Amtrak is A Private Corporation

[the_traveler]

Why do you think Amtrak was formed in 1971? :blush:

It was because the freight railroads did not want to run passenger trains anymore! And why was that? They weren't making money operating passenger trains! After WW2, most people switched to either driving themselves (on roads - especially the Interstate Highway System - built with Government money) or flying (using ATC and airports built using Government money)! :blink:

So if the Government gets out of the transportation business, they would have to be repaid. Right? They can't collect from the states, counties, cities or towns. They're all governments! So you'll have to pay to drive to work, drive to the store to get food, take a bus, fly across country, etc... And the Government can't pay any of it. So your run to the store to buy milk may cost $10,000 or more!

 

[juliusaugustus]

Actually, in Los Angeles it was the newly available automobile that killed the streetcar. People fled the SC and went to cars because of the autos flexibility. Pacific Electric cars went bankrupt in the 30's and was resurrected and, ironically, kept in operation in WWII all the way to the early 50's by government support.

Nonsense and revisionism. What killed pacific electric was not a lack of users but over regulation through paving requirements, union labor, and 5 Cent fares.

 

[juliusaugustus]

Why do you think Amtrak was formed in 1971? :blush:
It was because the freight railroads did not want to run passenger trains anymore! And why was that? They weren't making money operating passenger trains! After WW2, most people switched to either driving themselves (on roads - especially the Interstate Highway System - built with Government money) or flying (using ATC and airports built using Government money)! :blink:

So if the Government gets out of the transportation business, they would have to be repaid. Right? They can't collect from the states, counties, cities or towns. They're all governments! So you'll have to pay to drive to work, drive to the store to get food, take a bus, fly across country, etc... And the Government can't pay any of it. So your run to the store to buy milk may cost $10,000 or more!

Exactly my point Amtrak was a result of government intervention. Trying to solve a problem caused by government with more government. Your exaggerating costs. Not every road would be a tollroad. Streets and other utilities would be owned by those whom live upon them. Intracity rail would return to where it was in the early 1900s save for technology. On an intercity level different modes of transport compete with each other which would drive down prices.

 

[leemell]

I will retract the subsidy partly, with the coming of WWII gas rationing was in effect, pretty much forcing a large fraction of the population onto public transportation, a subsidy of sorts.

"Most historians agree, however, that more prosaic factors are actually to blame: aging rail infrastructure and frequent delays only hastened the downfall of a transit mode that ordinary Angelenos had rejected in favor of the private automobile.

Nathan Masters"

Nathan Masters blogs for Los Angeles magazine on behalf of "LA as a Subject", an association by the USC Libraries and dedicated to preserving and telling the history of the Los Angeles region.

Masters also agreed with this line:

"One should also mention that the streetcars operated at a loss for almost their entire history - they were operated as a loss-leader for Henry Huntington and others, who bought up rural land, started rail lines to it, and then sold the land for subdivisions at a huge profit. Once they ran out of new land to develop, there was no way for the rail lines to remain profitable, so it was only a matter of time before they were either taken over by the city or went bankrupt."

I can tell you that as a child in the late '40s I rode the Red Cars many times and they were nearly empty every time I was on them.

 

[Alexandria Nick]

If we object to the government funding for Amtrak and want to end it, then to be fair about it we also need to defund the interstate highway system, public roads, bridges, all of the airport terminals, the air traffic control system, the city bus systems, interurban commuter rail, and subways which are ALL government owned.Most of the operating cost of Amtrak is paid for by the fares that they collect and the subsidies are only a miniscule small part of the overall transportation budget.

Its nice to offer a suggestion that will save the taxpayer money but if you do this, you must also offer a solution that will solve the huge problem that will remain by any government defunding.

Here is some additional food for thought:

The government employs 55,000 air traffic controllers, technicians and bureaucrats that manage the national air traffic control system. This cost three billion without adding any costs to maintain and run the airports. Total number of Amtrak employees number 20,000.

Many commercial airline pilots were former military pilots trained by the government and cost the private airlines little to nothing to train.

Much of the research to develop new airline technology is paid for by the government. This technology is used by the domestic airline industry for military AND shared for commercial aircraft.

As a whole the commercial airline transportation industry has never turned a profit since its inception. The airlines have been the beneficiary of one of the largest government tax payer subsidies in history.

.

Actually I wouldn't be against the government getting out of the Transportation business.

