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Old December 23rd, 2015, 08:51 AM   #3081
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Grand Central Terminal, New York



http://secondavenuesagas.com/2012/04...ss-escalators/
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Old December 26th, 2015, 05:51 AM   #3082
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Why Penn Central failed but other railroads survived?
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Old December 26th, 2015, 05:58 AM   #3083
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Two railroads with giant money losing passenger and commuter operations merged and the deficits of these operations outweighed the freight revenue brought in.
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Old December 26th, 2015, 06:08 AM   #3084
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Is it because of excessive infrastructural debt?
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Old December 26th, 2015, 06:11 AM   #3085
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Yes in addition to federal subsidization of air travel and high ways and immensely burdensome federal regulations, some of which still exist like crashworthiness. These really hampered American railroads.
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Old December 26th, 2015, 07:27 AM   #3086
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Railroad monopolies in the 1800s could play favorites with goods shippers, overcharge small farmers, could cripple a small town by bypassing it or closing its station, etc. They underpaid their workers while the bosses and owners were greedy robber barons. Railroads often got government support to build new lines and there was always a lot of corruption and waste involved.

So in that era, heavy federal regulations of railroads made sense. Railroads were forced to be common carriers, forced to maintain a certain degree of passenger service, had to have more generous worker benefits, etc. This insured that other businesses could pay a fair market rate for shipping and people living in rural places dependent on trains for mail and passenger service wouldn't be cut of.

However by the middle of the 20th century, trucking and air travel made the transportation industry competitive. The old regulations were no longer necessary since competition meant railroads could not be greedy and instead were being held back by them so they were gradually removed. Amtrak took the burden of passenger service.. In Then in 1980 there was the Staggers Act which greatly deregulated rail transportation in the US. This revived American freight rail and brought it back from the severe decay it was suffering in the 60's. But it also allowed "Merger Mania" and some other things so its contentious. But whatever.

Incidentally there could be a lesson here for how we regulate telco's and internet service providers to keep people and businesses who need the internet(all of them) from being railroaded by greedy companies like Comcast. The best strategies are Net Neutrality and supporting more competition in the marketplace. The worst strategies are when cities make deals that give them exclusive rights to areas in exchange for financing those wires in the streets. And we don't necessarily need a state run internet company, just break up monopolies and force them to be common carriers were bandwidth costs are like tariff rate per ton of cargo on a railroad.
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Old December 26th, 2015, 08:02 AM   #3087
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Thanks for your explanation. Free telecom market should be good.
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Old December 26th, 2015, 12:59 PM   #3088
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Quote:
Originally Posted by zaphod View Post
Railroad monopolies in the 1800s could play favorites with goods shippers, overcharge small farmers, could cripple a small town by bypassing it or closing its station, etc. They underpaid their workers while the bosses and owners were greedy robber barons. Railroads often got government support to build new lines and there was always a lot of corruption and waste involved. So in that era, heavy federal regulations of railroads made sense. Railroads were forced to be common carriers, forced to maintain a certain degree of passenger service, had to have more generous worker benefits, etc. This insured that other businesses could pay a fair market rate for shipping and people living in rural places dependent on trains for mail and passenger service wouldn't be cut of. However by the middle of the 20th century, trucking and air travel made the transportation industry competitive. The old regulations were no longer necessary since competition meant railroads could not be greedy and instead were being held back by them so they were gradually removed. Amtrak took the burden of passenger service.. In Then in 1980 there was the Staggers Act which greatly deregulated rail transportation in the US. This revived American freight rail and brought it back from the severe decay it was suffering in the 60's. But it also allowed "Merger Mania" and some other things so its contentious. But whatever. Incidentally there could be a lesson here for how we regulate telco's and internet service providers to keep people and businesses who need the internet(all of them) from being railroaded by greedy companies like Comcast. The best strategies are Net Neutrality and supporting more competition in the marketplace. The worst strategies are when cities make deals that give them exclusive rights to areas in exchange for financing those wires in the streets. And we don't necessarily need a state run internet company, just break up monopolies and force them to be common carriers were bandwidth costs are like tariff rate per ton of cargo on a railroad.
Additionally, I think that was also what was done poorly: we nationalized service but not the infrastructure needed to run it. We simply removed that burden from the private railroads...but never gave Amtrak the assets it needed. In other places - like the UK - they've done the opposite: the infrastructure is largely nationalized, but service is often run by concessions, not ideal either.

