Staggers Act
Probably the primary national legacy of the administration of president Jimmeh Kah-duh, is the Staggers Act of 1980, deregulating the railroad industry.
My October 2010 issue of Trains Magazine has a large article detailing the significance of the Staggers Act.
To understand things one has to realize railroading was a major technological leap forward. It made possible the Industrial Revolution, whereby massive quantities of materials could be cheaply shipped to large, centralized production sites, and then the product cheaply shipped.
Produce from the midwest could be shipped to eastern population centers.
Railroading was a cash cow, and attracted unscrupulous promoters.
Everyone wanted a piece of the action. Merchants in tiny burgs were taken advantage of to get a railroad in.
The worst example may be the New York, Ontario & Western, which never actually attained New York, and built a horrible railroad through the Catskills.
It climbed at least three steep hills to connect all the towns it went through.
Its promotors would sell bonds of the NYO&W to merchants in those towns.
NYO&W is of course gone; it abandoned in 1957. It only lasted as long as it did, because it built a branch to Scranton, PA; an outlet for anthracite coal (to New York City).
Before railroading it was pack-horse and wagon, although canals had advanced that.
But canals couldn’t operate in winter.
With railroading came cut-throat competition; charge high to ship in a market where it was the only railroad, and low to steal from competing railroads.
Things were so outta control and confiscatory the Federal Gumint stepped in, instating the Interstate Commerce Commission to regulate the railroad industry.
That was in 1887, a good idea at first, but as time advanced into the 1960s, and competing modes of transport had arisen, the Interstate Commerce Commission was holding back the industry.
Deregulation of the railroad industry was precipitated by the collapse of Penn-Central, a merger of the Pennsylvania Railroad and arch-rival New York Central. Both had lines in the midwest that competed, and were unproductive.
Total collapse of eastern railroading was looming, so Conrail was formed, at first a gumint enterprise.
It looked like eastern railroading would be a financial sinkhole, that Conrail would forever need subsidy.
The Staggers Act is a compromise, full of arcana I don’t understand.
It wasn’t complete deregulation as proposed by Carter, but it significantly defanged the Interstate Commerce Commission.
It essentially fulfilled the Railroad Revitalization and Regulatory Reform Act of 1976 (the 4R Act), which set the stage for deregulation, but didn’t work.
When my car needs gas, I patronize either of three gas-stations; their per-gallon price is often lowest. I avoid two other gas-stations, because their per-gallon price is higher.
This is called competition, chillen.
What the Staggers Act was allowing.
Railroads could set contract rates for rail-transportation with a shipper.
Without approval by the Interstate Commerce Commission.
Railroads could more quickly present a rate proposal, without the ICC slowing things.
Same thing with abandonments. Railroads were no longer the only commerce for small towns. There was trucking over highways, which wasn’t there when those railroads were built.
A railroad could abandon such branches, and better concentrate on their main stems, which were excellent at moving massive volumes of traffic.
Previously the ICC stood in the way of such abandonments, or selling off such lines to an alternative short-line operator.
People expected railroad rates to rise with the inflation at that time.
But they didn’t. They fell instead.
The railroads were competing for traffic.
Such competition would have made Penn-Central (and eastern railroading) competitive at that time, but the Interstate Commerce Commission was still in the way.
So now the railroad industry is extraordinarily successful.
Even in a time of deep recession.
It makes one wonder if price-competition is what our economy needs, an end to regulation.
The Staggers Act essentially reinstated the mighty Pennsylvania Railroad, which is suffering from the rationalization in the ‘60s.
Although now the operator is Norfolk Southern Railroad.
Pennsy was reduced to a two-track railroad, which is becoming a bottleneck.
My October 2010 issue of Trains Magazine has a large article detailing the significance of the Staggers Act.
To understand things one has to realize railroading was a major technological leap forward. It made possible the Industrial Revolution, whereby massive quantities of materials could be cheaply shipped to large, centralized production sites, and then the product cheaply shipped.
Produce from the midwest could be shipped to eastern population centers.
Railroading was a cash cow, and attracted unscrupulous promoters.
Everyone wanted a piece of the action. Merchants in tiny burgs were taken advantage of to get a railroad in.
The worst example may be the New York, Ontario & Western, which never actually attained New York, and built a horrible railroad through the Catskills.
It climbed at least three steep hills to connect all the towns it went through.
Its promotors would sell bonds of the NYO&W to merchants in those towns.
NYO&W is of course gone; it abandoned in 1957. It only lasted as long as it did, because it built a branch to Scranton, PA; an outlet for anthracite coal (to New York City).
Before railroading it was pack-horse and wagon, although canals had advanced that.
But canals couldn’t operate in winter.
With railroading came cut-throat competition; charge high to ship in a market where it was the only railroad, and low to steal from competing railroads.
Things were so outta control and confiscatory the Federal Gumint stepped in, instating the Interstate Commerce Commission to regulate the railroad industry.
That was in 1887, a good idea at first, but as time advanced into the 1960s, and competing modes of transport had arisen, the Interstate Commerce Commission was holding back the industry.
Deregulation of the railroad industry was precipitated by the collapse of Penn-Central, a merger of the Pennsylvania Railroad and arch-rival New York Central. Both had lines in the midwest that competed, and were unproductive.
Total collapse of eastern railroading was looming, so Conrail was formed, at first a gumint enterprise.
It looked like eastern railroading would be a financial sinkhole, that Conrail would forever need subsidy.
The Staggers Act is a compromise, full of arcana I don’t understand.
It wasn’t complete deregulation as proposed by Carter, but it significantly defanged the Interstate Commerce Commission.
It essentially fulfilled the Railroad Revitalization and Regulatory Reform Act of 1976 (the 4R Act), which set the stage for deregulation, but didn’t work.
When my car needs gas, I patronize either of three gas-stations; their per-gallon price is often lowest. I avoid two other gas-stations, because their per-gallon price is higher.
This is called competition, chillen.
What the Staggers Act was allowing.
Railroads could set contract rates for rail-transportation with a shipper.
Without approval by the Interstate Commerce Commission.
Railroads could more quickly present a rate proposal, without the ICC slowing things.
Same thing with abandonments. Railroads were no longer the only commerce for small towns. There was trucking over highways, which wasn’t there when those railroads were built.
A railroad could abandon such branches, and better concentrate on their main stems, which were excellent at moving massive volumes of traffic.
Previously the ICC stood in the way of such abandonments, or selling off such lines to an alternative short-line operator.
People expected railroad rates to rise with the inflation at that time.
But they didn’t. They fell instead.
The railroads were competing for traffic.
Such competition would have made Penn-Central (and eastern railroading) competitive at that time, but the Interstate Commerce Commission was still in the way.
So now the railroad industry is extraordinarily successful.
Even in a time of deep recession.
It makes one wonder if price-competition is what our economy needs, an end to regulation.
The Staggers Act essentially reinstated the mighty Pennsylvania Railroad, which is suffering from the rationalization in the ‘60s.
Although now the operator is Norfolk Southern Railroad.
Pennsy was reduced to a two-track railroad, which is becoming a bottleneck.
Labels: trains
posted by BobbaLew at 1:45 PM
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