Re: Billboard Painting Prohibition

Tony Thompson

Dennis Storzek wrote:

We had a very extensive discussion about the "billboard reefer ban" back in 2014. View it here:

The first thing to understand is it wasn't about shippers complaining about being offered cars with advertising painted on; it was about the railroads distaste for the reefer lease fleets, because while the railroads were obligated to maintain a fleet of reefers so they could supply a car if a load was offered, when a load in a lease car was offered, they had to pay car hire on the car, while the car they owned sat. It was quite a sore point during the twenties and early thirties.

While the ban did not cover owners names, it was rather ambiguous what could be construed as "advertising." Because of the fact that the remedy was refusal to accept the car in interchange, and this decision would be made multiple times during the cars trip, every time the car was interchanged between railroads, NOBODY wanted risk having a loaded car of meat or produce refused a thousand miles away from its point of origination, so initially NOBODY painted anything on the cars that could possibly be called advertising.

As time went on, the lease fleet issue receded, and after WWII cars began to sport colorful logos again, but from the late thirties through the war the freightcar fleet became very bland indeed.

Very good summary, Dennis. I would agree with almost all of it. The one point missed is that the railroads not only disliked the extensive private fleets, effectively competing with their own (which they didn’t manage to eliminate). More importantly, the leasing companies were REBATING mileage charges to the lessees, above some agreed minimum mileage per month. That reduced or in some cases even eliminated lease payments by the lessee, and of course encouraged as much roundabout load movements and empty mileage as possible, by lessee directions. The ICC found that this practice was indeed a rebate, long prohibited. With its elimination, much of the financial advantages of the lease contracts of the day disappeared.
Notice again that these significant regulatory issues do NOT include the advertising. It is a quite minor part of the ICC testimony and of the final ICC order. 

Tony Thompson

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