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’s 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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