Abstract
This article discusses the railroads' inadequate earnings picture and notes that despite recent government intervention the roads are still in trouble because of rigid rate structure, heavy subsidies to other modes and costly labor contracts. Solutions to date have been inadequate and the author sees little potential in mergers and abandonments. He recommends revamped labor contracts, freedom in rate making and permanent subsidy for deficit lines whose retention is justified. While recommendations for imposition of inland waterway user charges, restriction on coal slurry pipe lines and no further increase in truck weight limits might seem to be measures to restrict progress, it is observed that society must decide whether it wishes to preserve a relatively efficient overall low-cost rail transport system with little or no subsidy and minimum pollution and highway congestion, even though it sacrifices some cost reductions on special services.
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