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A Nation Derailed

Passenger trains united a continent—can they do so again?

Passenger trains united a continent—can they do so again?

When the wrecking crews came to New York’s Penn Station in the fall of 1963 there was no explosive-fired demolition, no great cloud of dust that settled to reveal the beaux arts station reduced to a pile of rubble. The terminal, which had resembled a great Doric temple, its main waiting room modeled on the Roman Baths of Caracalla, opened in 1910 and represented passenger rail at the height of its efficiency and elegance. But by the early 1960s, ridership was in steep decline, and railroad executives welcomed the infusion of cash that would come from selling the air rights over a block of midtown Manhattan. So the nation’s busiest passenger terminal was dismantled piece by piece and then buried alive, foreshadowing the decline of intercity rail travel.

Despite protests from the public, including leading architects and historic preservation activists, a plan was devised to entomb scores of train platforms underground, topping them with a new modernist incarnation of the city’s main sports arena, Madison Square Garden. A 1963 New York Times editorial lamented that an era of grand public infrastructure was over: “civilization gets what it wants, is willing to pay for, and ultimately deserves. … We want and deserve tincan architecture in a tinhorn culture.”

The same could be said for the last four decades of passenger train service. Now run by Amtrak on a shoestring of federal subsidies, today’s passenger rail has never matched the grandeur represented by the original Penn Station. And as Amtrak this year puts on a nationwide roadshow of exhibitions touting its 40th anniversary, many find little to celebrate in its complicated and controversial history.

Roads to Collectivism

Even the windfall generated by selling its flagship terminal couldn’t save the Pennsylvania Railroad, long the nation’s largest passenger operation. By 1970, the old Roman edifice was dismantled and the railroad entered what was then America’s largest bankruptcy, a scale of corporate failure comparable to the Enron disaster three decades later.

Nixon administration officials scrambled to devise a plan that would maintain vital passenger rail links, particularly in the congested Northeast. The initial blueprint, a government-subsidized corporation with the imperial-sounding name RailPax, was designed to preserve passenger service where there remained enough “public demand.”

The administration was optimistic that passenger rail, under the right management, might even be self-sustaining within three years. As a transportation official told the New York Times, “One of our goals is to make rail passenger travel more attractive and profitable again. We think, especially in a few corridors around the country, that if you can offer the kind of service that you have on the Metroliner [the high-speed train running between New York and Washington] you can get people to ride the trains again. We don’t think you need subsidies.”

Amtrak—officially the National Passenger Railroad Corporation, whose marketing department smartly ditched the RailPax name—took over the nation’s remaining passenger lines on May 1, 1971. Nixon’s Secretary of Transportation, John A. Volpe, told reporters gathered beside a Metroliner at Penn Station that “a new era” had begun—he was convinced that Amtrak had “the foundation for what … is destined to become the all-time comeback in the history of American transportation.”

The comeback never came. The Metroliner is no longer considered “high-speed,” and Amtrak’s attempt at European-style high-speed service, Acela, is hampered by the Northeast’s aging and overused track infrastructure. Despite continual assertions that it can be made profitable, Amtrak has received federal subsidies every year since its launch in 1971.

Was passenger rail doomed from the start of the postwar boom, victim of an enormous shift in federal subsidies toward other modes of transit? Stephen Goddard, author of Getting There: The Epic Struggle between Road and Rail in the American Century, argues that “Road and rail, had they competed on a level playing field, might have each thrived without substantial public subsidies. But when a country needs both modes and decides to feed one and starve the other, it ends up shouldering the loser’s dying carcass as well.”

The Dwight D. Eisenhower National System of Interstate and Defense Highways may have had a Cold War military purpose, but car manufacturers had lobbied legislators for free roads from the earliest days of the automobile. As Goddard contends, “Congress’s decision to invest in forty-one thousand miles of broad ‘freeways’ doomed any chance the railroads had to recapture a solid share of passenger traffic.”

