A good example of why RR's lost pasenger service

Cowford wrote:It's 1956. You live in Boston and have to travel to Pittsburgh, a medium-distance lane. The NH offers six departures per day that connect with PRR at Penn Station. Once on the train, it takes you 14-17 hours to arrive in Pittsburgh.

Are you sure? It is about 500 miles between Boston and Pittsburg, according to geobytes.com. So the train had to travel at an average speed of 35 miles per hour through the whole trip to take 14 hours? That seems a little slow, especially for 1956 when I assume the tracks were maintained better that now. 500 miles at the average speed of 60 mph would take about 8 hours. I guess the total trip duration would be 10-11 hours to allow for travel to and from the RR station.

Cowford wrote: Back to 1956... TWA offered 10 connecting flights a day in the same lane. Those flights took about 4-5 hours. Only two of the ten flights arrived between midnight and 6am. The round trip flight fare was $465 (in today's dollars), and (for you subsidy sleuths) was subject to a 10 percent tax. (Were rail fares taxed then??? I've no idea.)

Well if the flights took 4-5 hours the whole trip would take 7.5-8.5 hours, wouldn't it? Two hours to travel to and from the airport, one hour for security checks, half hour to pick up luggage? Not that much dramatically different from the rail road. And again, if government did not especially favor the airlines and they had to pay for traffic control and the airports, the ticket would've been a lot more expensive. And then perhaps air travel for medium range distances wouldn't be as popular. But again, we can't really change history...

Cowford wrote: It offered such a productivity improvement over rail, promoting those new fangled travel options was in the nation's best interest.

I think this is true only for long distance travel, for example Boston to SF.

Yes. Those transit times are pulled from 1932 and 1956 Official Guides. Today, the Amtrak trip takes... 14 hrs. Considering that 2/3 of the ~625 mile route is relatively high speed, it's hardly impressive.

"Well if the flights took 4-5 hours the whole trip would take 7.5-8.5 hours, wouldn't it? Two hours to travel to and from the airport, one hour for security checks, half hour to pick up luggage?"

A few points: Assuming that everyone lives inside the train station and an hour from the airport is hardly realistic. And it's doubtful there were security checks in 1956 (nor are they near that time-consuming, even today.) PS: Today, the flight takes less than 2hrs and is 45% cheaper (!) than Amtrak coach.

"I think this is true only for long distance travel, for example Boston to SF."

Didn't I just illustrate the case for productivity on this medium distance lane!?!?!

Well, Mr Meehan asked the question what the railroads would have done in a more "rational" regulatory environment. I'd look to 1980 for that, when the transportation industry was deregulated. Railroads shed unproductive lines, forced the modernization of work rules, adjusted pricing, and consolidated. Airlines did much the same thing, as did truckers. (Those that didn't died.) So if the 30s-50s were re-lived in a deregulated environment, you may well have seen less development subsidy for air/road due to more demand for those modes, as railroads would have shed their marginal line segments/services that much sooner. It's doubtful that this scenario would have prompted wide-scale investment in passenger rail corridors, especially as the US didn't have nearly the population density as it has today. (the US population has nearly doubled in the last 50-60 years.)

Cowford wrote:Mr Meehan asked the question what the railroads would have done in a more "rational" regulatory environment.

Correct. Mr.Meehan didn't say anything about deregulating the railroads or anything else in the 1940s. He asked what if say New York State had compensated the passenger carrying railroads of New York for construction of the New York State Thruway by telling them: Identify the facilities you have that are primarily for passenger traffic and we'll take them off the tax rolls.

That might've lowered costs enough to provide a real incentive for the railroads to go after the medium distance markets. The New York Central couldn't compete with TWA, agreed. But they should've been able to compete with Greyhound.

Back in 1956 the AAR wasn't asking the government not to build interstate highways or provide runways and air traffic control for commercial airlines. They were asking them not to saddle the taxpayer with a lot of the costs while forcing the railroads to provide money losing passenger services whether those railroads wanted to or not.

It wasn't just the passenger trains. I believe the regulatory policies of the 1950-60s ultimately bankrupted most of the Northeast's railroads.

As for Boston-Pittsburgh via NH-PRR, we can both come up with examples. How about if you lived in Old Saybrook and wanted to go to a matinee on Broadway and then have dinner. Would you have flown? Taken I-95 (Route 1)?*** How much does it cost to park for 6-7 hours in Manhattan's theatre district? What if you want to have a couple drinks with dinner?

*** - I-95 was under construction in 1956.

[edited once]

Ok, so Mr Meehan's references to "regulatory climate" and "rational policy in regulating the railroads" actually had to do with government policy on modal subsidies, i.e., if rail passenger service was subsidized more heavily before the 60s, would it have made a difference? That is a bit confusing; they can both be related to transportation policy but are two distinct issues.

I'd doubt that the alleviation of the tax burden for rail passenger-oriented property would have made a difference. Greyhound wasn't NYC's headache as much as passenger vehicles.

