Christian Wolmar is a British writer who is fascinated with railroads. In 2012 his book The Great Railroad Revolution: The History of Trains in America was published. (By “America” Wolmar means the U. S. He does not consider railroads in any other of the Americas). Chapter 12, The Renissance Without Passengers, is about Amtrak.
Wolmar begins by pointing out the Federal subsidy for rail passenger service was in place when Amtrak was created. It began an 1964 under President Lyndon B. Johnson and it did not just subsidize existing service; it was intended to create high speed service between Boston and Washington. And “The experiment … showed that federally supported passenger rail could be successful.”
Then the Penn Central went bankrupt and Richard M. Nixon was elected President. “There were fierce negotiations behind the scenes involving the railroads, Congress, the federal government and the states.” The negotiations included “back room deals” and “considerable horse trading.” Out of that President Nixon announced Railpax (Amtrak) in January, 1970. There was little public debate and Amtrack passed both houses of Congress in the fall of 1970.
The private railroads had 259 intercity passenger routes at that time. On May 1, 1971 Amtrak began with 149 of those routes. The new law provided that the 20 existing passenger railroads could join Amtrak by providing their old passenger equipment and paying one year’s losses to the new company. Interestingly, 6 railroads, almost a third, declined to do so and choose to continue their own passenger service for at least 4 more years. Amtrak was given $40 million and loaned $100 million and expected to be self sufficient within 5 years.
The idea that Amtrak could be self sufficient Wolmar calls a “big lie” tha
Don Phillips begins much earlier than Christian Wolmar. He summarizes the events which led up to the bankruptcy of the Penn Central. In a book, The Wreck of the Penn Central, Joseph R. Daughen and Peter Binzen describe all of the post merger problems. A few: the two men in charge, Alfred Perlman, President of the New York Central, and Stuart Saunders, Chairman of the Board of the Pennsylvania, not only worked in different cities, New York and Philadelphia; they disliked each other to the point of not speaking to each other. No one ever bothered to unify the two computer systems for keeping track of freight cars. As a result freight cars would get lost for many weeks. Money was stolen from the stockholders of the Pennsylvania, money the railroad could not afford to loose. Of course, Don Phillips cannot in an article go into these issues as deeply as a book can. But had the Penn Central had decent leadership or even any leadership the bankruptcy might have been avoided.
Don Phillips does cover both sides of an argument that erupts on this forum. Were people simply abandoning trains because they preferred flying and especially driving as the Hosmer report suggests? Or have they not abandoned trains as Claiborne Pell suggests? What is clear to me is that the Federal Government built two hugh highway systems that were not needed for transportation. In the 1930’s FDR used the Works Projects Administration (WPA) to build a system of highways in order to counteract the Great Depression. In the 1950’s Dwight Eisenhower built our Interstate system in order to strengthen our defense. Alfred Perlman has pointed out that doing so has given enormous subsidies to the automobile industry. Railroads could not possibly compete with such subsidies, especially when fettered by the ICC.
Businessmen abandoned trains that weren’t competitive with flying. Everyone else abandoned trains that weren’t competitive with driving. Those trains that remained competitive were not abandoned.
Yeah, of course, wink, wink, nudge, nudge. Building new roads was a hugely popular enterprise - not because people were thinking of the defense application!
Do you think an Amtrak bill could have passed in w/o union rights being protected? It had zippo to do with whether or not it would or would not contribute to profitability. It was all politics.
Do you think an Amtrak bill could have passed w/o at least paying lip service to profitability? Politics, again. Even the most rose-colored-glasses view was that more LD trains would have to come off, even after the slashing at the start. The only hope was corridor development.
Also, Amtrak was Volpe’s baby. He shoved it through the White House over the objection of Nixon’s close staff by writing the “White House” version of the bill w/o asking permission.
Could you perhaps expand on your ideas, Don? To say that the Penn Central was left in disarray is to understate the situation. Conrail had a lot of pieces to pick up and not just to put together but also to create some kind of coherent organization. But I don’t want to take a hard line; I’d just like to know more of your thinking.
Of course there are individual factors. Time is money. Once coast to coast air travel became available a business man could not afford to take the train. And of course with the massive subsidies of free highway systems driving was very popular. And it still is. In my state, for example, there is no sales tax on gasoline; there is an excise tax but that is substantially lower than the sales tax would be. Meanwhile, railroads were taxed and part of their taxes went to pay for these free roads. Competing with that was a little daunting.
Of course the interstate highway system was popular. It was pork barrel legislation for just about every single Congressional district. Why wouldn’t passing out free money all over the country be popular?
From everything I have read it was necessary to structure Amtrak as a for profit corporation to get it to pass the Congress. And one result of this structure is that Amtrak employees can bargain over wages. However, had Amtrak been created as a government agency then bargaining over wages would not have been permitted. Federal employees do have unions; those unions just cannot bargain over wages and they cannot strike.
