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Trains Magazine 1961 NovembeHere Comes #58 Tunnel City
Trains Magazine 1961
November 1961Volume 22 Number 1
NEWS-5
NEWS PHOTOS --8
NO. 58 AT TUNNEL CITY18
CASCADE PASSAGE - 122
PHOTO SECTION30
ROUND THE WORLD - 1042
Railway post office 50Of books & trains 52
Stop, look & listen 54Second section56
Running extra57Interchange58
SUBSIDIES: THREE CHOICES
IIN a surprise opinion issued last summer, the Interstate Commerce Commission recommended Federal sub sdies to railroads to "preserve essential passenger services." The Commission
would disburse the money which could total 52 million dollars a year. It would do so under a formula geared to maintenance of way expenses on track, signals, and other fixed plant required for passenger schedules, thus leaving management a "strong incentive" to cut costs since subsidies would not be related to deficits - which totaled 485 million dollars last year. Citing the bankruptcy of New Haven as its Exhibit A, the I.C.C. says other roads may follow; deficits of Eastern roads, especially, look "ominous, deep-seated and endemic" to the Commission.
Said the Commission: "A nation that is serious about propelling a man to the moon should be able to solve the mundane problem of moving its citizens dependably and comfortably some 50 miles or less from home to work without multiplying ribbons of concrete and asphalt that would strangle the central cities they are supposed to serve."
Reaction to the regulatory agency's proposal, which is expected to reach Congress as a bill in early 1962, was split both in Washington and among the railroads. Frowning were Santa Fe ("A first step toward eventual nationalization of all transportation") ; Rock Island ("We don't favor any subsidies"); Sen. George Smathers, Dem., Fla. ("Poorly timed and poorly expressed"); S en. Frank J. Lausche, Dem., 0. ("I'm not going to go along with giving out the taxpayers' money"), but pleased were Pennsy ("Gratifying"); Reading ("Highly encouraging"); Erie-Lackawanna ("Heartening") ; and Sen. Prescott Bush, Rep., Conn. ("The thought of Federal subsidy to these railroads does not upset me so much as it does some other people").
As for the rails, the Walt Street Journal observed dryly in its news columns that "their reactions jibed with their financial health." That is, commuterless Santa Fe with a net operating income of 21.1 million dollars for the first half of 1961 was opposed, but commuter-conscious Pennsy with a deficit of 12.3 million for the same period was very much in favor. The Western position was summed up by Illinois Central's Wayne A. Johnston who declared, "A subsidy is an expensive way of hiding a problem, not of solving it. . . . Allow the railroads the freedom to compete, and they will need no help." For the East, Pennsy's Allen J. Greenough replied, "While the Commission uses the word 'subsidy,' what they plan, we believe, will not subsidize the railroads but
will subsidize the people who are using and need rail suburban and through trains. . . . Everyone knows that the Government is currently subsidizing farmers, home builders, airlines, shipping lines, and truckers, and yet we have heard no talk about nationalizing these important functions in our economy. To my mind, the I.C.C. proposal is a big step in the opposite direction from nationalization."
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Insofar as commuters are concerned, TRAINS believes along with former New Haven President George Alpert that they do not constitute a business at all since it is patently impossible for tax-paying private enterprise to make any profit hauling them. Example: North Western, which cleared a tiny but much publicized profit on commuters in 1959-1960, lost more than 1 million dollars on them in the first half of 1961 alone. Indeed, only the political and social implications of the commuter deficit have prevented its abolition. If a Western line dropped huge amounts of money on a long branch to a played-out mining area, it would apply for abandonment and doubtless win approval. The loss is just as real in the East but a road just can't abandon, say, 30,000 riders a day no matter what. Again, freedom to compete isn't the issue. Businesses compete but not public services such as police and fire departments, sewage sys-stems, schools, and - if you adopt the East's viewpoint - commuter movers.
In any event, there are but three alternatives to the dilemma:
L If Government forces the commuter railroads to treat the service as a business, they will either raise fares to cover costs and taxes until the riders are driven to expressways, or they will go bankrupt trying, as New Haven did.
2.If Government subsidizes commuter railroads by direct aid and/or tax forgiveness, it will save much more money by thus resolving the automobile problem than is ever allocated to the rails. However, the railroads will still be handicapped by owning plant and equipment for and devoting management attention to a traffic which is but a break-even proposition at best.
3.If the commuter issue is faced squarely, Government (directly or through an authority) will do the job itself by buying the track (or trackage rights) and cars required to move X number of people to and from work.
If commuters are indeed a community responsibility, then the third alternative of authority ownership and operation of rail suburban systems is an answer both Eastern and Western railroads should be able to agree on without cav
Continued on page 10
WHAT, NOT ALREADY?
OUR regular waiter downtown at Deutsch & Graun, a gentleman by name of Everett, has a happy habit of calling out, "What, not already?" whenever we depart this commendable bar-restaurant-whether it's 6 p.m. or after midnight. Which is the way feel about concluding our round-the-world articles in this issue. One reward of a writer is that he gets to relive his journey as he turns notes into magazine copy, but more satisfying than that is the chance to say - in word and photo -to someone who hasn't or won't or can't go overseas: I think you'll like this Garratt, that 2-footer, those Japanese interurbans. And judging by the mail, we've won a convert or two. We hope you're one of them.
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