"How about if you lived in Old Saybrook and wanted to go to a matinee on Broadway and then have dinner. Would you have flown?"

In a way, yes - you would have had to have flown out of the restaurant in order to catch the last train back home to Old Saybrook (no. 45, "The Commander") out of GCT at 8pm! (If it's Saturday, get the carry-out: the last train is at 6pm [no. 28, the "Gilt Edge"]) : )

Cowford wrote:Ok, so Mr Meehan's references to "regulatory climate" and "rational policy in regulating the railroads" actually had to do with government policy on modal subsidies

Finally you're beginning to catch on.

Let me ask you something. Instead of personalizing this, Mr. Meehan said and Mr. Meehan wrote, have you ever read the the copy put out by the Association of American Railroads and carriers like the New Haven and New York Central back in the 1950s? That's what I'm referencing. Their postions, the policy changes they were advocating. (You won't find them in your Official Guides, btw.)

Maybe you need to do a little homework first?

"Finally you're beginning to catch on."

As I stated, your placement of regulatory policy and modal subsidy in the same bucket is confusing. And yes, I've read old articles on the situation in the 50s, thanks. Listen, nobody is denying the railroads were not operating on a level playing field from regulatory and subsidy standpoints back then. But there were A LOT of other factors working against rail pax service: labor, equipment cost and utilization, inefficient route networks, to name a few. It's interesting to look at the argument from the opposite perspective: There were reasons (some justifiable, others not) that government favored air and road development. What were they and why?

BTW, I've been referring to your comments by your surname in trying to be respectful; I'd ask you do the same.

Hi folks,

Just a gentle reminder for everyone keep this debate on a friendly level, please.

Carry on!

Charlie

"Finally you're beginning to catch on."

Sorry if that offended you I meant it as a compliment.

Cowford wrote:As I stated, your placement of regulatory policy and modal subsidy in the same bucket is confusing...nobody is denying the railroads were not operating on a level playing field from regulatory and subsidy standpoints back then.

The two statements you made (which I'm quoting above) seem contradictory to me. It's confusing but no one's denying it?

Please, don't be offended but I'm not sure what you mean or what you're getting at exactly. What do you mean by the "same bucket?"

I think we're talking past each other. My interpretation of your comments was that the regulatory climate worked against railroads (which I agree) and that you were considering air/road subsidies as part of it. I also agree that the issue of subsidy worked against rail pax service. However, I was drawing the distinction that regulatory policy and subsidy policy are separate and distinct issues that fall under the umbrella of government transportation policy. To take the 50s example, railroads were regulated to death and not largely subsidized. Air travel was also strictly regulated, but also subsidized. While related but a bit off topic, It's interesting to note that todays freight railroads are largely (commercially) deregulated and financially healthy... and ironically, government policy has shifted to favor rail and subsidies for the industry are increasing every year. Should truckers cry "foul"?

Edited for clarity

Cowford wrote:My interpretation of your comments was that the regulatory climate worked against railroads (which I agree) and that you were considering air/road subsidies as part of it.

What I actually wrote -- or at least meant -- was that the railroads claimed they were laboring under regulations that had changed little from the horse-and-buggy era and that took no notice of the competition they faced by the mid-20th century. The regulators did seem to act as though their main task was to protect the public from railroads that still had a near monopolistic hold on public transportation.

I hesitate to call the Interstate system or airport construction a "subsidy." Having been around back then I never had the feeling that was what government was trying to do. They were just giving the airlines and the truckers/bus companies a really good deal by providing excellent facilities at minimal cost while ignoring the effect it was having on the railroads.

My feeling was there really was no policy, at least one that was fully thought out.

Back around 1960 the railroads of New York State asked for a hike in passenger fares, coach and commuter. The examiner who ruled on the case stated he was giving enough of an fare hike to help the railroads cover their increased costs but "not one penny towards their return on investment." That statement, that decision, earned him the undying hostility of the New York Central's President Alfred Perlman.

To the state regulator it seemed fair -- admirable in fact -- to force the railroads to use profits from the freight service to provide investment for the passenger service. He stated that it was what the riding public had a right to expect. Except by 1960 there was very little freight profit in New York and the roads needed every dollar they could get their hands on in order to compete with the truckers.

There was just a total disconnect between the regulators, government leaders and the reality of the railroad industry.

Regulators like the one described thought they were protecting the ridership. By starving the railroads of capital they were actually hurting us. Plus doing great harm to the railroads that we all depend on to some extent.

Tommy Meehan wrote:I hesitate to call the Interstate system or airport construction a "subsidy." Having been around back then I never had the feeling that was what government was trying to do. They were just giving the airlines and the truckers/bus companies a really good deal by providing excellent facilities at minimal cost while ignoring the effect it was having on the railroads. .

