My research into both the history of railroad development and the
current status of railroads in the United States suggests that
railroads originated primarily to facilitate transportation of goods
and people within the United States rather than to promote exports.
Passenger traffic played an enormous role in the development of
railroads in the United States. Although the desire to construct the
transcontinental railroad at the time was partially based on hopes for
trade with the Orient, the reality is that 95% of the traffic
originated locally. In addition, "The building of the
[transcontinental] railroad was motivated in part to bind the Union
together during the strife of the American Civil War." "First
Transcontinental Railroad" Wikipedia (January 14, 2006)
http://en.wikipedia.org/wiki/First_Transcontinental_Railroad.
Although the decline in passenger traffic because of the automobile
and airplanes hurt railroads dramatically, a significant reason for
their dramatic decline in freight transport was crippling regulation
and government subsidization of trucking through highway construction.
Furthermore, several recent articles in BusinessWeek indicate that
railroads are benefiting from imports, particularly those from China.
Increased demand for coal transportation in the country as a result of
high oil and natural gas prices is also driving demand for railroads.
Furthermore, grain, which is a significant export of United States, is
primarily transported by rail.
Sincerely,
Wonko
Search terms: Railroad; decline of railroads; origin of railroads
England; origin of railroads;
Sources:
"With the industrial revolution there came invention, in almost every
line of human endeavor, to expedite production, this in itself
demanded improved methods of transportation that the increased
production might be properly handled. Let us pause and consider what
other countries were doing regarding this problem, that we may have a
background to judge this nation's efforts in 1826.
The railroads, which were so inevitable, had their origin in crudities
that formed themselves at Newcastle, on the river Tyne, England, for
here wagon-ways existed as early as the middle of the sixteenth
century, to facilitate handling coal from the pits to the river bank.
A little imagination will show the evolution of the highway, which
resulted in the railway. Heavy carts loaded with coal continually
passed between the mines and the river, and in the process of time
ruts were worn which in periods of rainy weather made the roads nearly
impassable. The solution was quite simple - strips or rails of wood
were placed in these ruts to prevent further wear on the road's
surface. As new roads were built, the rails were placed directly on
the surface, and as it was found difficult to keep the wagon wheels on
the planks, side pieces or flanges were added."
"In 1829, William Jackson, who was probably the original advocate of
government ownership of railroads in this country, delivered an
address before the Massachusetts Charitable Mechanic Association in
favor of the State issuing bonds to build and own a railroad between
Boston and Albany. He cited the success of the Granite Railway and
said in his opinion nothing could so effectually develop commerce and
communication between heretofore separate and remote districts. Many
other men were quick to recognize the advantages of a railroad, and it
was not long before the fame of the first railroad in America had
spread throughout the country."
""It would be taking much too narrow a view of the advantages of a
Rail Road, to consider only the accommodation which it would afford to
the present amount of business. It needs no argument to show that many
articles of the produce of the country would be transported upon it
which are not now carried to market, because the cost of
transportation exceeds their saleable value, when at market." They
argued, and rightly, the advantages of trade to be derived from the
free exchange of the productions of the inland parts of the State for
those of the sea and foreign countries, and that "the quan- tity of
goods exchanged would be augmented in some measure in proportion to
the diminished cost of trans- portation." A thorough investigation of
trade conditions was made by the Board, and some of the statistics are
most interesting in the light of today. It was computed that one
hundred and twenty thousand cords of firewood were consumed annually
in Boston, Cambridge, and Charles- town, of which amount 100,000 cords
were brought by sea navigation, 9,000 cords by the Middlesex Canal,
and the remainder by wagon from neighboring towns. A rail- road would
make accessible the vast reserves in the western part of the State.
It would also, the Directors thought, greatly stimulate trade in towns
such as West Springfield, which annually sent 36,000 bushels of rye to
Springfield but to no distant market because of great expense involved
in the existing mode of transportation, in the towns sur- rounding
Boston, as the latter town then secured a great quantity of its hay by
the water route from Maine; and in a town in the extreme western part
of the State which raised fine potatoes, but for the same reason could
find no distant market because of transportation expenses being more
than importation from Europe."
"A History of the Origin and Development of the Granite Railway at
Quincy, Massachusetts" The Granite Railway Co. (1926)
http://ci.quincy.ma.us/tcpl/legacy/railway/firstrr1.htm
"This was the first result of the labours of Asa Whitney, a New York
merchant, who had become an enthusiast on the subject of a Pacific
railroad. Between 1830 and 1835, while in China, Mr. Whitney read of
the wonderful experiments in railroad building in England, and began
at once to reflect upon the enormous changes the new invention made
possible. It would be an easy matter to cross the American continent
and connect Europe with the Orient by way of the Pacific. As the dream
grew upon him, he began to gather statistics concerning the trade of
China, Japan, and India. He seems to have devoted months, if not
years, to this work, coming to America full of figures and faith in
his great scheme."
