By J. Bruce Richardson, Corridor Rail Development Corporation; October 18, 2022
Here is something to consider: Amtrak wasn’t created totally because of the dual introductions of the Boeing 707 and the federal interstate highway system, but also because of a singular political move by the federal government.
Even though the Berlin airlift in 1948 and 1949 had already proven large amounts of material could be transported by air, in the 1950s planners were still thinking ground transportation instead of air transportation, and passenger trains during the Eisenhower Administration were still being converted from heavyweight consists to new streamliners with dome cars, full dining cars and extensive lounge cars on all-Pullman sleeping car trains.
We are now in the middle of the term of our 12th president since Dwight Eisenhower, and Americans are just beginning to once again embrace passenger train travel. It will most likely be another two or three presidencies before passenger train travel again becomes more broadly routine in the United States.
Above: The standard road sign for the Dwight D. Eisenhower National System of Interstate and Defense Highways, designed by Federal Highway Administration and the American Association of State Highway and Transportation Officials, was unveiled in a ceremony on Capitol Hill on July 29, 1993. Left to right: Chairman Nick J. Rahall (D-WV) of the House Surface Transportation Subcommittee, John Eisenhower (President Eisenhower’s son), Federal Highway Administrator Rodney E. Slater, and Chairman Norman Y. Mineta (D-CA) of the House Committee on Public Works and Transportation. Wikimedia Commons photo.
The private freight railroads operating their own and interline passenger trains were highly regulated by the Interstate Commerce Commission. “Strangulation by regulation” is not too harsh of a term. But, the railroads and their Railroad Robber Baron lords and owners brought this on themselves in the post-Civil War 19th Century and early 20th Century. These people were naughty, and they needed to be regulated; commerce and the country were better off for this.
But, by the post-World War II world in the United States, the regulators had become the new overlords of the railroads after heavy-handed temporary nationalization during World War I and heavy regulation during World War II. The regulators become so accustomed to bossing the railroads around they failed to notice the change in the country and commerce and still thought the railroads were rich and would have to be monitored eternally.
This January 1918 newspaper editorial cartoon told the story of the angst of both railroad executives and new government managers trying to keep the trains moving after the federal government nationalized the railroads on behalf of the World War I war effort.
From Wikipedia: The United States Railroad Administration (USRA) was the name of the nationalized railroad system of the United States between December 28, 1917, and March 1, 1920. It was the largest American experiment with nationalization, and was undertaken against a background of war emergency following American entry into World War I. During its brief existence, the USRA made major investments in the United States railroad system, and introduced standardized locomotive and railroad car classes, known as USRA standard. After the end of World War I, while some in the United States advocated for continuing nationalization, ultimately the railroads were returned to their previous owners in early 1920.
President Woodrow Wilson appointed his son-in-law, Secretary of the Treasury William Gibbs McAdoo, as Director General of the newly formed USRA. Wikimedia Commons image.
The 1950s and 1960s brought the first wave of railroad mergers, where either smaller systems banded together for the sake of efficiency and financial health, or the larger railroads started gobbling up the smaller ones to (don’t say it out loud) get rid of competition.
It wasn’t unusual for the ICC, in the best fashion of heavy-handed government, to take close to a decade or more to make a final decision on allowing a railroad merger. As an example, the merger between the Seaboard Air Line and Atlantic Coast Line to form Seaboard Coast Line took nearly a decade to win regulatory approval. Things change in a decade.
Here the railroads were in 1967. The airlines, also heavily regulated by the Civil Aeronautics Board, were trying to get their industry established. Their shiny new jets full of passengers were doing okay, but the airline boys really wanted the financial gravy – they wanted the U.S. Mails and express business. A compliant Lyndon Johnson Administration in late 1967 made that happen.
The Johnson Administration took the financial gravy away from the railroads and gave it to the airlines.
The Johnson Administration did nothing to ease the railroads’ pain when this happened. The ICC demanded the local trains – mostly carrying mail and express – still be operated even though much of the reason for their existence – mail and express – was gone. When the railroads petitioned the ICC to drop the trains, often the regulators said no, because in the opinion of the regulators, it was “in the public interest” to continue running these trains. To the ICC, it wasn’t a matter of what made the trains financially viable, it was as if the passenger trains were a public utility where financial health took a backseat to reality.
It’s an entirely different conversation of how the railroads fought back – mostly at the expense of the traveling public – to make these trains so uninhabitable the public “stayed away in droves.” It wasn’t a pretty picture for either the corporate image of the railroads, nor their remaining passengers.
Flash forward a few years to 1970, and the beginning of the formation of Amtrak, a government solution to ease the pain the government caused by moving the mail and express purposely away from the railroads, giving it to the airlines.
Wikipedia notes that: “As passenger service declined, various proposals were brought forward to rescue it. The 1961 Doyle Report proposed that the private railroads pool their services into a single body. Similar proposals were made in 1965 and 1968 but failed to attract support. The federal government passed the High Speed Ground Transportation Act of 1965 to fund pilot programs in the Northeast Corridor, but this did nothing to address passenger deficits. In late 1969, multiple proposals emerged in the United States Congress, including equipment subsidies, route subsidies, and, lastly, a “quasi-public corporation” to take over the operation of intercity passenger trains. Matters were brought to a head on June 21, 1970, when the Penn Central, the largest railroad in the Northeast United States and teetering on bankruptcy, filed to discontinue 34 of its passenger trains.”
