Paul, Thank you for the [long <g>] and thoughtful post regarding the ICC. I'm at work and can't go through point by point at the moment, but I will point out that the choice in 1920 was as follows: (1) Do what the ICC was commanded to do to preserve the private sector. or (2) Nationalize the railroads as many other countries had done or were doing. There's almost no other public policy debate at the time. I'm hard-pressed to blame the ICC for the "worse" road taken. I certainly don't blame management for poor decisions -- although they made plenty. I think the Flexi-Van example is a good example of bad management on so many levels -- there certainly was nothing to stop MLW and AT&SF from making a deal for through flexi-van service to the east, even without a merger. And even post-regulation, the railroads still can't get through freight interchanged across Chicago in an efficient manner. But in the end, if one is looking for the "Smoking Gun" the ICC is the wrong place to start, I think. I'd go with the Federal Highway Act of 1916 as the seminal moment in destroying invester wealth in rail transportation as it turns out. It is more than coincidence that passage of the law coincides with the height of railway mileage in the United States. Progressives simply said to hell with the railroads and their alleged robber barons and supported tax-built and tax-subsidized streets and highways (abd later heavily subsidized airlines), and we had a new ear of Army Corps of Engineers projects as well (they were awfully close to building a huge canal -- big enough for sea-going vessels -- between Bordentoan and South Amboy as late as 1946). Our streets and highways remain littered with the carcasses of lost opportunity costs of the trucking industry. A low barrier of entry lets every shmoe buy a tractor, pay himself a pittance using public highways that don't even pay property taxes (as the railroads do) and have the railroads' business for lunch. ICC or no ICC, railroads could not compete with this at any price. I'll grant you that a sin of the ICC was to discount all the myriad of subsidies to other modes as irrelevant. But even without the ICC, we see subsidies to other modes discounted while a pittance to rail is a terrible attack on free markets (look at the continuing battle over Amtrak's subsidy for an object lesson). To get a hint of list copntent into this message, the NY Southern Tier Counties all threw relatively huge amounts of tax money into building Airports for the likes of Republic and Mohawk to compete with -- i.e. put the Erie and DL&W out of the passenger business. Free market economics would decree that the airlines build their own airports and terminals. But the capper is that they slapped supplementary property taxes on rail facilities -- including passenger stations! to help subsidize the airlines. The AAR put out a booklet on tax and subsidy outrages, including this one (which also hit the LV). It should be noted that railroads took the high road and refused subsidies on principal, but lost their shirts as a result -- again, ICC or no ICC. In the end, you are right -- the big bad hand of government killed off market economics in railroading. But it was by subsidizing the competition, not by and specific calumny directed toward the railroads by the ICC either purposely or by bureaucratic indifference. Cheers, Jim The Erie Lackawanna Mailing List http://EL-List.railfan.net/ To Unsubscribe: http://Lists.Railfan.net/erielackunsub.html ------------------------------
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