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Railroad History - Why They Built the Railroads

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The primary objectives of business is to enhance the wealth of the shareholders. To achieve this objective the business must offer goods and services that people will pay for in an arms length transaction. Equally important, management must meet the reasonable expectations of its key stakeholders, i.e. customers, employees, regulators, creditors, shareholders, etc.  If it fails to achieve any of these objectives, the business will fail in the long run.  Witness the large business graveyard that dots the business history landscape. Because of their nature some businesses have received special support from government. Electric utilities are a case in point. The government recognized that competitive poles and wires were not practicable, so in most jurisdictions electric utilities were granted regulated monopoly status.  However, they were expected to pay their way.  That is to say, the users were expected to pay for the cost of the service.  All of it! To the best of my knowledge all of the major transportation infrastructure projects in the United States, with the possible exception of some pipelines, received government support to flesh out the project, although not all of it was from the federal government. Clearly, the railroads, especially the so-called transcontinental roads, received substantial government assistance. But the users were expected to reimburse the government, i.e pay for the infrastructure through the rates charged by the carriers, which for the most part they have done. The challenge for passenger rail, especially so-called high speed rail, is the paucity of evidence that the users will pay for it. Thus, the taxpayers will be saddled with an on-going liability.
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