In the early 20th century, automobiles are a luxury (and an extreme danger) and the majority of long-haul travel is by railroad. Earlier in November, the 1905 NYT reported that the annual freight tonnage and passenger travel on the nation's railroads had reached an all-time high, revenues, profits, and dividends were also at all time highs, and that state government's were trying to figure out how to extract more tax revenue from those railroads that operated in their states (any of this sound familiar?).

The Nov. 24, 1905 NYT reports on a test of an electric locomotive that reached fifty miles per hour in a test run:

General Superintendent Bent of the Baltimore and Ohio Railroad and Superintendent Gibbs of the Pennsylvania Railroad were among railway officials who went on a short trip out of Philadelphia to-day to test a new electrical locomotive designed to replace the ordinary steam locomotive, especially on branches and spur lines.

The new engine is capable of making fifty miles an hour...The equipments consist of an eighty-horse power gasoline engine connected to a fifty-kilowat Westinghouse generator, supplying a storage battery of 103 cells of two and one-half volts each.

This story is interesting in a few respects. First, why are the railroads trying to innovate on the venerable steam locomotive? After all, in 1905 there are few cars, no interstates, no airplanes, no semi-trucks. The railroads, as an oligopoly, are the sole providers of long-haul travel for freight and people - and as such, it is often argued, there should be little innovation in such an industry. However, economists have long argued that innovation is necessary in a dynamic world. Railroads are no different, in this respect, than automobile, computer, or digital camera manufacturers. All of these industries are comprised of companies who are consistently trying to lower costs while at the same time ensure that their customers are willing to pay for their services. In retrospect, it is evident that the railway industry will face considerable pressure over the next fifty years, and it is likely that long-range planners in the railway industry saw this as well.

Second, the railway industry of 1905 received considerable flack for being dangerous (1905 was the deadliest year, to date, for railway accidents), noisy, dirty, and, while many would grudgingly admit that the industry provided a valuable service, there were many who demanded reform and government intervention in the market. Today's automobile industry faces many of the same accusations. Perhaps the semi-private companies that comprised the railway industry in 1905 were innovating to stave off further regulation? Note that the story does not suggest that the railway industry had asked for tax breaks for introducing what in essence could be considered a hybrid train engine (although there might have been).

Finally, there is an interesting technological parallel here. While today's automobile manufacturers (and the greens) whine that they do not have enough tax breaks to fully implement the hybrid technology for automobiles, it seems that the hybrid idea has been around - gasp - for a hundred years (in the end, the diesel-electric locomotives of today are similar in concept if not scale as the hybrid automobile). Such innovations can be made better over time, but it seems that we haven't come all that far in the idea of the hybrid. Did railroads lobby for tax breaks to introduce the cleaner, quieter, and likely more cost efficient, hybrid? Perhaps, but then today's lobbying on the part of the automobile manufacturers would be no different - alas.

A final thought strikes me. Although reading the paper from 100 years ago makes ex post analysis most convenient, there are still lessons to be learned. If the story told us of a compressed air engine that could make 50 mph, and in the end the compressed air engine was not brought on-line, then we would know that the story was not important. In this case, we know that the hybrid locomotive will eventually make it big - of course, therefore, the story is of interest.

However, my point would be to consider this. The next big thing is not immediately clear - to you, me, the government, or anyone else for that matter. Private enterprise ultimately provided the diesel-locomotive, affordable automobiles, and the rest of the products that we see in our times. Which story describes the "next big thing?" We won't know until, perhaps, a hundred years hence, but the important lesson is that such stories can and should be written. More specifically, one of the best aspects of the private-enterprise based economy is that such stories are written every day - and eventually the next big thing is created - almost always without government involvement.