17. Railroads were rapidly fading from the American scene in 1970
Both freight and passenger traffic on America’s railroads were perilously close to extinction in 1970. A series of government decisions had given significant advantages to shippers using other means, such as trucks and barges. Subsidies for highway construction had also made driving more feasible. Only a few large urban areas, such as New York, Boston, Chicago, and Philadelphia, had viable regional passenger trains. Intercity passenger traffic had dwindled to next to nothing. On June 21, 1970, the Penn Central – created as a merger of the once rivals Pennsylvania and New York Central – filed for bankruptcy. It was at the time the largest bankruptcy in American history.
Congress responded with legislation which created the National Railroad Passenger Corporation (NRPC). It operated under the name Railpax, before choosing to use the name Amtrak. Amtrak was controversial, with Democrats viewing it as subsidizing a failed industry. Republicans considered it the nationalization of the American railroads. Most viewed it as a compromise to distract the public with the appearance of saving the passenger railroads. Nearly all would be surprised that it would survive fifty years, let alone operate profitably in some corridors, though by no means all. Several years later another Congress created a similar solution for the ailing freight lines, merging them into Conrail.