They stopped turning a profit because the government regulated their profits (after throwing money at them hand over fist, which was naturally exploited) and then federalized it when it fell apart when they decided finally to go to war.
During World War I, regulation prevented the rail industry from properly responding to an uptick in rail demand for exports to fuel the war's various foreign factions (ship capacity had been greatly reduced by German submarines). After the rail companies asked for a rate increase in order to help deal with the increased traffic (which was rejected), the President seized the rail network in order to sidestep the debacle and get their exports out.
The rails were de-nationalized when the war ended 2 years later. After that, the use for passenger travel steadily declined as automobile and bus transportation grew, and the rails never recovered (except during WWII). In 1971, when the entire network was about to collapse, the government created Amtrak. Amazingly, most of the network is still limited in capacity and speed due to regulations from 1947. And most of the improvements in the system have come since 2000. Any subsidies that could have upgraded the network or increased capacity or efficiency over a period of 80 years went into building highways and airport control towers (but not more efficient public buses or light rail).
Of course, Amtrak still leased its rail lines from the railroads, so the old rail companies became the new landlords and freight providers, while Amtrak serviced passengers. Amtrak basically cut passenger service and available rail lines in half, with whole corridors becoming freight-only. Later Amtrak bought bankrupted railroad track, and currently something like 25% of the rails Amtrak travels are owned by it.
The parent is half-correct. The freight customers don't have the same needs as the passengers, and "more convenient" methods of transportation exist for them, but for some reason the government demands that passenger rail remain (for the next big war?) so it got bailed out and nationalized.
They stopped turning a profit because the government regulated their profits (after throwing money at them hand over fist, which was naturally exploited) and then federalized it when it fell apart when they decided finally to go to war.
During World War I, regulation prevented the rail industry from properly responding to an uptick in rail demand for exports to fuel the war's various foreign factions (ship capacity had been greatly reduced by German submarines). After the rail companies asked for a rate increase in order to help deal with the increased traffic (which was rejected), the President seized the rail network in order to sidestep the debacle and get their exports out.
The rails were de-nationalized when the war ended 2 years later. After that, the use for passenger travel steadily declined as automobile and bus transportation grew, and the rails never recovered (except during WWII). In 1971, when the entire network was about to collapse, the government created Amtrak. Amazingly, most of the network is still limited in capacity and speed due to regulations from 1947. And most of the improvements in the system have come since 2000. Any subsidies that could have upgraded the network or increased capacity or efficiency over a period of 80 years went into building highways and airport control towers (but not more efficient public buses or light rail).
Of course, Amtrak still leased its rail lines from the railroads, so the old rail companies became the new landlords and freight providers, while Amtrak serviced passengers. Amtrak basically cut passenger service and available rail lines in half, with whole corridors becoming freight-only. Later Amtrak bought bankrupted railroad track, and currently something like 25% of the rails Amtrak travels are owned by it.
The parent is half-correct. The freight customers don't have the same needs as the passengers, and "more convenient" methods of transportation exist for them, but for some reason the government demands that passenger rail remain (for the next big war?) so it got bailed out and nationalized.