The director of the American Conservative Center for Public Transportation, William S. Lind, agrees that America’s love affair with subsidized interstates made private passenger rail unviable. Lind points out that even in 1921 the federal government spent $1.4 billion on highways, and by 1960 the outlay was $11.5 billion. By 2006, 47,000 miles of interstates had been built at a cost of $425 billion.

When critics of passenger-rail subsidies, such as Randal O’Toole of the Cato Institute, suggest that the highway costs are mostly covered by the gas tax, Lind counters with figures from a 2008 Federal Highway Administration paper: the FHA reports that highway user fees, including gas taxes, only cover 51 percent of costs. By contrast, Amtrak in 2010 covered 67 percent of its operating costs from ticket fares and other revenue.

If critics of overly generous highway subsidies like Lind and Goddard are right, Americans appear to have a strange blind spot when it comes to the cost of the open road. Though Eisenhower and other planners of the Interstate Highway System were said to have modeled their plans on Nazi Germany’s Autobahn, traveling on Interstates has nonetheless become a symbol of American freedom and individual liberty. As USA Today founder Al Neuharth wrote enthusiastically in 2006, “toll-free” travel on Interstate Highways is no less than Americans’ “Sixth Freedom”—augmenting the First Amendment’s traditional protections of religion, speech, press, assembly and petition.

Even conservative columnists as sober as George Will have become convinced that highways are the only mode of transportation suitable to a free people. Will insisted in a recent column that advocates of passenger rail are engaged in a socialist plot: “The real reason for progressives’ passion for trains is their goal of diminishing Americans’ individualism in order to make them more amenable to collectivism.”


Will is not the first to suggest the railroads are part of some larger political project. Before their spectacular collapse and nationalization 40 years ago, American railroads symbolized the progress of Manifest Destiny for nearly a century. Among rail’s great champions were President Abraham Lincoln and many of the 19th century’s captains of industry.

But the triumphal narrative presented in school textbooks—centered on the driving of the golden spike by Leland Stanford at Promontory Summit, Utah on May 10, 1869—obscures the complicated relationship between private enterprise and the federal government. It’s a story that begins when a transcontinental link was only a gleam in the eye of Stanford and his partners—Collis P. Huntington, Charles Crocker, and Mark Hopkins—men who would become titans of American business and philanthropy.

In Railroaded: The Transcontinentals and the Making of Modern America, Stanford University historian Richard White describes his university’s benefactor as a dim-witted grocer from San Francisco. Stanford and his fellow rail barons were not the great innovators of their generation, but merely men clever enough to convince Congress to pay for a transcontinental railroad not yet demanded by the market.

White sees a connection between the Civil War and the attempt by Stanford and his associates to create a transportation network that would remain unmatched until the Interstate Highway System: “both involved great risk, immense expenditures of money, a sense of national purpose, and the organizational efforts of a newly powerful national state.” But unlike the clashes of the Civil War, which White characterizes as “personal sacrifice for concrete collective goals,” the transcontinentals were initially about “personal gain for projected public purposes.”

Indeed, Huntington and others intensely lobbied congressmen over mint juleps at Washington’s Willard Hotel and secured huge federal subsidies in the Pacific Railway Acts of 1862 and 1864. Just as the Interstate Highways would be sold to the public almost a century later, the transcontinentals were justified by “military necessity.” In White’s interpretation, the transcontinental efforts of the 1860s—as with many pork-barrel highway expansions—were irrational: perhaps a market-driven process would eventually have built them, but they were “ahead of schedule … exercises in nation building” that nonetheless “opened the question of a national market and the relation of the East and the West.”

