A clarification to Paul's earlier note.
The Staggers Act didn't significantly change the statutory standard applicable to most rail abandonments. Since the 1920's, the standard has been that an abandonment would be permitted if continued operation of a line would cause a "burden" on interstate commerce (ie., the line would lose money), and that was not outweighed by the harm the abanonment would cause to shippers and communities served by the line. Obviously, this is a pretty subjective standard and it left lots of room for policy decisions by the agency, particularly as to how much "harm" had to be shown to warrant requiring retention of a money losing line. In the early years, many abandonments were denied due to "harm". However, since the 1970's, it has been very rare for the agency to require a money losing line to be kept in service because of shipper or community harm. This represented a major policy shift by the agency, and led to a lot of abanonments being approved that wouldn't have been approved in earlier years. But it wasn't compelled by any statutory changes.
The Staggers Act (or the Regional Rail Reorganization Act, I forget which) did enact a special abandonment procedure applicable only to Con Rail, which operated much as you describe. Under this procedure, CR could file a "notice of insufficiant revenue" with the ICC and abandonment was automatic, subject to the right of other persons to acquire the line. Where CR utilized this procedure, the acquirer could obtain the line for less than net liqudiation value (75% of NLV is the number that sticks in my head). This procedure was applicable only to CR, and I think it may have expired.
The real change in abandonments for the rest of the railroad world has been one creating by agency policy - the ICC and STB's use of exemptions. The 1976 4R Act gave the ICC the authority to "exempt" transactions or classes of transactions from regulation, and that authority was expanded by Staggers. Where a transaction is "exempted", the railroad can go forward with it without any agency approval. The ICC very aggressively used its exemption authority in the abandonment area. It did so, initially, by freely approving railroad "petitions for exemption" covering individual abandonments. Later, the agency adopted a "class exemption" covering lines which had not originated or terminated any on-line business in two years. Where the class exemption applies, a railroad can effectuate an abandonment by simply filing a fairly summary "notice of exemption" with the agency. The notice of exemption doesn't try to demonstrate that the old regulatory standard is met. It simply demonstrates that the abandonment meets the conditions of the class exemption. Today, the vast majority of rail abandonments are authorized by exemptions (either "petitions for exemption" or "notices of exemption" under the class exemption). Occasionally, however, you will still see a full blown abandonment application (the railroad may decide it is best to use a full application if a line is carrying a lot of traffic, and/or the railroad expects substantial opposition). In these cases, the old standard still applies in all of its faded glory.
gabe At the time, I more or less believed that NS/N&W was responsible for both fires. Now, as an attorney, there is no way I believe that NS has such temerity, as the risk/reward for such criminal activity for a non-judgment proof corporation simply is not worth the risk. Also, it is noteworthy that NS eventually passed on the landfill deal and did not build the spur. In any event, the initial severance of the Clover Leaf line was from this bridge fire, rather than a straight abandonment. Gabe P.S. RWM, the reason I am copying you on this one is, I seem to remember an individual with unequalled knowledge of the railroad industry and whom I have very high respect for once told me at a University of Depaul rail confernce that there was a Missouri Pacific line that was abandoned more or less to keep it from falling into the hands of a competitor. Of course, I am not contending that this disproves the claim that railroads do not abandon lines for such reasons, but I am wondering whether the MoPac line (that I believe saw SP freight, or vice versa) was some kind of exception that proves the rule.
At the time, I more or less believed that NS/N&W was responsible for both fires. Now, as an attorney, there is no way I believe that NS has such temerity, as the risk/reward for such criminal activity for a non-judgment proof corporation simply is not worth the risk. Also, it is noteworthy that NS eventually passed on the landfill deal and did not build the spur.
In any event, the initial severance of the Clover Leaf line was from this bridge fire, rather than a straight abandonment.
Gabe
P.S. RWM, the reason I am copying you on this one is, I seem to remember an individual with unequalled knowledge of the railroad industry and whom I have very high respect for once told me at a University of Depaul rail confernce that there was a Missouri Pacific line that was abandoned more or less to keep it from falling into the hands of a competitor. Of course, I am not contending that this disproves the claim that railroads do not abandon lines for such reasons, but I am wondering whether the MoPac line (that I believe saw SP freight, or vice versa) was some kind of exception that proves the rule.
Well Gabe,
Just being frank,while I find RWM's presentation to be very plausable, I don't necessarily see the existence of a formally prescribed methodology for abandonment (as he describes), to be any kind of "proof positive" that the brains inside the railroads coundn't find ways to manipulate this system and still facilitate "strategic" abandonment in ways designed to thwart competitors from picking up the(ir) spoils.
Just look at how the RR's have historically manipulated passenger service offerings when their first priority was to kill off routes, scheduling connections hours apart in the middle of nowhere expressly to facilitate inconvenience, removing food service, and chopping locals up into less than desirable segments that best amount to (remaining) trips from nowhere to nowhere, forcing passengers to exit trains before USEFUL destinations were attained.
In illustration, just look at how the NKP facilitated EXACTLY such tactics: with the passenger service on the former cloverleaf See page 166
Indeed, to claim that the abandonment regs somehow PREVENTED railroad minds from concocting elaborate strategic abandonments seems to sell these great minds short of their capabilities. I suspect they were up to the challenge,
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