(erielack) Land Grants and Reduced Rates

[Blue Moon Network Administrator <root_@_net.bluemoon.net>]

In the Aug-Sep 1961 E-L magazine:

Of the present 220,000 miles of rail
lines, land grants were a factor in the
building of only about 10%. No federal
land grant aid was involved in building
the other 90%.

In return, the railroads were required
to carry government traffic--freight,
passenger, and mail-- at reduced rates.

This arrangement was in effect for nearly
a century. During that time, the
government benefitted to the extent of
$1,250,000,000 in reduced rates, or
about ten times the value of the land
received--probably the shrewdest busi-
ness deal ever made by our government,
and certainly not a gift.

In contrast, highways, waterways, and
airways are all provided and maintained
by the government out of tax dollars
with only a pittance coming back to
the U.S. Treasury.


Other items of note in this issue's editorial:


Backers contend that the LAKE ERIE-
0HI0 RIVER CANAL should be built because
present transportation costs are too
high. If this were a good reason for
spending $1 billion 130 million of the
taxpayers' money, which the canal would
cost to build, why not ask the govern-
ment to build steel mills and automobile
factories to bring down the cost of
steel and autos? That, of course, would
be socialism and contrary to free enter-
prise principles--just as building of
the canal would be.


and:


THE BERLIN CRISIS is raising questions
as to the railroads' capacity to perform
in wartime as they have been called upon
to do so many times in the past. Exces-
sive regulation and other inequitable
government policies have been directly
responsible for the severely depressed
reserve capacity of the railroads at the
present time. An attitude of complacency
continues to exist on the part of our
lawmakers, who seem to fail to recognize
the seriousness of the situation. Yet
while denying an application for a dis-
aster loan of $5-1/2 million that sent the
New Haven Railroad into bankruptcy, our
government has shown great generosity to-
ward the railroads of foreign countries.
The U.S. has provided more than $1.2
billion of our taxpayers' money for
loans and grants to foreign railroads
since World War II. Just two weeks after
the New Haven went bankrupt, the World
Bank, of which the U.S. is the biggest
shareholder, announced a loan equivalent
to $80 million to the Japanese National
Railways to build a new line between
Tokyo and Osaka. A few days later, the
Export-Import Bank announced authoriza-
tion of two loans totaling $7 million to
the government of Iran for the purchase
of diesel locomotives and road-building
equipment.


Remember, those are all 1961 dollars, what's $1.2 billion and $80 Million 
worth today?

I wonder how much of that $80 billion for the Tokyo-Osaka line was ever 
repaid?

"Regierung uber alles"

Henry

J. Henry Priebe Jr.       Blue Moon President & Network Administrator
root_@_bluemoon.net         www.bluemoon.net - Blue Moon Internet Corp
V.90, X2 & K56flex        www.railfan.net  - The Railfan Network

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