THE ELECTRIC INTERURBAN RAILWAYS IN AMERICA.

George W. Hilton '46 and John F. Due. Stanford: Stanford University Press, 1960. 463 pp. $9.50.

Horatio Alger in reverse!

Americans typically idolize the successes, and sweep failures under the rug. But failures persist - and their lessons continue sad but instructive. Professors Hilton and Due here graphically picture the life cycle of one of the most spectacular of business failures, the electric interurban railways.

Born in a burst of optimism in the late 1880's, the industry seemed destined to eminently fulfill a need. The steam railroads catered to longer-distance, intercity passenger service, for which the horse and buggy was too slow. But farmers and small-town residents sensed the advantages of mobility and access to the cities. Trolleys were successful in the cities - why not interurban trolleys?

The financial community agreed so enthusiastically that two real booms in support followed rapidly on each other in the decade of mushrooming growth of the interurbans, 1900 to 1910. Only the two panics of that period held the boom in bounds. The automobile - unproved and, worse, unrespected by Wall Street - seemed at best a pale competitor.

The interurban's services in the first two decades of the century - frequent runs (often at amazing speeds), low fares and the delightful fact it could drop passengers at the nearest spots to their homes (any street corner, lane or open field was a "station") - made it the darling of a host of commuters.

While only a handful of interurbans maintained dining cars or sleepers, most offered other extraordinary services. The excursion - to ball park, carnival, football stadium - became revered Americana. Many companies performed prodigious feats. Chicago's North Shore Line transported over 225,000 people to Mundelein, Illinois, in one day for a religious congress.

But the bulk of the interurban's services lost money almost from the start. Few industries, in fact, could boast so poor a total financial record. Initial stock watering, heavy debt structures, damaging drains for accident claims brought early and frequent bank- ruptcies. And the industry finally recognized, as a vice president of an Ohio interurban put it, that "the auto passenger car and auto truck are real methods of transportation . . . they are here to stay as I see it." It was the automobile, more than anything, that finally put the interurban down.

The decline was precipitous. Holding companies tried to bail many sick lines out in the 1920's, but were themselves pulled down in the depression. Abandonments became frequent, although the staying power of many lines was truly remarkable in the light of their continuing losses (exceeding even depreciation to become actual cash drains in many cases). "How difficult it is," the authors point out, "for an industry that is declining to realize it is actually experiencing a secular decline that will eventually destroy it. Even after the trend has gone on for a substantial period of time, the belief persists that the readjustments have been completed - that equilibrium has again been restored."

Today only a few lines remain to titillate the buffs and continue to render modest service.

All the sorrowful details are carefully chronicled here by the authors. One encyclopedic section reviews the growth and decline of individual companies. These latter are heavily oriented toward physical and financial growth and some readers might well wish for additional information on their corporate management problems, labor relations policies, and public relations decisions.

This is unquestionably the definitive book, and will ensure that, if gone, the industry will not be forgotten. "For we can learn much," as George Hilton said in a guest lecture at Dartmouth last fall, "from 'the economics of total failure.'"