The Eisenhower Interstate Highway System was conceived after World War II as beneficial to the national defense in order to rapidly move troops to guard against or repel an invasion. Likewise, airpower came to its own during the War, and the thinking was that a robust network of civilian aircraft would be a valuable resource to move troops in a national emergency, both domestically and to overseas theaters. The railroad infrastructure during this era was still in relatively good shape and intact, and it was likely seen as not needing any particular government intervention. Into the 1960's and 1970's the railroads truly deteriorated but by that time were viewed as far less essential to national security than highway and air. The very real benefits to the railroad competitors were incidental, not the primary purpose.

What is driving the movement, such as it is, to improving passenger and freight rail today is the perception that diverting passengers and freight from other modes back to rail will result in beneficial environmental impacts. There are very real alternatives to passenger rail that could be implemented with appropriate legislation such as automated guidance and power systems for electric automobiles. Drivers would only need to drive to an Interstate and thence let the guidance system take over operation until reaching the desired exit. The technology exists. Electric automobiles already are and are likely to be further subsidized by federal and state legislation. Whether the automated guidance system will come remains to be seen. Nextgen air traffic control is being implemented at a very substantial cost (see http://www.faa.gov/nextgen/ ) and land based systems could be next.

Ken W2KB wrote:The Eisenhower Interstate Highway System was conceived after World War II as beneficial to the national defense in order to rapidly move troops to guard against or repel an invasion. Likewise, airpower came to its own during the War, and the thinking was that a robust network of civilian aircraft would be a valuable resource to move troops in a national emergency, both domestically and to overseas theaters.

Ken with all due respect, there is military value to the Interstate Highway system and public air facilities, absolutely, but to say or imply that is the primary reason they were built is to deny history. Eisenhower emphasized the military value of the highway program in order to get legislation passed -- this was in the nuclear age, mind you -- and continues to be criticized for that to this day.

The road builders, the oil companies and the automakers lobbied a lot harder for the Interstate highway system then did the military.

Regardless of the physical condition of the rail system, in the 1950s the Association of American Railroads was lobbying to have higher user charges implemented for commercial users of highways, airports and air lanes. The AAR and its members wondered how they were supposed to compete effectively against carriers whose facilities were provided at low cost by government.

One of the problems the AAR encountered was the different attitudes on the part of the various member railroads. This made it difficult to come up with an effectve policy. Saddled with high costs and large passenger services, by the mid-50s the eastern railroads were considering direct government support of passenger service. The New Haven wanted outright cash subsidy. New York Central (and I think the Pennsylvania) wanted property tax relief. Erie's Paul Johnston in 1956 began calling for a government takeover of passenger and commuter services with the roads leasing back the equipment at low cost and operating the service under contract.

Southern and western roads wanted no part of active government support (in newspaper advertising they called it "Socialistic") and lobbied against it. You know what they say, a house divided against itself will soon fall!

One effective outcome of all this turmoil was passage of the Transportation Act of 1958 which, though it did not go far enough, did provide some relief. Probably as important, the lobbying and Congressional hearings leading up to passage of the Act highlighted the problems the rail industry were facing and set the stage for changes that were to come in the future

I had to pull out my dusty old April 1959 copy of TRAINS, with the cover story, "Who Shot the Passenger Train?" On page 43, there's a breakdown of rail paseenger expenses. Taxes are about 8% of the total... the total being $162 for every $100 of "passenger"* revenue collected. Contrasting taxes with labor costs (24%) and equipment (23%) puts the issue in perspective. While the rail's tax burden was exactly that - a burden - elimination of this on its own would not have stanched the bleeding.

Funny that on the New England forum, there's a discussion about rail station locations in Portland ME... where a rail station would be tax exempt and bus terminals are apparently not. Talk about a reversal in discriminatory practices!

*The $100 included $33 in mail and express.

Cowford wrote:Taxes are about 8% of the total...the total being $162 for every $100 of "passenger"* revenue collected.

First, are we talking about property taxes? (Btw, the diagram in that issue of the "downtown station" is Albany Union Station, it was revealed some years later, flip-flopped to hide its identity.)

Second, I can't believe roads like Central and New Haven were losing 62 cents on every dollar of passenger revenue. Is that possibly the ICC formula loss for the entire industry (which included return on investment)?

You'll see New Haven came pretty close to covering passenger service operating costs most years if you can find their financial results. For that reason I think an 8 per cent reduction in expenses would've made a big difference to carriers like the NH that still had a decent passenger traffic.

Btw I have a copy of that issue somewhere and I know Morgan wrote a lot of the same things I've been saying. That's where I first began to learn of it.

The exhibit only states "taxes assignable to passenger service." I presume this is primarily property taxes; it may also include equipment excise taxes, etc. There is no reference as to where the stats originate, but it's implied to be a US average. Given that the passenger crisis was more severe in the east, possibly losses were greater than stated for carriers in the Northeast. It should be noted that depreciation is included, so the loss includes at least some capitalized costs, not just operating expenses... but even services that cover operating costs only are not sustainable.