The 1860s kicked off decades of railroad building, resulting in a network that at its peak—around the time the first Penn Station opened in 1910—reached all corners of the continent with 250,000 miles of track. Today Amtrak still runs trains along much of the original transcontinental route from Omaha to Sacramento—but only operates 20,000 miles of railway nationwide. And passenger rail continues to be hobbled by the mixed legacy of the transcontinentals. The collusion between the speculators and the state in the 1860s unleashed a backlash of anti-monopolist legislation and union organizing that would later bind the doomed Pennsylvania Railroad of the 1960s, and collective bargaining continues to restrict Amtrak in the present day.

Uproar over the anticompetitive practices of the transcontinental building frenzy resulted in Congress creating the Interstate Commerce Commission (ICC) in 1887, whose mandate was to ensure that the railroads met their “common carrier” obligations. A custom that extends far back in Anglo-American common law, common-carrier rules require that operators on important rights of way not discriminate in what persons or cargo they offer passage and use a regular system of rates and charges.

This regulatory framework was functional enough until the postwar era of toll-free highways, when many railroads that were only profiting from freight traffic begged the ICC to relieve them of their common-carrier obligation to transport passengers. By the time Penn Central went bankrupt in 1970, it was too late, and the federal government’s offer to take over common-carrier obligations was the mechanism by which passenger rail was nationalized in the form of Amtrak.

Shortly after the creation of the Interstate Commerce Commission, railroads also unwittingly gave birth to the modern labor movement. Eugene V. Debs’s American Railway Union, organized in 1893, sought to create a counterbalance to the railroads, which had recently confirmed their corporate personhood status in the landmark Supreme Court case of Santa Clara County v. Southern Pacific (1886).

Debs’s well-intentioned initiative to protect workers had unintended consequences for the railroads. Labor agreements would burden passenger rail companies with fixed costs that made restructuring difficult. In 2003, a Congressional Budget Office report noted that “under existing labor agreements, Amtrak is obligated to give workers who lose their jobs when service is discontinued up to five years’ pay and benefits” and estimated that a full shutdown of Amtrak would result in over $3 billion in benefits claims.

Look Under the Rail

Since its beginnings 40 years ago, Amtrak has insisted that it can become a self-sustaining operation, largely based upon claims like those made in 1971: in high-traffic, high-density corridors like the Northeast, there is sufficient consumer demand that passenger rail can operate at a profit. There has always been some truth to this line of reasoning, but it ignores a question that is at the heart of interstate transportation policy, both for highways and railroads: who pays the enormous costs of building and maintaining infrastructure? Interstate highways were only made possible through large federal subsidies—handouts not unlike those that created the grand railway network in the late 19th century.

Amtrak took ownership of the Northeast Corridor infrastructure in 1976. At the time, this was thought to be a great boon to its nascent takeover of passenger rail. Outside the Northeast, Amtrak must still defer to the traffic-control centers of the freight railways, but between New York and Washington, D.C. it is both owner and operator. Yet parts of that overburdened corridor have not seen a significant upgrade since the 1930s, and Amtrak has struggled to maintain it.

Today there are again calls to privatize some passenger-rail operations, with Rep. John Mica (R-OH), chairman of the House Transportation Committee, emerging as the leading advocate. Mica has caught on to the problem understood as far back as the 1870s by Charles Francis Adams, who wrote that from the railroad’s beginnings in Britain, lawyers had thought that “the proprietor of the road-bed and the carrier over it were to be different persons.” Building and maintaining railroad infrastructure is a wholly different kind of operation than running passenger service over it. Amtrak can only claim its Northeast Corridor turns a profit because, as policy wonks like to put it, that balance sheet only accounts for “above the rail” costs.

Amtrak essentially operates three kinds of service: potentially profit-generating Northeast Corridor trains; state-subsidized short-haul routes in population centers, such as the regionally branded “Amtrak California” service; and long-haul routes like the California Zephyr, which runs 2,438 miles from Chicago to Oakland.

Outside the Northeast Corridor and busy short-haul commuter routes like Amtrak California, freight companies maintain the tracks for long-haul services, but federal subsidies must make up much of the shortfall even in “above the rail” operating costs. These trains never come close to turning a profit, and because they are guests on freight-owned tracks, they are often many hours behind schedule.