As a side note, all during this period of the 1960s the Pullman Company was struggling to survive – not of their own doing – because the passenger trains of the private railroads hauling their cars were disappearing or diminishing.
Say what you choose about the history of the Pullman Company in the 19th Century and the early 20th Century, but the company was well-organized and knew how to provide good and competent passenger services. The Pullman Company had a complete ticketing and reservations operation via their host railroads, had full mechanical and cleaning forces, a complete cadre of Pullman conductors and trainmen and every other thing necessary to operate a railroad hosted on someone else’s tracks. Just like Amtrak would have starting in 1971.
From the Doyle Report as noted above to the the 1965 and 1968 proposals to shore up and save passenger train services, none of which came to fruition, the Pullman Company could have stepped in, acting very much as Amtrak eventually did, and created a nationwide passenger train service.
In the middle of Congress and the federal government trying to decide what to do, the Pullman Company closed its doors on December 31, 1968, just 22 months before the Rail Passenger Services Act was passed by Congress and signed into law by President Richard Nixon. Instead of the bumpy start Amtrak had at the hands of former airline and other executives, the Pullman Company cadre of experienced passenger train managers could have stepped in and seamlessly created a new national passenger railroad system that would have had a much different beginning than Amtrak did in the early years.
While many of the former mail and express trains had in fact been discontinued or truncated to shorter routes which made no sense (it’s tough to sell a train whose route ends in the middle of a field of corn), the reduced expenses of these trains still were not great enough to cover the financial gravy losses of mail and express.
Looking globally at the picture, those local mail and express trains literally “paid the freight” and had enough profits built into them that helped subsidize the main line streamliners and the necessary infrastructure to maintain fleets of passenger trains.
As a brief example, if you have a fleet of a dozen trains spread out over a system, the expenses of those trains (capital costs, maintenance costs, costs of stations and facilities, reservations systems, labor, marketing, insurance, depreciation, headquarters expenses, etc.) are charged to a dozen different trains.
Take away two of those trains, and all of those same expenses remain except for the expenses to actually run those two trains, such as labor and maintenance. While you may park the equipment for those two trains, you still have to cover the original capital costs of that equipment, ongoing insurance, etc. Suddenly, all of those expenses that were spread over a dozen trains are now spread over only 10 trains, which effectively increases the expenses of the remaining 10 trains.
Take the example further, and cut from the original dozen trains down to half that amount, just six trains. Same formula as above, the overhead stays the same – a station facility is a station facility, whether or not a single train a day uses it or a dozen trains a day use it – but the expenses for each remaining six trains go up because there are only six trains to allocate the overhead, which doesn’t change.
(This, by the way, is the huge inherent problem of trains only operated three days a week instead of daily, such as the Sunset Limited, Cardinal, and VIA Rail Canada’s Canadian and Ocean.)
By 1970 the private railroads had fewer trains in their fleets, but still the same infrastructure, both in terms of facilities for station and maintenance, plus passenger departments, reservations systems, etc.
While it was true the freight side of the railroads provided a good base of income and profit, the railroad managers kept looking at line items charged to passenger trains and were shaking their heads at the red ink. The financial gravy of the mail and express which used to keep at bay that red ink was gone, thanks to the Johnson Administration.
It is true more than a few of the named streamliners were making money in 1970 and, of course, the Southern Railway and the Denver & Rio Grande, along with the Rock Island all decided to stay out of Amtrak, along with three other smaller railroads. We know the story; in the end, it all ended up with Amtrak as the sole passenger railroad provider, courtesy of the Nixon Administration and the federal government, providing a financial solution to the passenger trains which had been killed by its immediate predecessor, the Johnson Administration.
Wikipedia further notes: “Railroads that chose not to join the NRPC system were required to continue operating their existing passenger service until 1975 and thenceforth had to pursue the customary ICC approval process for any discontinuance or alteration to the service.”
More from Wikipedia about the three major railroads which did not initially join Amtrak:
• The Chicago, Rock Island and Pacific Railroad continued to receive subsidies from the state of Illinois. It discontinued its two remaining intercity passenger trains, the Peoria Rocket and Quad Cities Rocket, on December 31, 1978.
• The Denver and Rio Grande Western Railroad feared congestion from hosting a revived California Zephyr on its single-track mainline. It operated its last Rio Grande Zephyr in 1983, and Amtrak’s San Francisco Zephyr was renamed the California Zephyr.
• The Southern Railway did not join until February 1, 1979, at which point it conveyed its Southern Crescent to Amtrak.
A healthy debate can be had whether or not if the Johnson Administration had merely expanded the mail and express service to include airmail as a choice for first class mail instead of taking everything away from the railroads and giving it to the airlines and trucking industry, whether or not just part of the mail and express contracts would have been enough for the railroads to have financially healthy passenger train fleets.
If the railroads had kept their passenger trains, would the soon-to-come business of FedEx and UPS been enough to re-imagine mail and express trains? We know that the Railway Express Agency went out of business simultaneously with the removal of these trains. We also know the federal REA Express operating permits were obtained by FedEx to start that service. The possibilities may never be known other than for speculation as to what may have happened.
It has been said the most chilling sentence uttered is “I’m from the government and I’m here to help you.” Half a century later, the government certainly “helped” the railroads and taxpayers who choose to travel by passenger train.
Editor’s Note: Much of the article above originally appeared as part of a longer article which appeared on this platform on January 29, 2021. Additional materials have been added as well as photographs and illustrations. – Corridorrail.com Editor
