Jim Stookey's little railroad makes money hauling cement, coal, various other bulk commodities -- and a few people.
A mere nickel of every revenue dollar comes from passenger operations, according to Stookey (rhymes with rookie), president of Maryland Midland Railway Inc., a 54-mile short line. "We do it to make money, we do it because we like it and we do it to advertise the company," he said of the warm-weather tourist excursions through the Catoctins near Camp David. "But if we didn't haul another passenger, it wouldn't hurt us that badly."
The headquarters for Stookey's company in Union Bridge, a hamlet 55 miles northwest of Washington, comprises an 84-year-old red-brick train station and, two blocks away, a sheet-metal building surrounded by railroad tracks.
After driving the two blocks during a recent cold-weather tour of his operations, Stookey parked his car on a dirt mound beside the tracks and motioned toward a group of locomotives outside the shed. "There are seven right there," he said. "Actually, we have too many locomotives right now -- 13. We've got some of them up for sale."
Inside the shed, he reached up and patted orange-and-blue engine No. 102. "This is the little baby," he said. "This is the locomotive we bought to prove to everyone that we were a railroad and a company."
Stookey's company is one of a growing number of small railroads, called short lines, that use cheap, flexible labor to operate on tracks larger railroads have abandoned as low-volume branches. Short lines have been taking over track from the large railroads since World War II, but the last five years have seen a greater number of them than ever, according to the American Short Line Railroad Association, whose membership has jumped from 237 companies to 291 since 1979. There are six in Maryland and three in Virginia, the association reports.
The trend will continue, said Tom Dorsey, vice president and general counsel of the Washington-based trade group. "I think it's a general recognition by major railroads that they do not operate branch lines profitably, for the most part," Dorsey said. "They have very high costs, and it's inefficient to get crews there."
When Stookey and his rookie partners bought 65-ton engine No. 102 in 1976, they were a railroad company without a railroad. It wasn't until 1978 that they got the chance even to start furnishing a railroad. At that time, three miles of mud-covered tracks of the defunct East Washington Railway in Seat Pleasant were ready for dismantling. Stookey and his partner bid successfully on the back-breaking job, and ended up doing most of the dismantling themselves.
"We thought we had someone who would do it for part of the material, and they chickened out on us," said George A. (Jay) Chadwick, Stookey's partner and Maryland Midland's 74-year-old chairman. "So we got some local residents down there to help us on an hourly basis. But we ourselves were handling the claw bars, impact wrenches and lining bars to take it apart."
The salvaged assets of the East Washington Railway included rail, ties and office equipment. Most of the rail and some ties were sold, and much of the rest went into storage at Chadwick's Montgomery County farm. "Maryland Midland now had many of the trappings of a going railroad," recalled Chadwick, a retired partner of the Washington law firm Frost & Towers. "So all the company needed was a railroad line, customers and official approval to operate."
Approval came in 1978 when the state awarded Maryland Midland a contract to operate on a 17-mile stretch of state-owned track between Walkersville and Taneytown. The customers -- mainly farm-related businesses -- were small and sparse, but they needed rail service, and therefore were willing to pay small subsidies to Maryland Midland. The state and two local counties, Frederick and Carroll, chipped in a total of about $8,000 during two years. Service Begins With a Bang
Service began with a bang on the morning of May 8, 1980. The site was a small town near the middle of the line called Keymar. The railroad's only engine, newly painted No. 102, approached its first revenue car, a 100-ton covered hopper containing feed grain. The engineer applied the brakes, the locomotive slammed into the hopper, puncturing the radiator of one of the engines. As it turned out, the locomotive's air brakes had been shut off in transit from its storage depot. "We were forced to leave our first revenue car at Keymar and, while many well-wishers shared our embarrassment, No. 102 limped off on one diesel engine to Walkersville for inspection and repairs," Chadwick wrote in a company history.
Excluding empties, Maryland Midland hauled 208 cars in its first fiscal year, taking in $55,000, roughly half the amount it needed to operate profitably. Subsidies kept the company alive. "We were frugal beyond all belief," Stookey recalled. "None of the senior people took any salary or expenses. It was a labor of love. We learned what it took to get into the business."
