by Bruce Richardson, October 2005
The passenger train in the 20th Century was shining symbol of the success of capitalism, a point of pride for private enterprise. How did this American icon go from being a showcase for a huge and successful industry to a welfare stepchild of government?
First, look at history. From the Civil War through the middle of the 20th Century railroads were considered the evil aggressors of private enterprise. There were robber barons, stock manipulators, favored shippers, and a host of other sins that brought on early government regulation to protect the public interest. The Golden Age of railroading wasn’t really so golden, but this was a powerful industry that pretty much got what it wanted. In return, government gave it taxation, heavy regulation, and treated it as a public utility, even though it was a privately owned industry.
As the 20th Century evolved, automobiles, trucks and highways all were improved, but the railroads were still heavily taxed and regulated. The railroads were expected to make a profit, but only after government took its pound of flesh.
The first revenue service of the Boeing 707 in 1958 spelled the end of passenger railroading as it was historically known. The 707, along with automobiles that could drive 70 mph all day, and an ever growing interstate highway system all combined to make passenger train travel passé.
This was also the end of graciousness and good taste, the end of personal responsibility, and the beginning of the coarsening of America. McDonald’s and Burger King redefined eating out. Suddenly, a meal served on a white linen tablecloth with silver and china in a dining car was no longer important. Pullman Company sleeping cars weren’t as attractive as the new roadside Holiday Inns with their swimming pools and black and white television in every room. Even the federal government got into the act, moving profitable U.S. Mail contracts from railroads to airlines and trucking companies. One huge source of earned income (NOT subsidy) suddenly disappeared.
In short, the passenger train - as it was operated, and in the time frame all this was occurring - became less and less important to the traveling public, and less and less desirable.
The private railroads, too, were undergoing huge changes. Small roads merged to form larger, more competitive railroads. Many railroads were either in bankruptcy, or soon headed there. The downfall of Penn Central wasn’t far away. Like the Boeing 707 for passengers, the semi-trailer truck on the new interstate highway network was the siren song of the freight industry. Railroads did everything possible to cut costs and retrench into a position that was thought tenable. A large part of that was getting relief from burdensome passenger and commuter trains. Stations built as temples to financial glory quickly became huge liabilities that couldn’t be justified. Fleets of passenger cars and dedicated locomotives that were nearing the end of their service life needed to be replaced, at huge cost. Railroads saw no way out of a financial quagmire that would drown the rest of their business. Even streetcars and trolleys were done away with in favor of soot-belching diesel buses that were ‘more modern.’
Then, in 1970 the most conservative President since the Hoover administration took on the problem and created the National Railroad Passenger Corporation. Note that the word “corporation” is part of the name. The Nixon administration planned for Amtrak to be run like a private company, and expected it to make a profit. The original projection was that the first $140 million of federal subsidy would tide the company over until profitability could be reached in short order after the beginning of Amtrak on May 1, 1971.
In 1971, everyone thought the most successful business model in the passenger transportation business was the airlines. So, Amtrak tried to make itself an airline on wheels. It didn’t work. Then, the Ford administration, to help the fledgling Conrail shed costs, decided the Northeast Corridor was better under the stewardship of Amtrak than the successor to the once mighty Pennsylvania Railroad. Amtrak is still choking to digest that decision.
All of this brings us to today, and today’s much different passenger rail marketplace.
Many of the railroad passengers at the advent of Amtrak still remembered interminable troop trains of World War II and the Korean conflict. The railroads, to justify getting rid of trains in a heavily regulated environment, contributed too, running off passengers by running mechanically unsound trains, dirty trains, and trains with no amenities. By 1968, you had to really WANT to ride a train to subject yourself to the machinations of the last days of private passenger railroading. That nearly 40 years ago. Many of those riders are either gone or too old to travel any more. Today’s Amtrak passengers have probably never ridden anything other than Amtrak unless they traveled by train in a foreign country.
The American transit industry is mercifully once again alive and healthy, with new rail transit lines being planned every day. Buses are now giving way to light rail and heavy rail systems.
The railroad industry has shed much of its abusive regulatory system. Even the airlines are barely regulated the way they were under the old Civil Aeronautics Board. The free market system is thriving in the travel and transportation industry. New cruise ships are being built as fast as the (foreign) shipyards can churn them out.
Old airlines have pretty much self-destructed. Service levels are abysmally low, prices are high for last minute travel, and security concerns have turned every passenger into a potential terrorist. Gracefulness and charm are gone in the airline industry. Crassness prevails everywhere.
All of this leaves huge opportunity for the uniqueness of passenger rail travel, whether by Amtrak or by another provider, as envisioned in Senator Lott’s Amtrak bill, S. 1516. The marketplace is different, the public mood is different, and the host railroads have stopped retrenching and are now in a growth posture, looking for every revenue and profit possibility.
Many socialists resolutely say that passenger rail transportation can never be profitable, nor appealing to private business. Why is that? What rule is there that says only government can operate passenger trains? Can’t clever entrepreneurs with marketing savvy operate passenger trains better than a federal agency? If the socialists are relying on history and what happened to passenger trains and railroads in the post WW II era, then they are sadly hanging onto history that is just that - history, not modern reality.
FedEx shows us that private business can do a better job in transportation than government, in the form of the post office.
So, why can’t modern passenger trains be reliable, desirable, and (should we whisper it?) profitable? They can. But, it takes an open mind to come to the realization. As long as the socialists insist that government can be the only provider of passenger rail service, then it will always be doomed to be a stepchild of government.
The financial narcotic of free federal monies in the form of endless annual subsidies is not the answer. Business smarts and American ingenuity are the answer; an open mind being the most important element. S. 1516 provides the first steps in this direction. Clear thinking people are rushing to embrace this, realizing we don’t have to settle for anything less than all we are capable of accomplishing.”