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         Unified Ownership of the Rails

       By Jalexson

        Copyright 1992

      The United States needs to eliminate the practice of allowing individual freight transportation companies to own and monopolize railroad tracks. Requiring railroads to turn over ownership of the tracks to a quasi-government corporation in exchange for stock would be the most practical way of accomplishing this goal. Unified ownership would benefit the public and the railroad companies.

A railroad might, for example, receive 2,000 shares of stock for 1,000 miles of track in excellent condition; 1,000 shares of stock for 1,000 miles of track in good condition; and 500 shares of stock for track in poor condition. The corporation would be able to sell stock to the general public to finance track improvements. Government involvement would facilitate use of eminent domain to acquire track and expand right of ways to allow construction of additional track to allow two way traffic.

The corporation would charge users a fee based on ton miles. It would either operate its own track maintenance division or pay other companies to maintain tracks. Those railroad companies that currently maintain their tracks effectively might expand their track maintenance divisions to maintain additional tracks.

Railroad company decisions to abandon tracks to various communities threatens the national economy as a whole as well as the economies of the specific communities involved. Once the tracks to a community have been removed, it can be difficult and expensive to reestablish rail service to the community. State(or federal) governments need to at the very least seriously consider taking ownership of tracks scheduled for abandonment so that other smaller companies or individuals may use them to insure continued rail service.

Reducing the areas served by railroads concentrates economic development with a resulting inflation in property values that increases business costs. Decisions about what areas of the country are open for development should be made by government officials answerable to the people, not by corporate executives only interested in their own pocketbooks.

Private ownership of railroad rights of way is a holdover from the 19th Century when rail transportation companies began building railroads through the eastern states. Private money raised through sale of stock and other investment mechanisms financed construction of the early railroads.

Federal government subsidies in the form of generous land grants provided the necessary financing for construction of the major western railroads. The eastern railroads received government assistance in obtaining land for right of ways in the form of using the power of eminent domain to take land from those who didn't want to sell.

Private ownership of rights of way continued because the railroad companies had the necessary expertise to construct the tracks, the government and state governments did not want to oversee the operation and maintenance of tracks, and many government leaders felt that such activities should be handled by the private sector.

This attitude existed in part because of problems the states encountered early in the century when they borrowed money to construct canals. Many of the states entering the union in the last half of the 19th Century had constitutional provisions prohibiting the state from financing "internal improvements".

The need for government to construct paved highways to handle individually owned cars and trucks forced a modification of this attitude to allow government to finance construction and maintenance of rural intercity highways. We need to further modify this attitude to allow government to either take ownership of railroad rights of way or establish a separate corporation to own the tracks.

In the early days of railroads, trains hauled everything from small packages to large bulky items to people. Today major rail transportation companies have trouble handling small loads profitably. They prefer to handle large amounts of an item or large numbers of items between specific destinations. Using a large locomotive to move a few rail cars to a single community costs them too much.

These facts do not mean rail service to small communities cannot pay the cost of maintaining the tracks. Instead, large rail transportation companies have not found a way to handle service to these communities profitably, including paying taxes on the rights of way. Smaller companies using different equipment and operating procedures might be able to generate sufficient income to make a profit and maintain the tracks. Use of these tracks would not need to be limited to one company or to companies that only transport goods by rail.

Highways, particularly freeways, have replaced railroads to some extent, but railroads can handle some goods such as grain more effectively than highways. Trucks operating on highways must observe weight limits designed to protect the roadway and must observe length limits designed to protect other motorists. A truck operating on a railroad track(the technology for this has existed for 20 years) can pull longer and heavier loads with the only limit involving the horsepower of the engine and the amount needing to be shipped.

Unified ownership of tracks would allow more flexible operation than the current system in which a single company owns and uses the tracks. Specific companies could use lines either by paying a user fee or using a lease arrangement in which a company would be able to use the right of way in exchange for maintaining it according to government standards. Companies that have effective rail maintenance operations might want to set them up as subsidiaries that would also maintain other tracks.

