Amtrak was created in the early 1970s to rescue America's failing passenger rail system by bringing it under the control of a single quasi-governmental authority. Trains had been the primary means of intercity travel up to World War II, during which gasoline rationing filled many trains to standing-room-only. But passenger volume rapidly fell once the war was over, the automobile assuming primacy as a symbol of prosperity and mobility, a necessity for commuters in brand-new suburbs inaccessible by rail, and a commodity whose manufacture was central to the postwar industrial boom.
Nevertheless, a number of railroads continued to run passenger trains at a loss so long as they had a robust freight traffic to subsidize them. But by the end of the 1960s competition from truck freight, combined with inept management, spawned numerous bankruptcies (such as the New York Central and Pennsylvania Railroads, which merged to form the Penn Central in a last ditch but unsuccessful effort to avoid insolvency). In 1970, when President Nixon signed the Rail Passenger Service Act creating Amtrak, fewer than 10 percent of intercity travelers were riding the rails, on a total of only 450 scheduled trains a year—and three-quarters of the scheduled trains had discontinuance petitions pending before the Interstate Commerce Commission.
Many government officials in Washington were skeptical of Amtrak because they saw the new agency as an instance of throwing good money after bad, but the relatively modest appropriation passed by Congress included $40 million from the federal government plus another $100 million in guaranteed loans. A number of unprofitable routes were to be eliminated immediately, in return for which private railroads buying into the system would ultimately contribute $192 million in monthly installments over three years.
On May 1, 1971, Amtrak ran its first trains. At first, these were the same as before, but now run by the original railroads under contract (as some cities' commuter-rail systems, notably Boston's, would continue to be into the 1990s); later, the trains were motley assemblages of aging steam-heated cars in a rainbow of different companies' colors behind engines newly painted with Amtrak's red-white-and-blue arrow logo. An immediate and visible change, however, was in advertising. With such imagery as a frustrated Paul Revere on horseback surrounded by stalled bumper-to-bumper car traffic, and a one-way Boston-New York fare of $9.90 (and a round trip for just a dime more), Amtrak appealed both to the mind and the wallet.
And to a great extent the strategy worked. Students and young adults on tight budgets found the cheap fares irresistibly attractive, and enjoyed the camaraderie and adventure of train travel, even on antiquated equipment prone to failure (although, to its credit, Amtrak shops in Boston, Wilmington, Delaware, and elsewhere were reconditioning the old equipment as fast as they could) and with only a modest likelihood of on-time arrival. Thanks in large part to rebounding ridership, profitability was soon restored to the Washington-to-Boston corridor, most of which was bought outright from the bankrupt Penn Central in 1976.
Although the mingling of train travelers was arguably a social force for democratization, a second factor in the recovery of the Northeast Corridor was its first-class service. Although parlor cars were nothing new (complete with spacious seats and obliging service staff—mostly black, a holdover from the heyday of the Pullman sleepers), Amtrak sought to attract more affluent customers by introducing its priority Metroliner trains, which cut three-quarters of an hour off the Washington-New York run and whose interiors, reminiscent of airplane cabins, featured headrest-backed seats equipped with folding tray-tables, high-tech stainless-steel chemical toilets, and even on-board telephones. A fleet for ordinary coach service, with similar styling but no telephones, was gradually introduced to replace the rebuilt "Heritage" cars as well. As the quality of service improved, so did ridership among older citizens, many of whom were attracted both by the nostalgia of train travel and by affordable excursion and senior fares.
Amtrak's first decade saw a race of capital improvements against deteriorating infrastructure, for the earlier railroads had spent little on upkeep as they sank deeper into debt. In the Northeast Corridor, several hundred miles of worn track on deteriorating wooden ties were replaced by long sections of continuous-welded rail bolted to concrete, and roadbeds were regraded to allow higher operating speeds. A daily trip by a prototype turbo-train, the "Yankee Clipper"—the name borrowed from a former Boston and Maine train to Bangor, discontinued in the mid-1950s—was introduced on an experimental basis between Boston and New York for several months in 1975. (However, the turbo trimmed only a half hour off the time of the fastest conventional express run, the "Merchants' Limited," and wobbled alarmingly at its top speed of 90 miles per hour. It was quietly withdrawn from service several months later.)