Air traffic control isn't the government being in the transportation business. Its the government managing a common resource. Having competing air traffic control systems would be a major safety and practicality issue.

 

[the_traveler]

So if the Government gets out of the transportation business, they would have to be repaid. Right?

Not every road would be a tollroad. Streets and other utilities would be owned by those whom live upon them.

And the "owners" of the street will let you drive on it for free? :blush: Come on!

Maybe a cul-de-sac or some dead end road. But other people live on Main Street, Pacific Coast Highway, US route 1, Broadway, etc... You really think all those people are going to let thousands of cars per day drive on "their" road for free, while the owners have to use their own money to pay to maintain "their" road? :blush:

 

[Guest]

So if the Government gets out of the transportation business, they would have to be repaid. Right?

Not every road would be a tollroad. Streets and other utilities would be owned by those whom live upon them.

And the "owners" of the street will let you drive on it for free? :blush: Come on!

Maybe a cul-de-sac or some dead end road. But other people live on Main Street, Pacific Coast Highway, US route 1, Broadway, etc... You really think all those people are going to let thousands of cars per day drive on "their" road for free, while the owners have to use their own money to pay to maintain "their" road? :blush:

If a road is heavily traveled then tolling is justified. Roads aren't free and require maintenance. The Roads are free attitude got us into this mess. Tolling is proven to help relieve traffic. Streets would probably be free to use as to attract customers.

 

[juliusaugustus]

If we object to the government funding for Amtrak and want to end it, then to be fair about it we also need to defund the interstate highway system, public roads, bridges, all of the airport terminals, the air traffic control system, the city bus systems, interurban commuter rail, and subways which are ALL government owned.Most of the operating cost of Amtrak is paid for by the fares that they collect and the subsidies are only a miniscule small part of the overall transportation budget.

Its nice to offer a suggestion that will save the taxpayer money but if you do this, you must also offer a solution that will solve the huge problem that will remain by any government defunding.

Here is some additional food for thought:

The government employs 55,000 air traffic controllers, technicians and bureaucrats that manage the national air traffic control system. This cost three billion without adding any costs to maintain and run the airports. Total number of Amtrak employees number 20,000.

Many commercial airline pilots were former military pilots trained by the government and cost the private airlines little to nothing to train.

Much of the research to develop new airline technology is paid for by the government. This technology is used by the domestic airline industry for military AND shared for commercial aircraft.

As a whole the commercial airline transportation industry has never turned a profit since its inception. The airlines have been the beneficiary of one of the largest government tax payer subsidies in history.

.

Actually I wouldn't be against the government getting out of the Transportation business.

Air traffic control isn't the government being in the transportation business. Its the government managing a common resource. Having competing air traffic control systems would be a major safety and practicality issue.

Yes it is. There are other private ATC system such as that in Switzerland or Canada. Airlines benefit enormously in that they don't pay for the full cost of the FAA's operation.

 

[shelzp]

And this involves me in what way.....?

 

[D.P. Roberts]

As many people have posted every single time this issue comes up, and was referenced previously, Amtrak was formed because the private railroads wanted to stop passenger service altogether. That more-or-less saved existing rail service at the time, but there's NOTHING standing in the way of a private corporation coming in & competing with Amtrak. In 40 years, no one has tried, with the exception of specialties like the American Orient Express / Grandluxe (which went out of business). Anyone who wants to can start a railroad company, manufacture cars, hire non-union staff, and try to make a profit on it.

The fact that no one has done so speaks volumes.

 

[crescent2]

I don't want to own my street and utilities. I don't like to drive my paver, the asphalt store is closed, my reservoir is polluted, and my steam turbine makes too much noise.

 

[juliusaugustus]

As many people have posted every single time this issue comes up, and was referenced previously, Amtrak was formed because the private railroads wanted to stop passenger service altogether. That more-or-less saved existing rail service at the time, but there's NOTHING standing in the way of a private corporation coming in & competing with Amtrak. In 40 years, no one has tried, with the exception of specialties like the American Orient Express / Grandluxe (which went out of business). Anyone who wants to can start a railroad company, manufacture cars, hire non-union staff, and try to make a profit on it.
The fact that no one has done so speaks volumes.

Passenger rail is uprofitable due to government subsidized roads and airports and because of tight regulations. Nothing about the technology requires a subsidy.