What it took to stay in business was increased traffic, but the companies along the line were feeling the pinch of recession in 1983. If anything, the number of revenue cars was expected to decrease in 1984. The state's transportation department was "contemplating a quiet requiem" for the little railroad, Chadwick said, when the partners got an opportunity to buy some very promising trackage. The seller was Chessie System Railroads, a division of CSX Corp. For sale was a 37-mile branch line running east and west between Westminster and Highfield.
The line would be perfect for Maryland Midland. For one thing, it bisected the Walkersville-Taneytown line; for another, there was a big customer on it -- Lehigh Portland Cement Co. -- whose plant at Union Bridge alone might provide enough freight to keep the line in business.
By fall 1983 Maryland Midland had arranged financing for the $1 million deal (a big bank loan and a small private offering to about 30 investors), and the Interstate Commerce Commission had approved it. Maryland Midland moved its headquarters from Walkersville to Union Bridge, the better to serve its one big customer. Older Gentlemen Playing Railroad
Jim Stookey, who turns 56 today, climbs on and off locomotives with the spryness of one of his young mechanics. A retired lieutenant colonel who served in the Army for 20 years and as a veterinary pathologist, he often shows up in the morning wearing suitably stained and rumpled green coveralls. He knows how to drive the big engines but prefers to move them only short distances, mainly around the yard. He leaves the daily runs "up the mountain" to Highfield to the professional engineers who work for him.
Maryland Midland, which employs 18 full-timers (four in the office, 12 on the railroad, and Stookey and Chadwick, who go both ways), has been "exceptionally fortunate" in attracting workers who possess multiple skills, Stookey said. "Short lines can't pay very much, but we do pay a salary to all of our employes, except six hourlies who work on the track gang."
There is no union at Maryland Midland, he added, nor any craft. Then he raised his chin to obliquely point out a mechanic working nearby. "Brad will quite often go out and run the trains, as almost everyone in here has at one time or another. That was part of getting him to come to work here. He says, 'Can I occasionally get out on the train?' We said, 'Sure.' "
But if running a short line were merely a matter of pooling capital, buying used equipment and hiring cheap labor, then the business would be crowded with older gentlemen playing railroad. And it's not.
Which is not to say the older gentlemen don't swarm at the first sign of a branch line for sale. "For some reason, railroads seem to have more fans than other industries, and these buffs are very much involved with the romantic notion of railroading -- sitting in the cab, pulling back on the throttle and blowing the horn," said Arthur Ouslander, director of freight services for Maryland's State Railroad Administration, the body that has monitored all of Maryland Midland's transactions over the years.
"And many of them who actually get involved with railroad operations find out that that's really a small part of the business. There's a lot of back-breaking work that has to be done to maintain the right of way; there's also a great deal of paperwork. I think our friends Jay Chadwick and Jim Stookey are aware that there is a lot more to operating a railroad than just operating a locomotive. And they've been successful because they've been able to master all phases of it: the maintenance-of-way effort, the equipment effort, the marketing effort."
The Maryland Midland team's marketing prowess came into play with a vengeance last year when Stookey and Chadwick convinced Lehigh Portland to start receiving some of its coal by rail. Working with Chessie System, Stookey and Chadwick designed a package deal that produced not only better rates for Lehigh, but also a more flexible, more reliable schedule than truckers had been offering. Lehigh's business now accounts for about 90 percent of Maryland Midland's $1 million in annual revenue.
The picture will likely be much different two or three years from now. Chessie has signed a letter of intent to sell four miles of track to Maryland Midland on the eastern end of the short line. The stretch runs from Emery Grove, near Baltimore, to Cedarhurst. According to Stookey, business on this line could double Maryland Midland's present revenue.
Before that sale is consummated, Maryland Midland must refurbish eight miles of state-owned track between Westminster and Cedarhurst -- the link between the existing short line and the new addition.
Ultimately, the state could decide to sell the trackage to Maryland Midland. (After the fixup, the short line will pay a toll to use it.) "That's really our goal," said freight services director Ouslander. "The State of Maryland is not in the railroad busines for the sake of being in it. We're here because there's a need for that railroad service, and nobody in the private sector has been able to do it on their own."
Nobody, that is, until some older gentlemen ganged up nearby and started playing railroad.