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From: mangoe@umcp-cs.UUCP (Charley Wingate)
Newsgroups: net.politics
Subject: Re: Supposed monopolies: the railroads
Message-ID: <1093@umcp-cs.UUCP>
Date: Sun, 4-Aug-85 22:01:04 EDT
Article-I.D.: umcp-cs.1093
Posted: Sun Aug  4 22:01:04 1985
Date-Received: Wed, 7-Aug-85 02:18:26 EDT
References: <9562@ucbvax.ARPA>
Organization: U of Maryland, Computer Science Dept., College Park, MD
Lines: 30

In article <9562@ucbvax.ARPA> fagin@ucbvax.UUCP (Barry Steven Fagin) writes:

>Regarding Charley Wingate's conjecture that the railroads were
>monopolistic way back when, I merely note that they had the benefit
>of federal land grants and subsidies.  

Unfortunately this is not true; moreover, recent history certainly illustrates
the strong tendency towards consolidation.

Land grants to railroads were only a factor for those railroads with EXTENSIVE
western routes.  Eastern lines (such as the B&O) get any land because the
government didn't own the right-of-way before the railroad went through.
I will not comment on subsidies, because a simply do not have time research
this properly; hidden rebates to "preferred" customers, however, were 
certainly an important factor too.

What really casts doubt on this, however, is the behavior of the railroads
today.  Now it's certainly clear the railroads see a lot of competition
from trucks.  Most of the healthier railroads have considerable bulk traffic
(especially coal) to support them.

Against this background, we see that today there are 14 independent class I
railroads.  In the sixties, before the Staggers Act, there were over 40.
Seven corporations own about 90% of the locomotives in the U.S.  This will be
further reduced if Norfolk Southern is allowed to buy Conrail.  New railroads
are not being built.  It is not unlikely that eventually there will be an
attempt to merge most of the remainder.  There are now no land grants left.
There are no appreciable subsidies.

C Wingate