End of the Line?

The New Haven Railroad is high camp. "I wouldn't think of giving my business to a railroad that would profit from me," is a typical comment echoing in the dingy expanse of South Station. Cars that look as if they were resurrected from a railroad museum, rumors of past mismanagement, inadequate service--reality quickly catches up to growing myth as the New Haven continues on the downward track to oblivion. Today the railroad has seventy per cent fewer passengers than in 1922, less than half the freight revenue of 1943, one quarter the number of employees of forty years ago. Nothing, including reorganization under trusteeship after the New Haven filed for bankruptcy in 1961, seems to have offered any hope.

Now something is about to happen, something that will put the railroad out of its torture by either killing it quickly or resurrecting it in a new healthy body. On December 1, the Interstate Commerce Commission opened hearings on the New Haven's 256-page application to discontinue all passenger service. The application is a last-ditch stand, and may prove to be an ultimatum that could get the railroad the help that it has been demanding for the last four years.

The fact is that the New Haven, like any other company that is losing money, cannot afford to stay in business. In 1962, six months after three trustees had been charged by the U.S. District Court with determining whether the railroad could be reorganized and maintained under private management, they reported that the source of the New Haven's trouble was its passenger deficit. Every railroad in the country loses money on its passenger operation, but the cause of the New Haven's special problem is its extremely high ratio of passenger service to freight service; one of the smaller roads in the country, it ranks fourth in passenger carrying and second in average commuter haul. Its passenger deficit during the last decade was over $133 million.

The Trustees' 1962 report said that "this railroad cannot be reorganized unless the public authorities assume responsibility for the cost of providing passenger service...Unless the federal and state governments come forward soon with a concrete plan for discharging that responsibility, the Trustees will not be justified in continuing that service." The Trustees maintain that, since the railroad cannot profitably continue to provide passenger service, it should be relieved of its legal obligation to do so. The states should then determine which parts of the operation are in the public interest and support those parts by some form of direct subsidy.

That support has not been forthcoming, and the New Haven feels that the reasons are largely political. There is no easy way to determine the percentage of the operation that each state should be expected to subsidize, and the shares come out differently when they are calculated on the basis of track mileage, or of average passenger numbers, or of the cost of maintaining stations. Governorships and legislatures have changed hands in some of the states since the railroad first called for support. This turnover has made it even more difficult to persuade state politicians to provide the necessary funds.

The ninth and final ICC hearing is scheduled for January 31 in Washington (there is one in Boston on January 17). Chances are considered fair to good that the New Haven's application will be approved, providing the railroad with an ultimatum that the states can no longer afford to ignore. Relieved of any legal obligation to provide an unprofitable service, the New Haven will be unmistakeably recognizable for what railroads in this country--although not in Europe--still are, a private enterprise. It would be surprising if bailing out the New Haven did not become a top priority issue in the New Haven did not become a top priority issue in the New England legislatures in this election year. Constituent pressure is there; a group called the United Communities for Railroad Action now represents commuters in 38 New York and Connecticut towns.

The passenger operation is guaranteed through July 1 under a demonstration project grant from the Federal Housing and Home Finance Agency, and a six-month extension of the grant after that is considered probable. That leaves to decide to set a creative precedent for the maintenance of the public interest when private enterprise fails.