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RF&RR
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In 1968, of course, the ill-fated Penn Central merger was consummated, stuffing the New Haven into the mix a year later. By 1970, what was deemed to be anti-trust in the early 1900s was now recognized as an important component of railroad survival, when Burlington Northern was formed in March. Three months later, colossus PC filed for bankruptcy, nearly bringing down the American economy with it.

As a result, the United States Railway Association was formed in 1974 to rationalize the Northeastern railroad system in the wake of the bankruptcies of Penn Central and other railroads. The fear was that if rationalization did not take place, and promptly, much of even the viable portions of rail service in the northeast would be at risk.

In effect, the USRA, which ended up recommending the formation of Conrail, was installed to provide the “cover” to abandon large portions of routes that were no longer economically viable, and to fold most of the remaining railroads in the area into a single entity. It would be an interesting intellectual question whether this could have been accomplished at all via traditional ICC proceedings, or even if it could, how long that might have taken.

The Staggers Act, and Finale

Following the creation of Conrail in 1976, in a further acknowledgment of the fact that U.S. railroads were no longer de facto monopolies in the U.S. transportation market, the Staggers Act was passed and became law in 1980. This effectively deregulated the U.S. railroad industry, and enabled it to reverse its previously declining share of the U.S. surface transportation industry.
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