"With the lessons learned from the years that followed the agitation
of the question by Mr. Whitney and others we are able to see now what
bitter disappointment was in store for the enthusiast who pinned his
faith to the traffic of the Orient. We know now that the revenue
derived from the Asiatic trade-in fact, from all through
business-would not do much more than supply the tallow required to
cool the pins that were heated by the sands of the desert through
which the road was to run. Veritable dreamers were the early friends
of the Pacific Railroad. Themselves farther from the pay streak than
the Atlantic was from the Pacific, they were ever scolding Congress
for its tardiness, and capital for its timidity.
During all the preliminary work the great aim of the road was to reach
India, China, and Japan.
Benton, Clark, and others in Congress were ever pointing to the East
by way of the West, and crying in the drowsy ears of the nodding
Speaker that " yonder lay the road to the Orient." It was not until
the discoveries of gold in California that Congressman Sargent, of
that State, began to hint guardedly that the West itself was worth
going after. To be sure, nobody took him seriously. He was merely
tooting his own horn, men said, and they continued to talk Asia, to
talk against the scheme, or not to talk at all. Nobody dreamed of the
possibilities of the wild West. No prophet attempted to foretell the
story of the vast empire that would awaken with the first magnetic
touch of the steel-shod feet of the iron horse."
"Reaching across the great American desert for the trade of the
Orient, the dreamers never dreamed that these vast reaches of land,
then considered uninhabitable, would soon be occupied by a rapidly
increasing population, and that, when the road was built, ninety-five
cents of every dollar earned would come from local, and only five
cents from through traffic."
"The Story of the Railroad" by Cy Warman, D. Appleton & Co. (1898)
http://cprr.org/Museum/Warman1.html
"In the United States a turnpike era and then a canal era had
immediately preceded the coming of the railroads, which proved to be
fast, direct, and reliable in all weather. After 1830 the railroads
grew so quickly that within a decade their mileage surpassed that of
the canals."
"After 1920 the railroads failed to recapture their former prosperity
largely because of added competition from the automobile, the bus,
long-distance trucking, and the airplane."
"The industry's financial difficulties peaked with the bankruptcy of
the Penn Central RR in 1970, but since then railroads have staged a
modest revival. The Railroads Revitalization and Regulatory Reform Act
(1976) and the Staggers Act (1980) deregulated the industry by making
it easier for railroads to set their own rates, abandon unprofitable
lines, and buy other railroads, thus creating economies of scale.
Under deregulation, railroads could offer rate discounts to get more
customers. Moreover, variable gasoline prices and technological change
made the industry more competitive with trucking. Containers that
adapt to truck, ship, or train travel, multilevel automobile-rack
train cars, computerized tracking systems, and piggyback carriers that
allow trains to carry fully loaded trucks also aided the modernization
of freight service.
The amount of freight moved by railroads increased by 34% between 1970
and 1992, and rail's share of the freight industry, relative to
trucking and other forms of transport, remained stable through the
1990s, reversing decades of decline."
"American Railroads" The Columbia Electronic Encyclopedia, 6th ed.,
Columbia University Press (2005)
http://www.infoplease.com/ce6/sci/A0860627.html
"In the 1830s many lines had more passenger revenue than freight, but
the next decade saw freight traffic dominate."
"Between 1940 and 1965 the rail share of intercity commercial
passenger traffic had fallen from 64 percent to 17 percent, and that
of freight from 61 percent to 44 percent. In the sixties, seventies,
and eighties the use of welded rail, microwave communication,
computers, mechanized track maintenance equipment, unit trains, and
greater piggyback and container service slowed the decline somewhat,
but by 1987 railroads provided only 36 percent of intercity freight
traffic and 3 percent of passenger service."
"The Staggers Rail Act of 1980 liberalized much of the federal
railroad regulation and helped provide a rate of return of 5.5 percent
in the mid-1980s, well above the 2 to 3 percent of earlier years. Even
with the major reduction both in work force and total mileage American
rail freight ton-mileage in the late 1980s was a third larger than
that of World War II."
"Railroads" by John F. Stover, Houghton Mifflin
http://college.hmco.com/history/readerscomp/rcah/html/rc_073400_railroads.htm
"By the 1950's though, the railroads, worn out by years of carrying
war goods, were cutting back. Overseas, the Federal government
(through the Marshall Plan) rebuilt the railroads of our former
enemies. At home, the Federal government began massive subsidies to
the automobile and airline industries in the form of highway and
airport construction funds, but provided nothing for those unsung
heroes of World War II, the railroads. Against this prosperity and
apparent "free" transportation, the passenger trains began their
decline."
"Harvey Houses" TrainWeb (October 29, 2001) http://www.harveyhouses.net/fredco.html
An excellent discussion of how government regulations adversely
affected railroads by forcing them to continue unprofitable passenger
service and limiting their ability to compete for freight service
while simultaneously subsidizing airports and highways can be found at
"Decline & Revitalization: 1945-1995" National Railroad Museum (2006)
http://www.nationalrrmuseum.org/collections-exhibits/outline/decline-revitalization.php.