Tracks could be used by a wider variety of vehicles than large rail transportation companies use. Moving goods or people along railroad tracks does not require large boxcars and locomotives. Various types of vehicles can be equipped to use the tracks. For example, railroad companies sometimes use pickup trucks for track inspections. Trucks pulling multiple trailers along the tracks could pull individual trailers to the final destination or could leave trailers at various locations for a local trucker to pull to the final destination.

The state could conceivably allow farmers living along the tracks to use the tracks to move their grain to the nearest elevator. For safety reasons such a practice would probably require sections of track as one way at specific times during harvest. The farmer could take heavily loaded grain trucks to the elevator using the tracks and return the empty truck home using local roads.

Tracks could be used by school buses in areas of the state where road bridges cannot handle the weight of the bus. Railroad bridges generally can handle much heavier loads. Intercity buses pulling cargo trailers could operate more profitably using tracks than highways.

Many large companies need rail service for their plants. Communities without rail service cannot attract plants such as the car plant built in a rural area of Tennessee a decade ago. A plant producing thousands of cars needs to receive many parts and other materials by rail because too many trucks would be required to bring these goods by highway. Completed cars need to be shipped to distant distribution centers by rail for the same reason.

The decline of rural communities can adversely affect even large urban centers. Residents and businesses in small communities purchase goods and services from businesses in large urban areas. The existence of healthy small communities provides a location for some of the people and businesses that would otherwise have to crowd into large urban centers causing increased traffic and other problems.

If the federal government doesn't want to force unified ownership, state governments should seriously taking ownership of short line railroads.

States should use a "carrot and stick" approach to encourage government track ownership. The "stick" would involve attempting to force railroads to properly maintain all routes using whatever laws can conceivably be interpreted as allowing the government to apply such force.

The "carrot" would involve allowing railroads to abandon properly maintained lines by deeding them to the state. The state would then allow other companies to use these lines either by charging a user fee or using a lease arrangement in which a company would be able to use the right of way in exchange for maintaining it according to state standards.

The state needs to do everything possible to maintain the existence of railroads throughout the state. Constructing new rail lines can be difficult and expensive and thus destroying track connections to a city may permanently isolate it from the national rail network.

The recent problems with the Union Pacific demonstrate that railroad companies have become to large to manage effectively. The Union Pacific has had trouble maintaining tracks and delivering goods on time. It's plans to concentrate rail traffic on a few tracks threatens to hamper automobile traffic in cities along the route. The noise of more trains passing through residential areas could also be a problem.

Railroad accidents, especially those involving hazardous materials, and increased rail traffic will eventually create public sentiment for government action against rail companies. Government could break up large rail transportation companies, impose heavier fines for failing to maintain lines, force railroads to relocate urban lines, or elevate tracks.

Railroad companies continue to exhibit "the public be damned" attitude they had during the 19th Century. Rail executives fail to recognize that the American people and their government are losing patience with the railroads.

Until a few years ago, railroad companies didn't see any need to put reflective material on rail cars to reflect automobile headlights at unmarked rail crossings or to add ground level "ditch lights" on locomotives to supplement the single headlight the engineer uses to see the track ahead. If motorists failed to see the train in time at night, it was their fault, not the railroad's. Concern about fatal accidents caused Congress to pressure the railroads to change their attitudes and adopt safer practices.

Rail freight companies and their customers would actually benefit from unified ownership. Companies that ship goods by rail have to pay costs that companies shipping goods by highway don't have to pay.

For example, they pay the full cost of maintaining rail lines, but only a portion of the cost of maintaining highways. Passenger vehicles pay a significant portion of highway maintenance costs. Except around some metropolitan areas, rail passenger traffic isn't significant enough to pay any rail maintenance costs.

The portion of rail maintenance costs paid by small shippers is declining as rail freight companies shift more of their business to large shippers. Similarly, shippers in areas railroads have abandoned no longer pay any portion of the cost of maintaining railroad main lines.

 The rail transportation system in the United States is being gradually dismantled much to the country‚Äôs long run economic disadvantage. Unified ownership of the rails would help maintain that network. Lines would no longer have to be abandoned because the company owning them cannot afford to maintain them. Unified ownership would allow greater use of the rails by opening routes to more companies, including trucking companies that would be able to shift some truck traffic from highways to railroads.




 I also write at Mediard

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