The U.S. railroads are practically the same age as the creation of the first locomotive – they turn 190 years old this year.
During the railroads’ “golden age,” from 1865 to the early 20th century, when they had virtually no competitors, the infrastructure grew at an astounding rate.
During those years, the U.S. railroad network grew from 35,000 miles to a peak of 254,000 miles in 1916. Never before has any other country had such a grand network of railroads.
The U.S. railroads have been privately owned for virtually their entire history, except during World War I, when they were brought under the full control of the federal government.
After that, the companies were returned to their owners. This does not mean, however, that they were not controlled by the government.
Beginning in 1910, the legislation was amended to give the Interstate Commerce Commission (ICC) the right to suspend tariffs if it believed the railroad was abusing its monopoly power.
Railroad companies were obliged to coordinate their price lists, as well as their transportation routes.
On the other hand, strong influence had trade unions, under the pressure of which back in 1916 the railway workers received an 8-hour working day instead of the 10-hour and a guarantee of overtime pay in half.
As long as there was not much competition in the freight market, none of this had much effect on the railroads. Although it did result in insufficient investment in upgrades.
The situation was exacerbated by growing competition from road transport, which was linked to the U.S. highway construction boom.
The story of the gradual decline of the railroads is vividly described in a novel by the American author Ayn Rand, Atlas Shrugged, which was published in 1957 but is still very popular today.
In it, in particular, a train crashes because of the condition of the track, which had not been renewed in 100 years.
In fact, the situation was not that bad until the 1970s. In 1951, the railroads set a record for freight and passenger traffic.
They moved 40.5 million loaded cars and 483 million passengers on the network out of 223,000 miles. They operated 2 million freight cars and 42,000 passenger cars and 40,000 locomotives.
However, this did not save from gradually increasing competition. On the one hand, the market was conquered by trucks, the operation of which cost much less due to the lack of own investments in infrastructure by carriers.
Huge investments from the state budget were made to build and repair roads. As a result the share of cars on the US transportation market grew from 10 to 20% in the 1940-1950s.
On the other hand, internal water transport, the most economical according to fuel consumption, was developing. Aviation was becoming more and more important in passenger traffic.