James McCommons, author of the aptly-named Waiting on Train, spent a year riding all of Amtrak’s trains and vividly describes the frustration of passengers, especially visiting Europeans: “We’re waiting for a bloody freight train? Unbelievable.” “The truth,” McCommons says, “is freight matters more than people, and nearly all the track belongs to the big railroads, not to Amtrak.” McCommons’s California Zephyr arrived in Sacramento 62 hours after leaving Chicago, 15 hours late.

The leading passenger rail advocacy group, the National Association of Railroad Passengers (NARP), worries that Congressman Mica’s privatization approach may have a variety of negative consequences. Ross Capon, NARP’s director, is particulary concerned that private real estate interests might acquire valuable, publicly-owned property along the Northeast Corridor “for a song.” And long-haul routes are important to maintain at a basic level of service, says Capon, because one day there may be demand for “more and better service.”

NARP and its leadership—who were lobbying for passenger rail even before Amtrak’s formation in 1971—have the confidence of a regime-in-exile, with Capon convinced that economic factors will soon allow passenger rail to make a return. The central issue here: the rising price of oil, which Capon is convinced will soon make intercity rail more attractive.

But Capon seems to understand that the case for rail has to be more than a wonky public-policy debate with one side showing its charts and graphs and the other side showing a different set of projections. He mentions that the late Paul Weyrich, founder of the Free Congress Foundation and advocate for passenger rail, understood that even conservatives could be appealed to on the grounds that the traveling public should “have a choice.”

But the automobile generation hasn’t had a real choice for 40 years. The promise of rail has failed to capture its imagination, and visions of European or Japanese-style high-speed rail on these shores have muddled the picture of what can be done affordably with existing infrastructure. William Lind argues that opponents of investment in rail present the options as “high speed or nothing,” when what “enthusiasm for high speed rail is actually doing is kicking the props out from under normal passenger trains.”

Lind instead recommends infrastructure upgrades that would enable trains to run faster and more reliably on existing routes. “Those countries around the world which have built serious high speed rail networks already had excellent, effective networks of regular passenger trains. America doesn’t. We need to bake the cake before we worry about icing it.”

The late Sen. Daniel Patrick Moynihan knew that the case for passenger rail was in part about a less tangible good—the train’s ability to bring a lost dignity back to intercity travel. He long lamented the destruction of New York’s Penn Station and advocated not an expensive and nostalgic reconstruction but a reincarnation in an existing building a block away, the historic and classically proportioned Farley Post Office. Amtrak has balked at the cost of moving its operations, but a new Moynihan Station, one that provides rail passengers a waiting area more attractive and comfortable than a third-world bus terminal, may be the best investment in public relations money can buy.

The automobile and interstate highway system—like the transcontinental railroad before them—were always popularized more by the promise of easy mobility than by endless debates about cost comparisons. As Roland Barthes wrote in the 1950s, “cars today are almost the exact equivalent of the great Gothic cathedrals. I mean the supreme creation of an era, conceived with passion by unknown artists, and consumed in image if not in usage by a whole population which appropriates them as a purely magical object.”

Decades later, trying to restore the image of train travel, Senator Moynihan liked to quote architecture critic Vincent Scully, who wrote of Penn Station that “you used to enter New York City as a King; now you slither in like a rat.”

Railroads have both created and been shaped by varied landscapes and places, including stations built to dignify their surroundings. The Interstates, in contrast, have fostered what James Howard Kunstler called “the geography of nowhere,” a homogeneous America where the strip malls and chain restaurants are the same no matter where one rolls off the freeway. Most of us drive tin-can cars around tinhorn suburbia. Rail once unified the nation, and a revived rail infrastructure might again restore the patchwork of particularity that made the country great in the first place.

Lewis McCrary is a TAC senior editor.

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