The source also describes how recent innovations in intermodal
transport are allowing railroads to benefit from the growth in
container trade with foreign countries.
"KING COAL. And shipping by train is roughly 10% to 25% cheaper than
by truck, says Jason Seidl, a transportation analyst with Avondale
Partners in Philadelphia. That's important, given the growing trend
toward "intermodal" shipping -- using a combination of transportation
means, such as trains, trucks, and boats, to maximize efficiencies.
What's more, an unusually harsh winter has driven up demand for coal
-- a key commodity that railroads transport. Indeed, rail shipments of
coal rose 2.3% in January over the same month last year, to 542,989
carloads, according to Lawrence Kaufman, a Denver-based industry
consultant and former exec at Burlington Northern (BN)."
"BN is especially poised to benefit from the intermodal trend. Its
intermodal shipments of containers and trailers rose 5.7% in January,
second only to Norfolk Southern's (NS) 6.6% increase, says Kaufman."
"For the foreseeable future, coal will be in demand as a source of
energy and "the most efficient way of moving coal is by rail," he
says. And with road congestion in the U.S. a growing problem, shippers
may increasingly turn to the railroads to move goods -- at least part
of the way. "The railroads own rights of way in major urban areas you
can't replace," Cousins adds."
"Railroad Stocks: Ready to Roll?" By Eric Wahlgren, BusinessWeek
(February 11, 2004) http://www.businessweek.com/bwdaily/dnflash/feb2004/nf20040211_3022_db014.htm?campaign_id=search
"As the railroad industry's largest traffic source, coal accounts for
about 40% of tonnage and 20% of revenues. Through July 24, 2004, U.S.
Class 1 coal carloadings rose 3%, as power producers reacted to
increasing electricity demand. We believe that below-average coal
inventory levels, combined with economic growth and high prices for
coal substitutes oil and natural gas, will drive increasing coal
demand and shipping volumes in 2004."
"Transporters Get a Pick Me Up" by Andrew West, BusinessWeek (August
30, 2004) http://www.businessweek.com/investor/content/aug2004/pi20040830_4078_pi041.htm?campaign_id=search
"As Don Hodges explains it, railroads are particularly attractive
partly because high fuel costs are affecting other modes of transport
more severely and because many goods arrive from China on the West
Coast and then continue by rail."
"Don: Our favorite transportation stock is Burlington Northern Santa
Fe. The railroad industry is beginning to experience some of the best
business they've seen in 25 years or more. The public isn't aware yet
of how well the railroads are beginning to do. There's a shortage of
trucks and truck drivers -- high fuel costs are sending some people to
railroads, and a lot of the merchandise coming out of China is being
distributed on rail."
"Riding the Railroad Boom" BusinessWeek (November 24, 2004)
http://www.businessweek.com/bwdaily/dnflash/nov2004/nf20041124_6271_db006.htm?campaign_id=search
"Total car-loadings rose 2.9% last year and were up 1.9% through Feb.
12. Intermodal -- the movement of highway trailers and marine
containers by rail -- volume set a record in 2004, rising 10.4%, to 11
million trailers or containers, and rose 8.5% year to date through
Feb. 12. "
"The longer-term outlook for railroads is favorable, in S&P's opinion,
though West expects moderating revenue and profit growth in 2005 and
2006. He believes the industry's core traffic base (coal, grain,
chemicals, and intermodal) will increase in line with the economy. In
addition, he sees room for railroads to expand margins and operating
efficiency by eliminating wasteful labor practices, improving service
levels, and using enhanced information systems to aid capital
budgeting decisions. As a result of 2001 guidelines by the Surface
Transportation Board, West deems future rail mergers less likely."
"Railroads: Freight and See" by Sam Stovall, BusinessWeek (March 16,
2005) http://www.businessweek.com/investor/content/mar2005/pi20050315_2224_pi039.htm?campaign_id=search
"We have made market share gains over the past five years. Most of
that, we think, is the result of our service, which has become more
competitive and more consistent. If you're asking for shipment from
Toronto to Baton Rouge, for example, we'll quote it at 103 hours, not
six to seven days. And we consistently are on time 92% to 93% of the
time.
That change of service has given us the ability to capture share that
we had previously lost to the highway.
I had thought that over the years trucking was eroding rail's market
share. So rail is starting to take that back?
I think there's a turnaround. Particularly at Canadian National, that
has been the case over the past five to six years. We move a lot of
bulk goods like grain and coal. But we're different from most rails,
where most of what they carry is bulk. Eighty percent of our business
is nonbulk, such as lumber, consumer goods, steel products, and
chemicals, and trucks certainly are competitive for most of that
business."
"Canadian National: The Making Of A Track Star" BusinessWeek (October
17, 2005) http://www.businessweek.com/@@E9LtPIQQUOhhDg0A/magazine/content/05_42/b3955018.htm |