For that reason, it always perplexes me that Amtrak gets such a bad rap as being inherently uncompetitive and unattractive to consumers - and that people seem to think the NEC is the only place worth investing in. Both are completely false, for similar reasons.

People overemphasize the burden of regulations and underemphasize the benefits. Like the crashworthiness standards... Removing it won't magically solve all problems, because it was largely a response to the actual root cause ot those problems: poor funding.

It's hard to implement a technological solution ( e.g. PTC) when there's no money to fund it. Instead of technologies to prevent crashes, it's more viable to ensure limited damage.

But I guess it's more fun to carry on like the FRA is just that out of touch with reality...
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Old December 26th, 2015, 09:07 PM   #3089
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But I guess it's more fun to carry on like the FRA is just that out of touch with reality...
You could say they've been... Railroaded... on that subject...?
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Old December 28th, 2015, 10:29 AM   #3090
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Quote:
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Why Penn Central failed but other railroads survived?
There are a whole host of reasons.

To begin with, rail shipping volumes were on the decline. There was much more rail infrastructure between Chicago and the Northeast than was needed.

Secondly, the merger was an internal consolidation, the wrong move entirely. Successful mergers largely extended market reach; the Penn Central did not.

Thirdly, the corporate cultures were fundamentally incompatible. The NYC was innovative and flexible while the PRR was strict and hierarchical.

Fourth, deferred maintenance had all but destroyed almost all non-key infrastructure. On the PRR side, even long stretches of mainline were under slow orders due to deferred maintenance.

Fifth, inept administration. The problem was the the PRR was the one with the bigger problems and it was also had the more dominant management. Most of the NYC's upper-level administrators left after the merger. Perelman wound up at the B&O, the dominant historical railroad in today's CSX. PRR management was stuck in the 1930's way of doing things, except the Standard Railroad of the World ... no longer set the standards.

Sixth, suffocating regulations. Even though the PC was justified as being a way to liquidate redundant rail infrastructure in the region, the ICC tied their hands with abandonment, pricing, and a whole host of other issues. Regulators also demanded the road include the New Haven, which was a financial albatross about its neck.

(Incidentally, this is neither the first nor the last Philadelphia-based company that regulators effectively destroyed by forcing it to merge with a financial albatross. The Philadelphia Savings Fund Society was another such victim.)

The prevailing sense seems to have been "We lose money on every shipment, but we make up for it on volume." Not a recipe for success.

I'll also note that the PC was merely the most spectacular of the major railroad failures of the 1970s. In this decade, the Erie-Lackawanna, Rock Island, and Milwaukee Road all failed outright. (The latter is the most inexplicable, as its failure can be 100% attributed to pure incompetence at the top.)
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Old December 29th, 2015, 06:26 AM   #3091
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Interesting.

To me, the Milwaukee Road covered sort of the same territory as BN and the CNW, and I'm sure Erie Lackawanna had lots of company out east. When those died all that did was remove the extra parallel main lines that all went to the same cities anyways.

But a lot of lines vanished for good when Rock Island croaked. It went more west of what Mopac and Cotton Belt served I think. Who was driving it out of business? SP? MKT was dying a slow death back then.
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Old December 29th, 2015, 06:59 AM   #3092
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Interesting.

To me, the Milwaukee Road covered sort of the same territory as BN and the CNW, and I'm sure Erie Lackawanna had lots of company out east. When those died all that did was remove the extra parallel main lines that all went to the same cities anyways.

But a lot of lines vanished for good when Rock Island croaked. It went more west of what Mopac and Cotton Belt served I think. Who was driving it out of business? SP? MKT was dying a slow death back then.
Well the E-L had a single--exceedingly circuitous--line west of Pennsylvania on to Chicago. Outside of that, its primary claim to fame was that it was the only major railroad to serve all of the Southern Tier markets. The Southern Tier itself was in a post-industrial decline, though. The E-L was always a merger of necessity (a major hurricane in the late '50s destroyed more of the Lackawanna's infrastructure than it had the financial ability to repair, and its occasional partner/occasional competitor, the Erie, essentially saved it by merging with it).

The Rock Island served a lot of Plains markets. The problem was that it didn't serve the major ones particularly directly. This put it at a significant time disadvantage, and the railroad pretty much spent its last thirty years dying a slow death.

