Politics, profits and the public interest: Government, railroads, and interest groups, 1827--1976

This dissertation examines the political and economic relationship between the United States railroad industry and federal and state governments during the nineteenth and twentieth centuries. The examination concludes with a detailed discussion of the financial and operational collapse of the northeastern rail system, particularly the giant Penn Central Transportation Company, during the late 1960's and early 1970's. In the one hundred-thirty years prior to the northeastern rail crisis of the 1960's (1830–1960), the railroads and government entities developed a complex political and economic relationship as numerous interest groups, including the railroads themselves, flexed their political and economic muscle to influence the politics of railroad construction, regulation, and operation.; As the railroads lost market share to more efficient competitors after World War II, they became vulnerable to attacks from interest groups upset with the railroads' plans to restructure services and abandon lines. After 1945, individual interest groups used their political and economic power to protect their stake in the faltering railroad industry. The collective financial burden of their demands imposed a crushing burden on already weakened northeastern carriers. During the 1960's, a series of private sector mergers failed to rescue the beleaguered lines, and the northeastern rail system descended into a series of bankruptcies climaxed by the failure of the Penn Central during June 1970.; The debate over the solution to the northeastern rail crisis featured many of the same interest groups who previously used their political leverage to burden the railroads with unprofitable services, unnecessary employees, and excess physical plant. From 1970 to 1976, they maneuvered to protect their interest in any government sponsored solution. After much debate, the federal government assumed operation of most of the bankrupt northeastern carriers, but not before paying enormous sums of money to appease political opponents who opposed any changes in the status quo that resulted in a decrease in their political influence or loss of their financial investment. The following work examines the federal solution to the northeastern rail crisis within the context of the evolving interaction between the railroad industry and government between 1827 and 1976.