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[quote user="1435mm"] [quote user="gabe"] Sorry, but now that I have renewed my posting for two days, I have to ask a question that I am sure will have a readily apparent answer to most readers who are far more knowledgeable than I when it comes to rail matters. But, what changes hit the rail industry from the 1960s to the 1970s to make things go so horribly wrong? Granted my pool of knowledge is small, but my knowledge of the Illinois Central, Nickle Platte, Southern Pacific, and a few other railroads indicate that--although I would not describe the 1960s as a boom of rail traffic--rail lines seemed healthy and sustainable. But, by the 1970s, it looked like every rail line was heading for a two mile run off a one mile pier. [/quote] Your premise is truly 66 years out of date. It really should be, "What happened to railroads after 1906?" What you think only happened in the 1970s was merely the end-game of the rapid erosion of pricing power and market share caused by the appearance of inexpensive autos and trucks in the the early 1900s coupled with the decision of the public that highways should be publically financed and toll-free, coupled with a refusal by the same public to allow railroads to abandon unprofitable business lines. However because railroad physical plant has a very long lifetime, the railroad industry was able to persist for nearly 50 years, slowly cannibalizing itself. By 1970 there was nothing left to cannibalize; many roads were finished. The 1906 date is very sharply scribed in railroad history. After that date railroad expansion and heavy reconstruction nosedived. (This is old hat, my friend. A.C. Kalmbach and D.P. Morgan co-authored the article “The Golden Age of Railroad Construction”: in the February 1949 issue of Trains that described and analyzed this watershed quite sufficiently.  Well, at least I thought they had!) [quote] The criticism of pre-Staggers rail regulation seems fairly justified to me. Yet, this regulation was with the industry well before 1960; yet it wasn't killing the industry in 1960. Why was pre-staggers regulation killing the industry in 1970? [/quote] Oh yes it was! It just took 50 years for the effects to reach the bitter end, again, because railroads had an immense legacy investment. You are imagining that cause goes to effect quickly, whereas when you’re dealing with something that lasts as long as railroad investment the pig passes through the python slowly. Review the annual reports in the 1945-1955 era of railroads that did not inhabit growth areas, such as the grangers and Official Territory roads, and see how their results after 1952 show their cash position steadily march from positive to zero to negative. [quote] Some may blame the interstate highway system. Yet, at worst, the interstate system strikes me as a two-edge sword, as it allows for increased business in areas that are served by both rail and the interstate. [/quote] What the highway system (of all types, not just the Interstate) permitted was a dissemination and decentralization of manufacturing and distribution of all types, which enabled large amounts of freight to move in short hauls from producer to manufacturer to distributor to consumer and never need to pay the price of consolidation to gain the large-volume, long-distance capability of railroads.  That stranded immense swaths of railroad infrastructure which could no longer pay their way.  Consider meat processing, which was formerly concentrated in large cities or in terminal markets, which the truck enabled to scatter into the cattle-growing regions. According to Kansas Board of Agriculture statistics, the percentage of cattle fed in large Kansas feedlots (1,000 head capacity or more) went from 26.7% in 1960 to 87.6% in 1975. The number of large-capacity feedlots grew from seven in 1952 to 140 by 1974, and grain-fed cattle increased from less than half a million in 1955 to around two million by the 1970s. This was matched by equal growth in red meat packed in Kansas (which historically had not been a major packing state). [quote] Moreover, many mergers started during this time, which you would think would bring more health to the industry. Yet, things got horribly worse after these mergers, not better. [/quote] Saunders “Merging Lines” does the best job to date describing why mergers didn’t work. What I don’t think you’re acknowledging is that mergers were the only trick left to play; railroads had no other options open to them – not even just quitting business. [quote] What happened at 12:00 on December 31, 1969 that caused such a decline in railroading? (realize that this statement is in jest, but I am interested in understanding why railroads could survive in the 1960s, but not the 1970s) Gabe [/quote] Quite simply it took that long to run out of assets. S. Hadid [/quote]There seems to be a contradiction between your hypothesis of decentralization (brought about by improved highways) and your example of the Kansas feedlot growth.  If meat packing grew in Kansas at the expense of the big city meat packing industry, that would suggest an increase in long haul freight prospects, not the opposite.Oh, it's a good example, but not as you framed it.  And it typified the lost opportunities for railroads as time sensitivity became a more pronounced characteristic of intercity freight.If anything, the advent of viable intercity highway travel made possible the economic growth machine that should have played right into the rail industry's hands.  Freeways and airlines aided in shifting passenger transportation away from railroads, thus a big money loser was erradicated.  It was all set up for a more optimized freight rail system.So what happened?In one word - speed, or more precisely the lack thereof in terms of theoretical rail speeds.  Freight movement on highways has always been limited to the 60 - 70 mph max range both for practicality and safety reasons.  Meanwhile, back in the 1930's railroads were approaching 100 mph speeds as a practical max norm, and one would presume a continued evolution of speed into the triple digit range as an average norm.  At this same time top road speeds were still down in the under 50 mph range even with blacktop.Instead, the railroads began slipping back into a comfort zone of 25 mph average speeds for longer and heavier consists.  Once that happened it was all but over for railroads, since now their main items of haulage were mostly non time sensitive bulk goods.  They lost the value-added component of time sensitive cargo, settling for the low margin stuff.Remember John Kneiling's banana trade example?  Same thing - it all went to trucks by default as railroads refused to provide customer-dictated service.The ironic thing is, a predication to speed would not have caused the loss of the bulk commodities.  As I have pointed out time and again, coal and grain can move at 125 mph along with more time sensitive items such as lettuce, bananas, overnight packages, two day packages, etc.  The railroads could have had their potatoes and their cavier.Modern day JIT demands have changed this dynamic somewhat, as the idea of warehousing in transit has taken precidence over shorter manufacture-to-shelf logistics.  An increase in global trade has also played into the railroads' fortunes.
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