Login
or
Register
Home
»
Trains Magazine
»
Forums
»
General Discussion
»
Could have the SP survived without UP
Edit post
Edit your reply below.
Post Body
Enter your post below.
[quote]QUOTE: <i>Originally posted by M.W. Hemphill</i> <br /><br />Paul: Dead on. As to your second paragraph, that was the plan, all right: to apportion the weak roads among the strong roads. The map would then consist of balanced systems, each which had equal strength and weakness. The advantages touted for this were: <br /> <br />1. It would end the diseconomies inherent in the struggle for strategic advantage. <br />2. It would allow the ICC to set master rates that recognized inflationary pressures or productivity improvements that were fair to all. <br />3. It would allow the ICC to prescribe cross-subsidy of rail service without destroying carriers, thus avoiding the concentration of capital and preserving the desired outcome of rates based on mileage, not on volume (which is then termed a classic subsidy to small business, an unconstitutional restriction of the rights of property, a leveling of the playing field, a limit on the inherent rapaciousness of capitalism, or an inducement to economic activity, depending which personal social philosophy you subscribe to). <br />4. If it all worked out, all the ICC would have to do is look at the consolidated profit & loss statement for the industry, decide what a "fair return" should be, and set rates accordingly. Capital would get its return, shippers would all be satisfied that none was being cheated, and the country would have universal rail service. <br /> <br />In short, the ICC was attempting to level out geography. Noble, if utopian, and fatally flawed by its failure to include coastwise shipping, river and lake shipping, and trucking. <br /> <br />There were several formulas devised for this. The ICC engaged railroad economist William Z. Ripley to prepare one in 1921 (a provision of the Transporation Act of 1920, as you note). This plan was specifically repealed by the Transportation Act of 1940. Another was the Prince Plan, widely studied in the early 1930s, which unified all the railroads into either seven or eight systems (depending on which version you wanted). Plus, there were a number of independent plans submitted by various well-meaning concerned citizens. All of them ran into Constitutional issues and went nowhere. <br />[/quote] <br /> <br />Hmmm. The Prince Plan called for seven or eight systems? And what do we have now? Seven systems! So much for Constitutional issues! <br /> <br />What I'd like to know is this: Was the blueprint of the Prince Plan to guarantee a minimum number (3 or more) of healthy systems in all the major regions of the country, or did it allow for one or two systems to dominate in each region? <br /> <br />What you pro-rail industry types fail to realize is that the ICC/STB has always had the power to deny any merger where there was the implication of anti-competitive consequences. The STB could have easily denied either the UP + SP or the BN + SF merger with the same reasoning they used to deny the SP+ SF merger, making any of them contingent on alleviating competition issues. It appears the industry lobbyists had there way with the STB during the 1990's, a perception of influence not limited to the railroad industry during this period.
Tags (Optional)
Tags are keywords that get attached to your post. They are used to categorize your submission and make it easier to search for. To add tags to your post type a tag into the box below and click the "Add Tag" button.
Add Tag
Update Reply
Join our Community!
Our community is
FREE
to join. To participate you must either login or register for an account.
Login »
Register »
Search the Community
Newsletter Sign-Up
By signing up you may also receive occasional reader surveys and special offers from Trains magazine.Please view our
privacy policy
More great sites from Kalmbach Media
Terms Of Use
|
Privacy Policy
|
Copyright Policy