Nationalize the railroads? A "what if."

On December 26, 1917, President Woodrow Wilson issued a presidential order that effectively seized the railroads for the U.S. government. Several factors, both governmental and economic, had conspired over the previous decade to result in an inefficient system suffering from labor unrest, poor scheduling, car shortages, and outright inability of the railroads to respond to wartime requirements. On or before December 28, the Treasury Department took possession of the railroads, and their operation was placed into the hands of the United States Railroad Administration.

It wasn’t a permanent thing. The railroads were returned to private hands in 1920, after the conclusion of hostilities. Among the few good things accomplished by the USRA were the stabilization of services commensurate with the needs of the war effort and the standardization of design of literally hundreds of locomotives and freight cars. The latter achieved economy of scale, allowing any car or locomotive to be built to the USRA specs, with few modifications, at any capable facility, including railroad shops as opposed to builders. The designs were so well received by the railroads that many continued to be used well beyond the period of government ownership.

So I thought, what would government ownership, or “nationalization,” be like today? Let’s leave speculation about what might prompt such an event for another day; but let’s assume that the objectives of such a takeover might be the same as they were in 1917, namely service improvement and disruption avoidance.

Amtrak, already a quasi-governmental entity arguably dependent on the federal government and many state subsidies for its solvency. If Amtrak is a face-value demonstration of what can be done towards the stated goals, then the failure of any government takeover is virtually assured. On the other hand, if the feds “took” Amtrak, they would be taking it from the National Railroad Passenger Corporation, the actual entity created by the feds to run Amtrak. The only thing this would accomplish might be to completely flush out current board members and create a new hierarchy. I have often thought that the current ten board members is several too many, and an Amtrak board consisting solely of the Secretary of Transportation, a presidentially appointed Amtrak president, and one member each chosen by Congress and the railroads for a total of four would be more workable.

On the other hand, if the feds took over the freight railroads, that would be four board members chosen by government. Better efficiency might be had if only one person ran the whole operation. I’d have to ask whether there is any one person with enough experience to head both freight and passenger railroads today.

It’s hard to see what could be gained by a nationalization of the freight railroads. They already benefit, or suffer, from a certain degree of standardization that didn’t exist at the beginning of the last century. Once possible objective could be to achieve what is seen by many railroad shippers as the holy grail of railroad utility: Open access. On the negative side of this, open access would mean that the freight rail network was just one large railroad. With nationalization, I could see the feds also re-establishing universal standardized rates, which would benefit some shippers with lower rates in the short term, but which would have to rise as the old regime of tariffs re-established itself and the feds had to figure out a way to feed the beast.

It's fun to speculate. But, in general, I see no real reason that rail transportation would benefit from nationalization at this, the beginning of 2017.

However—and here’s something to think about—what if the feds started a program to establish national High Speed Rail in the manner of the establishment of the Interstate Highway System. As I’ve noted in the past, HSR doesn’t have to be just passenger. Freight could benefit from such a system, maybe even more so than passengers; and both would take heavy burdens off our other modes, keeping the stress, cost, and risk spread over all of them. (Visit www.steelinterstate.org , to get a look at what’s being proposed.)

Wishing all my readers the best in the coming year.

©2017 – C. A. Turek – mistertrains@gmail.com

(Charles A. Turek is a writer and novelist based in Albuquerque, NM. After four decades working in areas of the insurance industry related to transportation, he now writes on all aspects of American railroading. Charles is a political conservative but believes in public funding of passenger rail as a part of the federal government’s constitutionally conservative obligation to provide for defense and public infrastructure so that private enterprise may flourish.)