 

[D.P. Roberts]

Passenger rail is uprofitable due to government subsidized roads and airports and because of tight regulations. Nothing about the technology requires a subsidy.

See, now you're just contradicting yourself. In one of your previous posts, you said the following:

Why those things be that expensive? Government doesn't drive down costs it drives them up hugely. For example a fare on public transit before government take over was 5-10 cents which translated today would be 89-1.10 dollars and the systems made money on these fares. Now a fare on MTA costs 2.50 where as they loose money.

So, on one hand you said that government drives UP the costs of transportation. Now, you're saying that the subsidies to air & road travel are driving DOWN the costs so that Amtrak can't compete?

Furthermore, you're contradicting yourself in terms of the regulations too.

It could pay for itself if it simply reduced wages and benefits being as they make up 50% of expenses.

So, if Amtrak could be profitable if it just de-unionized, then surely some enterprising person/company out there could buy some train cars, hire low-wage, non-union people, and make a go of it? Again, no one has done so in 40 years, so perhaps there's more to it than simply cutting wages.

Face it: you (and other libertarian types) have this pet theory that everything would go better if we just got rid of the government, and while it may be true in some cases, it's demonstrably false when it comes to passenger rail. Passenger rail is a perfect example of an industry that is completely open to private competitors, yet no private competitors are willing to even TRY to make a go of it. If anyone could start a private rail company that had trains that were better, faster, cheaper, and more on-time than Amtrak, everyone here (myself included) would choose them. But it hasn't happened, and there are no signs that it's going to. Real life just doesn't agree with your theory.

 

[AlanB]

For example a fare on public transit before government take over was 5-10 cents which translated today would be 89-1.10 dollars and the systems made money on these fares. Now a fare on MTA costs 2.50 where as they loose money.

The IRT made a profit on the first line on the nickle fare for two reasons. One, Government footed the bill to build the subway and while the IRT was required to make payments to help offset that cost, the IRT didn't bear the full responsibility for the capital costs. Two, since it was only one line and compared to the other alternatives of the day it was like having a Star Trek transporter compared to Japan's bullet trains, it was mobbed with people every day.

Once additional lines opened, lines also built with public funds, the IRT slowly evolved into a money losing company. The BRT/BMT didn't do much better either. Yes, it didn't help that the city held the fare to a nickle for many years, many years too long. But even if they had been allowed to raise fares, it wouldn't have totally stopped the bleeding.

 

[Nathanael]

Air traffic control isn't the government being in the transportation business. Its the government managing a common resource. Having competing air traffic control systems would be a major safety and practicality issue.

Which is exactly the same reason the government needs to own the railroad tracks, schedule the trains, and operate the dispatching -- it's precisely analogous to ATC, government managing a common resource. Having competing dispatching and signalling (and electrification....) systems IS a major safety and practicality issue.

It's also a major practicality issue to have different, competing ticketing and reservations systems. So that needs to be unified and government-operated too...

At that point, there's really no scope for "private industry" left, apart from subcontracting to operate a specific train for a specific fee. This is what happened in the UK: the "privatization" has ended up being completely government-run, with the private companies as effectively subcontractors.

In the US, we actually have *too much* privatization when it comes to rail.

As for universal toll roads... that was tried. In the early 19th century vast majority of intercity roads in the UK were privately operated toll roads, owned and operated by "turnpike trusts" or other corporations. The result: a terrible road system which decayed. In the end, they had to nationalize the road system, which was done in the late 19th century.

Face it, everyone: transportation is one of the natural responsibilities of government. This has been understood since the Roman Empire, perhaps earlier. Honestly, transportation is one of the reasons governments are *organized*, and has been a government responsibility for longer than police or fire departments, and in some places for longer than the military (which used to be a matter of hastily raised militias)! Perhaps the only government responsibility which predates transportation is judges, as judges are arguably the core responsbility of government. (Though an argument could be made for agriculture, which has always had a strong government involvement.)

 

[haolerider]

Air traffic control isn't the government being in the transportation business. Its the government managing a common resource. Having competing air traffic control systems would be a major safety and practicality issue.

Which is exactly the same reason the government needs to own the railroad tracks, schedule the trains, and operate the dispatching -- it's precisely analogous to ATC, government managing a common resource. Having competing dispatching and signalling (and electrification....) systems IS a major safety and practicality issue.
It's also a major practicality issue to have different, competing ticketing and reservations systems. So that needs to be unified and government-operated too...