What makes the Milwaukee especially bad is that forensic audits actually showed it was profitable. Conditions associated with the massive BN merger in 1970 had massively increased its Pacific Extension traffic -- the route was direct and well-engineered, and the Milwaukee either direct access or trackage rights to all of the Pacific Northwest's major markets.

The problem is that its management was stuck with a granger road mentality, perceiving it as competing against the CNW or Soo Line, and so, instead of abandoning its branches to random grain silos as they lost traffic and focusing on the transcontinental trade, when it invested in its infrastructure at all, it generally malinvested, into older mains instead of its biggest traffic source.

The biggest irony is that -- even with extended deferred maintenance -- the Pacific Extension was profitable right up to the end! An accounting fail of epic proportions -- expenses were all double-booked -- essentially made the MILW's failure the anti-Enron.
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Old January 1st, 2016, 05:18 AM   #3093
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Quote:
Originally Posted by mrsmartman View Post
Why Penn Central failed but other railroads survived?


This is a great question to ask. I am happy to answer this for you as I am a railroad historian

At the time of Penn Central's establishment from the mergers of the Pennsylvania and New York Central Railroads, America's railroad were actually experiencing collapse. Road infrastructure was deplorable and wrecks were common. Many factors played into the collapse of the railroad in the 60s and 70s. As many lines were going bankrupt costumers started turning to trucks and planes. Regulations also had a huge part to play in the destruction of America's railroads. Government regulations on America's railroads were actually very strict, to the extent that a railroad had to get approval from a government body to abandoned a rail line. That is true. Thus the railroads were losing so much money that they could not invest into infrastructure and update their systems. The only answer for survival was mergers.

In the 1950s there were 127 Class I railroads. Today there are around 7.

When the Penn Central failed in the 70s, the growing crisis in America's railroad deterioration had become so disastrous that the federal government decided to intervene. The government took what was left of Penn Central and through it they created Conrail. Conrail was an experiment whose purpose was to figure out what was wrong with our railroads. Even as giant companies like the Great Northern and Burlington Route merged together to create the Burlington Northern, still mergers were failing to save the railroads. By the end of the 70s the Rock Island had failed and the Union Pacific was talking about acquiring the Missouri Pacific. Many lines were dying. Roads were in horrible condition. Machinery was constantly breaking down and bankruptcies were the norm. But why? This was the job for Conrail to ultimately figure out. And Conrail found the answer.

It was through Conrail when the realization finally dawned on Washington. Government regulations of the railroad was the main killer of the systems. Thus in the early 80s the federal government deregulated the railroads with the Staggers Act. Now let's fast-forward to today. Since the Staggers Act, America's railroad system has experienced a Renaissance.

"Congress passed the Staggers Rail Act of 1980, which instituted a system of balanced regulation in the rail industry, ushering in a new era in which railroads could largely decide for themselves—rather than have Washington decide for them—what routes to use, what services to offer, and what rates to charge. Since Staggers, average rail rates have fallen 43 percent, train accident rates are down 80 percent, rail traffic volume has doubled, and railroads have reinvested $575 billion—their own funds, not taxpayer funds—back into their systems. Balanced, reasonable regulation works for rail customers, railroads, and America at large."

https://www.aar.org/BackgroundPapers...gers%20Act.pdf

http://www.conrail.com/history/

http://transportation.house.gov/uplo...-hamberger.pdf
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Old January 1st, 2016, 05:21 AM   #3094
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Though passenger rail has continually suffered
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Old January 1st, 2016, 05:31 AM   #3095
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That's because Amtrak is an absolute failure. Even the Rio Grande could see the failure Amtrak was going to be. That's why the Rio Grande was the only railroad that refused to handover its passenger service to Amtrak.
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Old January 1st, 2016, 06:05 AM   #3096
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Because of lack of will to develop the basic infrastructure needed to support a passenger system
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Old January 1st, 2016, 06:08 AM   #3097
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The best bet for a passenger system would be high speed rail. That's really the only option for a passenger system in the US.
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Old January 1st, 2016, 06:53 AM   #3098
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Ya but with out regional rail or metro rail systems high speed rail is basically pointless
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Old January 1st, 2016, 09:14 AM   #3099
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Hopefully this year the Gateway Project finally gets funded....and starts construction.
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Old January 1st, 2016, 09:15 AM   #3100
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to that Nexis!
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