With the establishment of the first commercial U.S. railroad - the Granite Railway located near Quincy, Massachusetts, in 1826 (built to haul granite blocks from a quarry to the Neponset River for trans-shipment to Boston via barge) the earliest railroads were all short lines - financed and built within the communities they served to move people and freight in local commerce. Like all human enterprise, these early railroads quickly began to evolve.
As industry and commerce developed, the local projects began to interconnect, creating longer routes and improving the economies of the areas they served. States became involved and later the federal government joined to support the development of the western trans-continental railroads. The industry became the driving force in the development of our country. By the 1860's, consolidations created regional systems that served ever widening areas. But not every railroad was to become part of a through route or a growing system.
In the early 1900's, most of the basic systems had been created and a number of the railroads not included in those systems had become the core of today's short line railroad industry. They were smaller railroads that were an important economic factor in the communities they served but not of strategic importance to the larger systems. By 1916 the national railroad system peaked at 254,000 miles and many of the small railroads banded together to form the American Short Line Railroad Association to assist and protect their interests.
Throughout the 1920's trucking competition increased, fueled by government built highways. Manufacturing patterns were also changing and the core group of short lines began a slow decline after the Depression. That decline continued into the 1970's. At the same time, the larger railroads suffered in a highly regulated environment with subsidized highway competition and significant labor and management problems. In 1956, President Eisenhower established the Interstate Highway System and new super highways allowed truckers to increase loads and improve efficiency with no capital outlay, while railroads not only had to supply their own diminishing capital but were often subject to punitive taxation on their rights-of-way. In 1968, the New York Central and Pennsylvania railroads merged in a last ditch attempt to remain viable. Despite their best intentions, service worsened, accidents increased, losses mounted and their attempt failed. As they entered bankruptcy, most of the other major eastern carriers followed. As a result of the ensuing crisis, in 1976, Congress passed the 4R Act which established the United States Railroad Association to oversee the reorganization of the eastern railroads into a new entity to be known as Conrail.
One principal requirement in creating a viable Conrail was the elimination of money-losing and marginal branch lines that its predecessors had been forced to operate. Suddenly there were new opportunities for a band of entrepreneurial short line railroaders. A number of marginal branch lines were turned over to new short line companies in a grand and perhaps unintended economic experiment. These short lines were run by hands-on managers who lived and worked in the communities they served - they knew what their customers needed and did all they could to tailor service to those needs. They, and their customers, had a great deal of incentive to make their railroads work and they often had help from state and local governments. Many thought that it was a stop-gap effort that would fail, but it didn't. The experiment worked. It was shown over a number of years that marginal branch lines could not only become viable and valuable feeder lines for their former owners but that they continued to be essential economic forces in their communities. The idea began to spread.
The Staggers Rail Act of 1980 ended most of the economic regulation on the rail industry and among many things gave railroads an exit strategy for unprofitable lines. The major railroads quickly began to market unproductive branches to short line operators and the small railroad industry began an unprecedented rebirth - in essence returning to the roots of railroading. Over the ensuing years thousands of miles of track have been saved from abandonment, and hundreds of communities have been able to maintain and advance their economies thanks to continued rail service. By 2002 the short line industry had grown to 545 railroad companies operating over 29% of all U.S. rail mileage and responsible for 25% of the total freight handled on the Class I Railroads and those numbers continue to grow.
During this period, other problems have surfaced. Continued massive public investment in competing transportation modes, one sided taxes like the Deficit Reduction Fuel Tax which applied only to the most efficient forms of transportation - railroads and barges - and poor and uneven public transportation policy, coupled with changing industrial production in a "world economy" struck a blow against our vital national transportation interests. While many in the government and industry recognized this, reaction was slow. In 2004 things began to change for the better. The railroads were at last able to get Congress to set a timetable for ending the unfair fuel tax and, through a pioneering tax incentive program, Congress gave the short line industry some assistance to upgrade their track to handle the heavier, more cost-efficient freight loads required in the economy of the 21st century. These programs are only the start of what is needed to secure our transportation future.
We are in the middle of a worldwide economic revolution tied to the free market and world economy. It is vital that our cost-effective, environmentally-friendly and fuel-efficient railroads remain a strong and vital part of our national transportation infrastructure if the United States is to retain its prominent position in the future economy of the world.
Edward A. Lewis
Aberdeen & Rockfish Railroad