U.S.: After the federal government mortally wounded passenger trains in 1967, Amtrak was created to clean up the mess

An unnamed Amtrak Coast Starlight conductor in May of 1974. Many of the original Amtrak conductors were older men because of railroad and union seniority. Passenger trains were considered a better job to hold, and the prestige passenger trains even more so. As a result, in the early days of Amtrak, the conductors who had migrated over from the passenger services of the freight railroads held their seniority and job positions. This also posed a problem for Amtrak as this meant there was not a deep pool of experienced conductors and trainmen (as well as engineers and firemen) so new hires had to trained to become seasoned veterans. Wikimedia Commons photo.

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.

The Boeing 707 – an iconic jetliner flown by Pan Am, an iconic airline. The introduction of the Boeing 707 and rival jetliners by other aircraft manufacturers in the late 1950s changed the way much of the world traveled. The new jetliners caused a death sentence to be imposed on transatlantic passenger ship travel and the cruise industry in general, plus contributed to the eventual creation of Amtrak and VIA Rail Canada in the 1970s because of the shift of passenger traffic from rails to the sky. The cruise industry roared back in the 1980s thanks for a romantic comedy ABC television show, The Love Boat, but why has it taken so much longer for passenger train travel to return? Wikimedia Commons photo.
When the Congress authorized the interstate highway system during the Eisenhower Administration in the 1950s, the then-astronomical cost of building a completely new nationwide system of highways was partially sold to Congress and the public as providing a system for the easy movement of troops and equipment for the military as well as other national emergency needs such as storm and natural disaster evacuations.
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.

The Washington headquarters of the Interstate Commerce Commission, built in 1934. The ICC was formed in 1887 and went out of business January 1, 1996. Somewhat ironically, this heavy-handed government regulatory agency’s building was repurposed in 2013 – and given to the Environmental Protection Agency (EPA), another aggressive government regulatory agency. In 2013 the building was renamed to be part of the William Jefferson Clinton Federal Building complex.Wikimedia Commons photo.
This cheery fellow with the inviting smile is Thomas P. Woodlock, a member of the Interstate Commerce Commission from New York, working at his Washington desk in 1925. Wikimedia Commons photo.
1968 copy of a 30 Day Notice for a Passenger Train Discontinuance. Kansas State University Libraries image via Wikipedia Commons.

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.
World War I ended in November 1918, and by 1919 the United States Railroad Administration was still running the nation’s passenger and freight trains. The war was over, peace reigned in the world. Why not take a vacation to California? The United States Railroad Administration was happy to provide a passenger train for your comfortable travel. In 1920, the railroads were returned to their stockholders and managers. 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.

July 1962, Pages 1-2 from a publicity booklet produced by the Penn-Central Merger Information Committee to inform the public, Congress and the Interstate Commerce Commission on issues concerning their proposed merger. These pages show various statistics demonstrating Eastern railroads in decline. It would not be until February 1968 that Penn Central Transportation Company would be in business, but only last until February 1976 after bankruptcy and takeover by the federal government, forming the nucleus of Conrail. Wikimedia Commons image.
An Associated Press report in the long-departed, but respected Orlando Evening Star in 1960, outlining the state of railroad mergers, including the upcoming Seaboard Coast Line, which would take seven years for the Interstate Commerce Commission to approve. The article is reproduced in two parts below, with larger, easier-to-read type. Internet image.
Internet image.
Internet image.
This timetable cover was the result for passengers, seven years after the Seaboard Air Line and Atlantic Coast Line announced merger plans, finally forming Seaboard Coast Line on July 1, 1967. Internet image.

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.

President Lyndon B. Johnson assumed office after the assassination of John F. Kennedy in November of 1963. President Johnson was elected in his own right in 1964, but chose not to run for re-election in 1968. The Johnson Administration favored airline over railroads. Wikimedia Commons photo.

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.

A Rock Island passenger train in New Mexico. Note there are five cars carrying mail, express and baggage and only one passenger car. To potential passengers, this train doesn’t look very glamorous or inviting. To a railroad accountant, this is pure money moving down the track:minimal crew requirements, minimal station services requirements, minimal reservations system requirements, no food service requirements and minimal train servicing cleaning and mechanical needs. These were the money-makers which brought in more revenue than it costs to operate them and subsidized longer passenger trains which required all of the services this train did not. Internet photo.
In 1949, life was good for The Burlington Route’s mail and express business. The Burlington was acquiring new Railway Post Office equipment and bragging about it to customers. Wikimedia Commons image.

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.

On a cold January day in 1971, the Southern Crescent has a train and engine crew change at Atlanta, Georgia’s Peachtree station. The Southern Crescent would not become an Amtrak train until 1979. Wikimedia Commons photo.
The Rio Grande Zephyr in 1983 at Denver Union Station, just before Amtrak took over. Wikimedia Commons photo.
Rock Island Railroad’s Rocky Mountain Rocket in a publicity illustration in 1951. The Rock Island was the third of the large railroads which did not originally join Amtrak, and instead joined in 1978. Wikimedia Commons illustration.

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.

File illustration.

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

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