Railroads

What distinguishes America’s railroads from those railroads elsewhere in the world is that American railroads were constructed and owned by entrepreneurs. It was a rare American railroad that was owned by local or state government – exceptions being the Alaska Railroad, once federally owned, but now owned by the state), Amtrak (officially, the National Railroad Passenger Corp.), and Conrail (which was created out of numerous bankrupt railroads, but subsequently returned to the private sector and then divided between CSX Transportation and Norfolk Southern Corp.) …

By 1906, some 85 percent of the bonds and 50 percent of the stocks traded on the New York Stock Exchange were those of railroad companies. 

Santa brought me this book, published by Simmon-Boardman of Omaha, publishers of Railway Age, MarineLog, SignBuilder Illustrated and other “B2B” publications. This one is dense with information, much of it too technical for me, but it’s healthy to read above one’s level.

It’s illuminating when studying the Civil War to make reference to a map of the railroads of the Confederacy. Here’s West Points map thereof:

New Orleans, Pensacola, and Norfolk were in Union hands by the end of 1862, with Jacksonville disputed, so that left Wilmington, Charleston, Savannah and Mobile as sea-rail hubs. But Mobile wasn’t much use once Grant had cut the rail lines in northern Mississippi, and Sherman would tear up the tracks to Savannah soon enough. You can see the importance of Wilmington in supplying the Army of Northern Virginia.

Note too all those different gauges:

In the early years of United States railroading, several different gages were in use. In 1863, however, President Lincoln designated 4 ft 8 1/2 in. as the gage for the railroad to be built to the Pacific Coast. This, then, became the standard to which all U.S. railroads conformed. Thus, the railroads south of the Potomac and Ohio Rivers that were mostly 5ft gage until 1887 changed to a standard virtually over a single weekend.

Discussions of high speed rail in the USA sometimes ignore the crucial points:

1) The UK, Japan, Germany, France all at some point nationalized their rail lines. In the US track is still owned by corps who are not in the business of passenger traffic (in fact actively fight it)

2) we use our rail much more for freight than they do in Japan/UK/France/Germany etc. Our whole economic model based it being cheap enough to ship Asia to West Coast (Long Beach) and then train to wherever. Does just the vastness of the US helps why freight rail matters so much more here? Our trains are also hauling coal and stuff

A radical agenda for a president could be nationalizing the railroads, but that would never happen: imagine taking BNSF away from Warren Buffett/Berkshire Hathaway, or UNP away from the shareholders. KC Pacific is international.

BUT the federal government did subsidize all this building through land grants, why should all the benefits be in private hands?

Canada for awhile had an interesting hybrid system: federal Canadian National and private Canadian Pacific. Opponents of socialism can point to the inefficiencies of CNI, while opponents of aggressive capitalism can point to the costs put on rural Canada once CNI was made private (all of Newfoundland’s railways were shut down!). These are losses where the full impact can’t be measured, it might really erode the core of a nation.

CNI was privatized in 1995. Today the largest single shareholder is Bill Gates.

The political problems of building high speed rail are daunting, which is too bad. The nationalizations in Japan, the UK, Germany and France took place during crucial moments of national transition (in France it took the dictatorship of Napoleon III, in Germany Bismarck played a role, Japan was going through a radical modernization, etc).

The federal government has decent power to make life difficult for railroads. They could use that to squeeze out some new high speed lines along existing track. Would be great to have LA to SF, for example. But imagine the political will and might it would take to wrench that concession out from an enormous company that’s in the business of hauling freight, not people.

Big changes in the US seem to take place only during rare periods of crisis when opportunity and power is for a moment consolidated: Lincoln in the Civil War, FDR during the Great Depression and World War II. Maybe if FDR had lived we would’ve gotten to national health care; maybe if Lincoln had lived we would’ve nationalized the rails.

The Railroad: What It Is, What It Does further describes the Amtrak situation: in 1971, Amtrak was created by Congress to take over passenger services on freight railroads that were losing money. The bankruptcy of Penn Central in 1970 freed up some track along the Northeast Corridor, which Amtrak acquired.

Since its creation, Amtrak has struggled financially, owing to a congressional failure to provide Amtrak with a consistent source of federal funding. Annually, since Amtrak’s first year of operation, it has had to fight for a congressional appropriation that its officials and supporters consider insufficient. This inconsistent and inadequate funding has preoccupied Amtrak officials, adversely affected operational improvements, and slowed acquisition of a modern fleet.

The book concludes, somewhat glumly:

Under present conditions it appears that, whatever their overall ecological, congestion-relief, or other social benefits, proposals for high speed rail systems in corridors of North America must first demonstrate financial feasibility founded primarily (if not wholly) on credible private-sector support. 

We have our Amtrakiest president in awhile, but time is running out on Railway Joe.



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