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[quote]QUOTE: Originally posted by rrandb Some rates were artificialy low. Most were not. What is obvoius was the number of miles of track that disappeared when the railroads no longer had to provide service to customers that were unable to afford these services based on the actual cost of rail service. How do you get permission to adandon a line if its making too much money? You can not. Can you abandon a line because it doesn't make enough money to operate it. YES The remarks were about grainger lines that after de-regulation became dirt paths. Was this because the railroads were making too much money NO [/quote] "How do you get permission to abandon a line if it's making too much money?" The "too much money" statement aside (e.g how much is "too much"?), a line that was profitable pre-Staggers can end up in the scrap heap for any number of reasons. Mergers can make a profitable line redundant, and we all know what happened to the redundant lines post-Staggers, don't we? The seemingly sole purpose of mergers was to allow railroads to lop off assets to *reduce* costs, totally irrespective of whether those assets made money or not. The whole purpose of dereg seems to be to consolidate as much trackage as possible into the fewest corridors possible, to allow maximization of pricing power. Thus, it is probable that most of those lines being scrapped were profitable, but the proliferation of them repressed pricing maximization. Of course, the railroads turned around then and, instead of maximizing all profits on the few remaining lines, used captive rates to maximize profits on only captive US rail shippers, then cross subsidized the rates for non-captive shippers, including all overseas importers. Thus, minus imported oil and in spite of a relatively weak dollar, we still have a growing trade deficit, thanks in part to the market skewing activities of US railroads. Economic theory predicts such, and WHOOOMP there it is. The area of the country I reside in is full of abandoned ROW's that made money for their owners - The Milwaukee PCE, the ex-NP nee BN Palouse and Lewiston line, the SP&S from Spokane to Pasco, the 2nd and 4th subdivisions of the ex-Camas Prairie, the UP Yakima Valley line, et al. It's quixotic and bizzare, yet instead of returning some of those profits to the line in question for maintenance and/or upgrade, the Class I's siphoned off all those profits for other projects, possibly for the cross-subsidies given to the importers of Asian made products![V]
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