Meanwhile, Congress was becoming increasingly uneasy about its allocations to Amtrak's budget, since it could not see the analogy between such subsidies and the less visible public underwriting of the competition—the highways and airports—through such self-perpetuating taxation schemes as the Highway Trust Fund. Amtrak managed to beat back challenges to its funding by pledging to become a break-even business by the turn of the century, a deadline subsequently extended to the year 2002.
In 1981, Amtrak declared that its policy would be to set fares "at a level designed to produce the highest possible revenue." Ceasing to try to compete with intercity bus prices, the company eliminated most excursion fares. By 1998, a round trip by train between Boston and New York cost more than twice the fare charged by the principal bus carrier, Greyhound; not surprisingly, many students and the urban poor now shunned the train as prohibitively expensive, so that even as Amtrak crossed the $1 billion mark in its annual revenues, it had for all practical purposes ceased to be passenger rail for all the people, and was now affordable only by the middle and upper classes.
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Edmonson, Harold A., editor. Journey to Amtrak: The Year History Rode the Passenger Train. Milwaukee, Kalmbach Publishing Company, 1972.
Gärtner, Michael. Riding the Pennsy to Ruin: A Wall Street Journal Chronicle of the Penn Central Debacle. Princeton, Dow Jones Books, 1971.
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AMTRAK. On 1 May 1971, the U.S. government made Amtrak responsible for managing and operating all national passenger train service in the United States. Its name was derived from the words "America" and "track." Amtrak was created as a quasi-public corporation—a unique blend of government funding and oversight with private management and accountability.
By the late 1960s, a precipitous fifty-year decline in the quantity, quality, and profitability of American passenger rail service prompted high-level government debate over the need for some measure of public assistance. Between 1929 and 1966, passenger train routes—measured in miles—declined by nearly two-thirds. Technological improvements in the automobile, increased government funding for highway construction, and the growth of the commercial airline industry all contributed to the decline. Poor track conditions, outdated equipment, and unreliable service made train travel far less desirable than these other forms of transport. By 1967, the industry's first year without U.S. mail service business, the annual loss for the combined passenger train industry was $460 million. After that year, many companies considered terminating their passenger routes.
After two years of negotiations aimed at averting the loss of the entire passenger rail system, President Richard Nixon signed the Railpax bill on 30 October 1970. By April 1971, the entity's name was changed to Amtrak, and twenty of the twenty-six eligible private rail companies had signed the contract to join the new corporation. Despite Amtrak's efforts to consolidate passenger routes into a more manageable, efficient structure, the initial mandate from the Department of Transportation required the continuation of many marginal routes. It would be eight years until the corporation was given more flexibility in the design of its route structure. There were other obstacles as well. The initial federal grant of $40 million was less than 10 percent of the annual losses sustained by the private companies in their last pre-Amtrak years and not nearly enough to begin a process of rebuilding the industry. The new corporation was also required to operate under the existing labor contracts of the member companies, and management had little flexibility in reallocating workers in the new operational structure. Amtrak was also faced with the nearly impossible task of reversing the long-term public ambivalence to train travel while being able to provide only old, uncomfortable, and unreliable equipment.
While total passenger volume increased from 17 million in 1972 to 23 million by 2002, there had been no net increase in ridership since 1988. Yet during this stagnant decade of Amtrak passenger growth, commuter train passenger
volume jumped from 15.4 million to 58.2 million. This disparity indicated that Americans valued rail travel as a means to move to and from their occupations, or to move from suburb and countryside to large cities for shopping or entertainment, but as a means of transporting people from city to city, Amtrak faced stronger competition from the automobile and the airplane than it did in 1971.
Amtrak's most successful sector was the Northeast Corridor, the stretch of rails to and from Washington, New York, and Boston, and accounted for two-thirds of Amtrak's ridership and revenues. Ridership in the corridor went up after the introduction in 2001 of the Acela Express trains, which could achieve a top speed of 150 miles per hour, and after the terrorist attacks in New York and Washington on 11 September 2001. But the 1997 Amtrak Reform and Accountability Act set 2 December 2002 as an absolute deadline for Amtrak to reach operational self-sufficiency and the loss of federal support, and by the summer of that year, the Amtrak Reform Council was considering breaking off the Northeast Corridor as an independent entity and taking bids from private companies to finance long-distance trains elsewhere in the system.
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