prices
would be a boon to the South’s economy.
His battle plan against the ICC was twopronged: (1) effect change through legislation and (2) use the court system to
force the ICC to change its position. The
former approach offered some hope when
John F. Kennedy was elected President.
Although Brosnan despised Kennedy, the
new administration supported reducing
transportation regulations in favor of market competition. Brosnan hoped that this
enlightened attitude would lead to legislation that would allow railroads to operate
freely without government interference in
rate setting. This hope proved elusive and
came to an end when Kennedy was assassinated. The latter approach would ultimately bear fruit, but not without years of
struggle and frustration. In the meantime,
Brosnan had a large number of Big Johns
sitting idle that needed to be put to work.
Since the ICC controlled rates for interstate — but not intrastate — commerce,
Southern was able to offer the new lower
rates to farmers in southern Georgia who
shipped their corn to the poultry producing region of northern Georgia. These
farmers, who were experiencing a bumper
corn crop in 1961, jumped at the chance
to ship at lower rates. Southern shipped
millions of pounds of southern Georgia
corn to northern Georgia at substantial
savings. Ironically, Southern was also able
to offer the lower rates to the Department
of Agriculture whose various post-war
programs had left it with a great deal of
surplus grain. The grain was sold at rock
bottom prices to poultry and livestock
Collection of the Museum of American Finance
EDUCATORS’ PERSPECTIVE
Specimen gold bond certificate from the Southern Railroad Company.
producers in the South and hauled in Big
John grain cars for almost two years while
Brosnan fought for the right to offer lower
rates to commercial shippers.
In the meantime, Southern’s rate case
slowly wended its way through the court
system and was eventually heard by the
Supreme Court. After three rounds of
deliberations, the Court finally decided
in favor of the lower rates in early 1965.
President Lyndon B. Johnson lauded the
decision, noting it would save consumers
$30–$40 million annually on food.
Southern Railway under the Brosnon’s
www.MoAF.org | Winter 2015 | FINANCIAL HISTORY 11