At that point, there's really no scope for "private industry" left, apart from subcontracting to operate a specific train for a specific fee. This is what happened in the UK: the "privatization" has ended up being completely government-run, with the private companies as effectively subcontractors.

In the US, we actually have *too much* privatization when it comes to rail.

As for universal toll roads... that was tried. In the early 19th century vast majority of intercity roads in the UK were privately operated toll roads, owned and operated by "turnpike trusts" or other corporations. The result: a terrible road system which decayed. In the end, they had to nationalize the road system, which was done in the late 19th century.

Face it, everyone: transportation is one of the natural responsibilities of government. This has been understood since the Roman Empire, perhaps earlier. Honestly, transportation is one of the reasons governments are *organized*, and has been a government responsibility for longer than police or fire departments, and in some places for longer than the military (which used to be a matter of hastily raised militias)! Perhaps the only government responsibility which predates transportation is judges, as judges are arguably the core responsbility of government. (Though an argument could be made for agriculture, which has always had a strong government involvement.)

I think you would have a difficult time convincing the privately held railroads (NS, CSX, BNSF, UP, ETC) that the government should take over their privately owned tracks, dispatching, etc. Also, there is no competing reservations or ticketing system as far as Amtrak is concerned. Your theory/suggestion just does not make any sense!

 

[NW cannonball]

The "privately held railroads" got their right-of-way, their privileged status for "taking" by eminent domain - and their land grants - because a hundred and fifty years ago give or take -- a deal went down.

None of the "privately held railroads" could even exist without the enormous taxpayer subsidies over the last 150 years.

If the 'privately held' railroads had to pay for the land, the property rights, the pollution costs, they would not exist.

The status now -- yeah the 'privately held' railroads only exist because they have residual rights -- it seems to work ok.

The 'privately held' railroads have tried to skip out of their side of the conditions of the original contract - that's why Amtrak exists.

Privately held - but taxpayer funded for 150 years.

 

[Nathanael]

You'll also notice that the "privately held" railroads are slowly but surely turning into a single nationwide monopoly, held back only by antitrust law. Eventually someone's gonna take a look at it the way they took a look at AT&T. The telecoms are merging back into a nationwide monopoly too, of course...

These sorts of natural monopolies need strict government control.

 

[juliusaugustus]

The "privately held railroads" got their right-of-way, their privileged status for "taking" by eminent domain - and their land grants - because a hundred and fifty years ago give or take -- a deal went down.None of the "privately held railroads" could even exist without the enormous taxpayer subsidies over the last 150 years.

If the 'privately held' railroads had to pay for the land, the property rights, the pollution costs, they would not exist.

The status now -- yeah the 'privately held' railroads only exist because they have residual rights -- it seems to work ok.

The 'privately held' railroads have tried to skip out of their side of the conditions of the original contract - that's why Amtrak exists.

Privately held - but taxpayer funded for 150 years.

Complete nonsense. Eminent domain was rarely used if at all. Most railroad were built in areas where people didn't live. The land grants were paid off by building the railroads, by paying large taxes, and by running postal service and army service for below market rates. The land grants were for transcontinental lines Pollution costs seriously?

 

[juliusaugustus]

Air traffic control isn't the government being in the transportation business. Its the government managing a common resource. Having competing air traffic control systems would be a major safety and practicality issue.

Which is exactly the same reason the government needs to own the railroad tracks, schedule the trains, and operate the dispatching -- it's precisely analogous to ATC, government managing a common resource. Having competing dispatching and signalling (and electrification....) systems IS a major safety and practicality issue.

It's also a major practicality issue to have different, competing ticketing and reservations systems. So that needs to be unified and government-operated too...

Completely dumb idea separating infrastructure and operations has failed every time its tried. Why should things be standardized?

 

[railiner]

The "privately held railroads" got their right-of-way, their privileged status for "taking" by eminent domain - and their land grants - because a hundred and fifty years ago give or take -- a deal went down.None of the "privately held railroads" could even exist without the enormous taxpayer subsidies over the last 150 years.

If the 'privately held' railroads had to pay for the land, the property rights, the pollution costs, they would not exist.

The status now -- yeah the 'privately held' railroads only exist because they have residual rights -- it seems to work ok.

The 'privately held' railroads have tried to skip out of their side of the conditions of the original contract - that's why Amtrak exists.

