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The Federal government effectively subsidizes truck freight - have they ever tried to subsidize rail freight?

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Posted by BaltACD on Sunday, February 3, 2019 9:03 AM

RailRoader608
 
CMStPnP

So didnt we sink $7-10 Billion into CONRAIL before the Feds sold it off at $1.5 Billion or so?    Wasn't that a subsidy? 

I don’t know that story. What was Conrail and what happened with it?

http://www.conrail.com/history/

Never too old to have a happy childhood!

              

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Posted by zardoz on Sunday, February 3, 2019 1:35 PM

Backshop

 

 
zardoz

If that is correct, then trucking uses 32x more labor to deliver 10x in sales....not exactly what I would call efficient. 

 

 

Not really.  How many of those railroad shipments were siding to siding and how many were intermodal that required a truck to deliver them the last 10-300 miles?

 

I agree that it is not a linear comparison, but regardless of how the labor is divided or how the freight is transported, 32x is always bigger than 10x.

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Posted by CMStPnP on Sunday, February 3, 2019 1:48 PM

Prior to Conrail we had other direct federal subsidies to railroads perhaps not always in the area of freight.   The most recent Milwaukee Amtrak depot was built in 1965 to consolidate the C&NW and Milwaukee Road rail passenger facilities in large part due to a rather large financial grant from WisDOT.

The first Milwaukee Road Hiawatha was built in large part due to a make work program grant passed by the Roosevelt Administration in the 1930's.

Other examples as well.   Even private businesses that you would think would never have any inkling or need for a subsidy get one.   My Father used to run a large manufacturing firm in SE Wisconsin with annual revenues of approx $30 million a year.    Firm was doing great financially (and still is), yet Wisconsin couldn't help itself and offered him subsidized bonds to (Industrial Revenue Bonds they were called) to expand business operations in the state.    The bonds were underwritten by the state in some way or subsidized to make them cheaper than most other sources of financing.   They didn't really need the discount and would have expanded anyway but like I said state government had the taxpayer money burning a hole in it's pocket and so ....

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Posted by RailRoader608 on Monday, February 4, 2019 10:12 AM

CMStPnP

The bonds were underwritten by the state in some way or subsidized to make them cheaper than most other sources of financing.   They didn't really need the discount and would have expanded anyway but like I said state government had the taxpayer money burning a hole in it's pocket and so ....

 

 

Warning for language but this reminded me of a scene from The Wire (great show if anyone here hasn't seen it before).

 https://www.youtube.com/watch?v=6ktvE2vfxSQ&feature=youtu.be&t=85

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Posted by charlie hebdo on Monday, February 4, 2019 2:11 PM

The PRR got a $77 mil. loan in 1934 from the Public Works Administration (repaid) for additional electrification of lines, such as Paoli to Harrisburg.

The aid given for building many of the transcontinental lines was land grants of 175 million acres (larger than TX) and also US bonds for construction. 

The original Illinois Central Railroad (A. Lincoln was its lawyer and lobbyist) got the first railroad land grant in 1850.

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Posted by zugmann on Monday, February 4, 2019 10:03 PM

charlie hebdo
The PRR got a $77 mil. loan in 1934 from the Public Works Administration (repaid) for additional electrification of lines, such as Paoli to Harrisburg.

When they got that money, just about everyone in my town became an electrician overnight. 

From what I was told, the PRR took a train load of these new-found "eelctricians" from town, brought them to the outskirts, told them to get lost for 10 hours, then picked them up again to bring them home.  Did this for the whole summer, or until the WPA money ran out.

 

(Or at least that's what I was told).  Maybe someone was making it all up.

It's been fun.  But it isn't much fun anymore.   Signing off for now. 


  

The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.t fun any

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Posted by GERALD L MCFARLANE JR on Monday, February 4, 2019 11:20 PM

CMStPnP

So didnt we sink $7-10 Billion into CONRAIL before the Feds sold it off at $1.5 Billion or so?    Wasn't that a subsidy? 

After all was said and done, between the IPO(Initial Public Offering) and the final sale of Conrail to NS and CSX it's one of the few things the Government actually ended up  either breaking even on or recouping more than was spent, but you'd never know that from typical Government accounting practices.

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Posted by charlie hebdo on Tuesday, February 5, 2019 9:17 AM

GERALD L MCFARLANE JR
After all was said and done, between the IPO(Initial Public Offering) and the final sale of Conrail to NS and CSX it's one of the few things the Government actually ended up  either breaking even on or recouping more than was spent, but you'd never know that from typical Government accounting practices.

 

You are right, Gerald.  Conrail received federal aid totaling about $7 bil. The IPO gave ~$1.65 bil. back to the Feds while the takeover by NS and CSX gave the feds another $10.3 bil. 
https://www.nytimes.com/1999/06/01/business/conrail-chugs-off-into-the-sunset-csx-and-norfolk-southern-take-over.html

 

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Posted by Murphy Siding on Tuesday, February 5, 2019 10:35 AM

charlie hebdo

 

 
GERALD L MCFARLANE JR
After all was said and done, between the IPO(Initial Public Offering) and the final sale of Conrail to NS and CSX it's one of the few things the Government actually ended up  either breaking even on or recouping more than was spent, but you'd never know that from typical Government accounting practices.

 

 

You are right, Gerald.  Conrail received federal aid totaling about $7 bil. The IPO gave ~$1.65 bil. back to the Feds while the takeover by NS and CSX gave the feds another $10.3 bil. 
https://www.nytimes.com/1999/06/01/business/conrail-chugs-off-into-the-sunset-csx-and-norfolk-southern-take-over.html

 

 

Are you sure about that? Didn't the IPO  effectively sell ConRail to private sources who then sold for $10.3 billion?

Thanks to Chris / CopCarSS for my avatar.

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Posted by charlie hebdo on Tuesday, February 5, 2019 10:31 PM

Murphy Siding

 

 
charlie hebdo

 

 
GERALD L MCFARLANE JR
After all was said and done, between the IPO(Initial Public Offering) and the final sale of Conrail to NS and CSX it's one of the few things the Government actually ended up  either breaking even on or recouping more than was spent, but you'd never know that from typical Government accounting practices.

 

 

You are right, Gerald.  Conrail received federal aid totaling about $7 bil. The IPO gave ~$1.65 bil. back to the Feds while the takeover by NS and CSX gave the feds another $10.3 bil. 
https://www.nytimes.com/1999/06/01/business/conrail-chugs-off-into-the-sunset-csx-and-norfolk-southern-take-over.html

 

 

 

 

Are you sure about that? Didn't the IPO  effectively sell ConRail to private sources who then sold for $10.3 billion?

 

 

I think you are right.

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