3b. John Volpe was Richard Nixon’s Secretary of Transportation. His job was to represent the transportation needs of the country. Yes, there were staff members who disagreed with him. Ultimately Richard Nixon found Volpe’s position persuasive and signed the Railpax legislation.
Here I have to disagree with you. No one suggests all railroad companies are identical in the number of passengers they carried. And if you go back and look at Don Phillips’ article he doesn’t just use the statistic. He lists the railroads by name and puts an asterisk next to those that did not join Amtrak. And, while it is true that the Penn Central prior to Amtrak operated half of the passenger trains in the country it is also true and should not be ignored that another group of railroads got out of the passenger business altogether. And it is also true that many of the PC passenger trains were commuter trains and not long distance trains. So I think the statistic needs only to be seen for what it is. No statistic can capture the whole truth of anything. But it is not sloppy. And it is absolutely not misleading to any thoughtful reader.
To try to add a little context to our discussion, we are talking about history, here. If we disagree we disagree about something that happened in 1970. These issues, though, really do not have anything to do with how Amtrak should operate today.
Sure. PC was a hot mess, but that isn’t the root cause of what went bad. Conrail was basically just PC with money, at the start. EL, CNJ, LV, RDG et. al. weren’t all that hard to fold in. They were all really small compared to PC.
PC was a merger of two sinking boats. The boats sprung irreparable leaks starting right after WWII. The base traffic just dried up. Manufacturing started moving out of the northeast. The traffic that was left was increasingly imbalanced - loads east, empties west, and/or PC was short hauled - traffic to/from the south - where they got a lousy rate (it was incremental traffic once upon a time). The high-value/high rate finished goods were diverted to highway and attempts at intermodal succeeding in volume but failed in profitability (once this was incremental traffic, too). Both roads had passenger traffic that dried up, too. The NYC made the single largest purchase of coaches right after WWII only to see ridership plummet.
The savings from the merger were just at the staff level. There really weren’t many overlapping facilities to be combined and the best “new” service was to extend that low-rate north/south traffic up to New England.
Both roads had pretty much put their capital investment in the RR on hold in the early 1950s
It was WAY bigger than that! Cars became a big part of our culture. People wanted, new flashy cars. They wanted to move up from Chevy to Pontiac to Olds to Buick to the ultimate…a Caddy (unless you were a Ford, man…) They wanted, new, fast, highways! People didn’t want highways because they brought money (pork) to their town. They wanted highways to DRIVE on!
People took driving vacations on crappy highways in the early 50s even when the driving was slow, the hotels and motels were sketchy and there was no A/C. They could have taken a faster, smoother, air conditioned streamlined train - but they didn’t. Why? Because they could go in their shiny new Chevy!
Of course, there were (are) unintended consequences that were unknown or poorly understood at the time. But, that’s now - not then.
If Amtrak had been a Fed agency, the RR unions would have been the big losers. Remember, RRs are covered by a completely different set of labor laws than other industries - and governement. It was rail labor support for Amtrak that helped get Democrat votes. It wasn’t because it was a tool needed for cost control by management.
Yes, it was. But, the lions share of the money to build and maintain the interstate highways came from
…wait for it…
vehicle fuel tax paid into the highway trust fund - not property taxes paid to local gov’t by RRs. There are indirect subsidies and ancillary costs not born by the trust fund, but the $$ to build them came from fuel tax - and it was a rather popular tax when it went in.
It was more than that. Once you could make a round trip in a day, nobody was going to spend two nights on a train to make the same meeting.
The RRs understood “time is money” very well. CB&Q pushed speed starting with the Pioneer Zephyr. MILW had those 100 mph Hiawathas. ACL had 100 mph service to Miami, PRR and NYC pushed NY-Chicago down under 16 hours. PRR had sub-four hour Congressionals. But, they couldn’t even keep up with propeller driven, fly thru the weather, not quite so safe as today, airplanes.
Trains work where they do the “time is money” thing better than the competition. Metroliner. Acela. Surfliner.
I can still remember my dad in the early 1950’s, when he was still making business trips from Chicago to Detroit, had to switch over from the train ~5hrs) to flying and making it a one day trip, rather than two rides on the Twilight Limited, with an overnight in Detroit. But one time he got stuck in bad winter weather in Detroit and took it back home.
The Chicago-Detroit area corridor has promise, although most businessmen would be heading for Ann Arbor or suburban Detroit. But the times will need to come down some to be competitive with air: currently 1 hr, 5-10 min. vs ~ 5 hrs. on the Wolverine.
Give them a decade to get a couple year’s work done and they’ll have it down under 4 hours. Just fast enough, I think, particularly for people making a day trip to Chicago.
Given the traffic on I 94, it could be very competitive for Chicago folks heading to Ann Arbor. Corridors like this and others are the future for Amtrak, or whoever picks up the mission.