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Railroad Industry Overview Series - History of the Railroad Industry - October 2007

LMSB Control Number: LMSB-04-1007-072
Affected IRM: X.XX.X

This document is not an official pronouncement of the law or the position of the Service and cannot be used, or cited or relied upon as such.

II. Industry

The following information was obtained from the Association of American Railroads via their website.




The steam locomotive is invented in England.


The first public railway in the world opens in England.


Baltimore merchants charter the first railroad in North America, the Baltimore & Ohio.


The first regularly scheduled steam-powered rail passenger service in the U.S.begins operation in South Carolina, utilizing the U.S.-built locomotive "The Best Friend of Charleston."


A total of 380 miles of rail track are in operation in the U.S.


Five of the six New England states have rail service, as do such frontier states as Kentucky and Indiana  .


More than 2,800 miles of track are in operation.


More than 9,000 miles of track are in operation in the U.S., as much as in the rest of the world combined.


More than 30,000 miles of track are in operation in the U.S.


The Civil War becomes the first major conflict in which railroads play a major role as both sides use trains to move troops and supplies.


President Abraham Lincoln signs the Pacific Railroad Act for the construction of the transcontinental railroad that will ultimately link California with the rest of the nation.


The "golden age" of railroads begins. For nearly half a century, no other mode of transportation challenges railroads. During these years, the rail network grows from 35,000 to a peak of 254,000 miles in 1916.


On May 10, at Promontory, in the Utah Territory, the "Golden Spike" joins the Union Pacific and Central Pacific railroads, marking completion of the first transcontinental railroad.


Presidents from Ulysses S. Grant to Franklin D. Roosevelt travel largely by train. For them, as for virtually every American, the railroad offers the fastest, safest means of travel.


The Federal government seizes control of the railroads for the duration of World War I. By the time they are returned to private ownership in 1920, they are in seriously run-down condition and in need of substantial maintenance and improvement.


Other modes of transportation grow from small beginnings to challenge rail dominance over freight and passenger transportation. By the eve of World War II, automobiles, large buses, trucks, planes and pipelines – supported by government subsidies and less burdened by regulation than railroads -- have become full-fledged competitors to railroads.


The Great Depression exacts a heavy toll on the railroad industry, forcing substantial segments of the industry into bankruptcy.


Railroads remain under private control during World War II and move on average twice the monthly volume of both freight and passengers as during World War I.


Railroads enter the post-war era with a new sense of optimism that leads them to invest billions of dollars in new locomotives, freight equipment and passenger trains. That investment would see retirement of the last steam locomotive by the late 1950s in favor of diesel engines. In spite of this modernization, the decline in rail market share that began before the war resumes.


Intermodal freight -- the movement of containers and highway trailers by rail – is reported as a separate category of freight for the first time. In that year, railroads moved 168,000 carloads of trailers and containers.


Burdened by regulation and faced with subsidized competition, nine Class I railroads, representing almost one-quarter of the industry's trackage, file for bankruptcy protection.


The Rail Passenger Service Act of 1970 creates Amtrak to take over intercity rail passenger service. Amtrak officially begins service on May 1, 1971.


The Railroad Revitalization and Regulatory Reform Act creates the Consolidated Rail Corp. from six bankrupt Northeast railroads. It also included regulatory reforms that were supposed to make the rail regulatory system more responsive to changed circumstances.


The Staggers Rail Act reduces the Interstate Commerce Commission's regulatory jurisdiction over railroads and sparks competition that stimulates advances in technology and a restructuring of the industry, including creation of hundreds of new short line and regional railroads.


Conrail is privatized in what -- at that time -- was the largest share offering in U.S. history as investors pay $1.9 billion to buy shares in the railroad.


After 108 years of existence, the Interstate Commerce Commission goes out of existence and is replaced by the Surface Transportation Board, which assumes responsibility for remaining railroad economic regulation.


U.S. freight railroads move 1.38 trillion ton-miles of freight, more than ever before, setting new safety records in the process.


Intermodal overtakes coal as the primary source of revenue for Class I railroads; intermodal revenue was 22.0 percent of total revenue, or $7.7 billion, while coal revenue was $7.6 billion.


Federal Railroad Administration (FRA) reports continuous improvement in railroad safety, “by nearly every indicator”.


25 years since deregulation of the industry under the Staggers Rail Act of 1980.


Class I railroads set record in hauling 852 million tons of coal (previous record was 804 million tons in 2005).


14.6 million intermodal trailers and containers are moved, eclipsing the 2005 record by 5 percent.


Safest year in the history of the U.S. rail industry.


The industry equaled the 2006 record of hauling 1.77 trillion revenue ton-miles


Due to recession, revenue ton-miles declined 1 percent and intermodal units were down four percent

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Page Last Reviewed or Updated: 05-Mar-2015