Privately held - but taxpayer funded for 150 years.

Complete nonsense. Eminent domain was rarely used if at all. Most railroad were built in areas where people didn't live. The land grants were paid off by building the railroads, by paying large taxes, and by running postal service and army service for below market rates. The land grants were for transcontinental lines Pollution costs seriously?

I have to agree with this....the government made out very well with the railroads that were 'land-grant' railways...the government retained alternate sections of the granted land, whose value skyrocketed when the railway was built from private capital. And of course railways have paid much higher taxes for their properties thru the years than other land owners.

 

[NW cannonball]

The "privately held railroads" got their right-of-way, their privileged status for "taking" by eminent domain - and their land grants - because a hundred and fifty years ago give or take -- a deal went down.None of the "privately held railroads" could even exist without the enormous taxpayer subsidies over the last 150 years.

If the 'privately held' railroads had to pay for the land, the property rights, the pollution costs, they would not exist.

The status now -- yeah the 'privately held' railroads only exist because they have residual rights -- it seems to work ok.

The 'privately held' railroads have tried to skip out of their side of the conditions of the original contract - that's why Amtrak exists.

Privately held - but taxpayer funded for 150 years.

Complete nonsense. Eminent domain was rarely used if at all. Most railroad were built in areas where people didn't live. The land grants were paid off by building the railroads, by paying large taxes, and by running postal service and army service for below market rates. The land grants were for transcontinental lines Pollution costs seriously?

I have to agree with this....the government made out very well with the railroads that were 'land-grant' railways...the government retained alternate sections of the granted land, whose value skyrocketed when the railway was built from private capital. And of course railways have paid much higher taxes for their properties thru the years than other land owners.

Not so sure about the tax rates.

Consensus is that everybody got a good deal on the 1860's western railroad subsidy. (Except for the native landowners)

Land values went up enormously near the railroads. Recently the land-holding subsidiaries of the former "western railroads" have been "spun off" as have the mineral rights subsidiaries. Oh, and the timber subsidiaries, like Plum Creek.

Not to mention SPRINT.

How much value went to whom is an academic question. Never to be evaluated here. It would take a few thousand economists to evaluate. And they would be wrong.

One of the most influential deals of the Lincoln administration.

But real hard to evaluate.

 

[NW cannonball]

The "privately held railroads" got their right-of-way, their privileged status for "taking" by eminent domain - and their land grants - because a hundred and fifty years ago give or take -- a deal went down.None of the "privately held railroads" could even exist without the enormous taxpayer subsidies over the last 150 years.

If the 'privately held' railroads had to pay for the land, the property rights, the pollution costs, they would not exist.

The status now -- yeah the 'privately held' railroads only exist because they have residual rights -- it seems to work ok.

The 'privately held' railroads have tried to skip out of their side of the conditions of the original contract - that's why Amtrak exists.

Privately held - but taxpayer funded for 150 years.

Complete nonsense. Eminent domain was rarely used if at all. Most railroad were built in areas where people didn't live. The land grants were paid off by building the railroads, by paying large taxes, and by running postal service and army service for below market rates. The land grants were for transcontinental lines Pollution costs seriously?

I think you might check your facts before posting again.

 

[juliusaugustus]

On the issue of land grants

https://www.aar.org/keyissues/Documents/Background-Papers/Railroad-Land-Grants.pdf

 

[AlanB]

The "privately held railroads" got their right-of-way, their privileged status for "taking" by eminent domain - and their land grants - because a hundred and fifty years ago give or take -- a deal went down.

None of the "privately held railroads" could even exist without the enormous taxpayer subsidies over the last 150 years.

If the 'privately held' railroads had to pay for the land, the property rights, the pollution costs, they would not exist.

The status now -- yeah the 'privately held' railroads only exist because they have residual rights -- it seems to work ok.

The 'privately held' railroads have tried to skip out of their side of the conditions of the original contract - that's why Amtrak exists.

Privately held - but taxpayer funded for 150 years.

Complete nonsense. Eminent domain was rarely used if at all. Most railroad were built in areas where people didn't live. The land grants were paid off by building the railroads, by paying large taxes, and by running postal service and army service for below market rates. The land grants were for transcontinental lines Pollution costs seriously?

I think you might check your facts before posting again.

The Federal Government marked all debt incurred through land grants to the RR's paid in full after WW II because of the RR's help during the two World Wars in moving troops & supplies.