Part 6 - Patriotism and Money, Auto Train, The Results of Prosperity and The Need for Speed
The 1987 Wall Street crash was short and sharp, though very large indeed, with the Dow Jones average losing nearly a quarter of its wealth, a problem which was compounded by a growing crisis in the Savings and Loan industry, which began to collapse for fair in early 1988. The sinking of the US dollar caused additional problems, mainly due to the loss of wealth on the part of many Americans. But the response to it stunned most - and rewrote the plans for how to deal with future recessions.
1988 was an election year in the United States, Canada and Mexico, and in all three cases the confidence of the time caused consumer spending to continue to climb. This was added to by the United States' falling trade deficit, and the response by the Federal Reserve and the US Treasury was to hack down interest rates, as well as forming the Resolution Trust Corporation to handle the savings and loans taken over by the federal government. The costs of this were high, but most economics agreed that the problems could have been considerably worse.
Incoming President George H.W. Bush was keen to enter his first term on a high, and he agreed to authorize a very large amount of additional spending, direct US federal government investment in major projects, as well as creating a new company, the Federal Investments Corporation, to supervise the loans and money sent out to revive the economy in 1989 and 1990. The biggest beneficiaries of this largesse in the transport system was companies investing in oil exploration in the United States, and the federal government-operated transport firms, which included Amtrak and Conrail. Amtrak's Acela plans were accelerated by the additional money made available to them in the late 1980s and early 1990s budgets.
The reduced value of the US dollar had the effect of attracting additional foreign investment and encouraging further the growth of export-oriented businesses in the United States, and the Canada-US Free Trade Agreement, signed in October 1988, added to this, allowing American firms to more easily access Canada's vast raw material and energy resources. The FTA also included a large number of changes on requirements each nation required to do business. The railroads responded to this, as well - Canadian National Railways trimmed its network dramatically in the 1980s and 1990s to turn profits, and 1990 Burlington Northern took the plunge and began the building of its "Great White North" line, running from Billings, Montana to Edmonton and Fort McMurray, Alberta, which opened in 1994. Other buyouts and new lines appeared in the 1990s, with rail companies on both sides of the border being in the action.
1990 saw America post a trade surplus for the first time since the early 1950s, adding to the confidence. Many American firms took their progress to heart, and especially as war loomed in the Persian Gulf, many companies found it useful and attractive to wrap themselves in the flag. However, if anything had been taught by the lessons of the 1980s in American business, it is that when a company's workers prosper, so does the company, and small companies could carve themselves out a niche even in markets that had once thought to be out of reach of American workers. One of these new companies, American Shipbuilding Corporation, bought the former Bethlehem Steel Quincy shipyard from General Dynamics in 1986, and their 1990 efforts included the order of six massive, 380,000-ton oil tankers by Chevron, an order worth $370 million. McDonnell Douglas announced the development of the MD-12, a gigantic double-deck airliner built to eclipse the Boeing 747, and America's largest nuclear power station was opened in Victoria County, Texas. Hess Energy, having made nearly $500 million in profits in just two years from its Nazareth, PA, Fischer-Tropsch synthetic crude oil plant, announced plants to build three more similar facilities at Lincoln, NE, Green River, UT and Sevierville, TN. The good news was in itself something of a ploy, but it worked - while growth slowed slightly in 1990 and 1991, the recession stayed dead, and the dot-com boom helped fuel additional growth in the US economy in the 1990s. As the recession ended, the United States found itself within striking distance of balancing its federal budget for the first time in decades, and in the 1991 budget Washington did just that, posting a $17 Billion surplus. While the surplus was relatively small, it was enough to send markets soaring just that easily. It was also noted that Conrail turned a profit of $676 million, while Amtrak's total needed outlay was just $290 million, its lowest need ever.
While the late 1980s had seen many confidently predicting that Japan and Germany would soon be real rivals to the United States in economic power, by 1991 that idea was dead, and with the Soviet Union on the verge of collapse, it looked as if the United States would be the world's sole superpower. Those ideas gained additional traction after the 1991 Gulf War, which saw the United States and a huge coalition absolutely stomp Saddam Hussein and his Iraqi Army. The end of Hussein, however, kicked off a mess which engulfed most of the Middle East. Iraq's fall caused Iran to move, and caused the nation to fall apart. Iraq's collapse caused a massive oil price shock - which was added to when terrorist attacks struck the primary oil terminal for Saudi Aramco in November 1991, oil prices rose dramatically, hitting $100 a barrel for the first time on November 17, 1991 - a five-fold increase on what it was two years earlier.
With this and spot shortages, the United States faced a new energy crisis, and while it was short - Aramco fixed its terminal in a matter of three months - it had a major effect on the winter of 1991-92, causing the first gas lines since 1974. The disintegrating Soviet Union, which broke into several bouts of open civil war in late 1991 and early 1992, didn't help matters. This provided the impetus for Project Independence, first proposed by Nixon in 1974, to be resurrected. The sharp recession, however, cost Bush his re-election - he was beaten by Democrat Bill Clinton in the 1992 elections.
The United States was better off than many countries to deal with oil shocks, with its own oil reserves, access to large additional oil supplies in neighboring Canada and Mexico and huge coal reserves, which were the focus of the energy independence efforts in the 1990s. Hess' brave decision to enter the synthetic crude market in 1984 paid off in spades, as they became the example of how to use the technology to make vast quantities of oil, and in the process rose to be a new addition to the ranks of major American oil companies. America also had the benefit of 241 operating nuclear reactors, producing nearly 40% of the United States' electricity, which helped reduce demands on fossil fuels for electric power.
Clinton took to the White House in 1993 as the first Democrat President since Carter left in 1980, entered into the White House with the United States facing a realization that its future was reliant on its infrastructure. Clinton took to this like a duck to water, beginning additional changes to the United States' social systems, including a rewrite of the United States' social systems. Contrary to predictions, Clinton didn't substantially dismantle the United States' military, instead preferring to fund his own programs through economic growth, closing tax holes, changing the welfare systems for better efficiency and expanding taxes in a few places, particularly sin taxes and fuel taxes. The dot-com boom did Clinton a favor here, as it created a massive growth in the United States' tech sectors, and provided all the funding Clinton needed to do his programs.
First on his list, and a major one, was the building of a nuclear waste reprocessing plant, which began building on the Hanford site in Washington state in 1993. The Department of Energy built a chemical reprocessing facility in about 18 months, and the plant began operating in 1995. Two reactors were built on the site for transmutation processes, and a second chemical reprocessing plant was opened on the site in 1998, while the reactors went online in 2000. The facility was entirely paid for by money from the American nuclear industry - taxes had been leveled on the industry for that purpose going back to the 1970s for that purpose - and it was discovered, rather to some surprise, that the reprocessing also produced marketable amounts of several precious metals, including rhodium, platinum and gold. The sale of these netted some money as well for the Department of Energy. The existence of the facility also allowed quicker cleanup of the heavily-contaminated Hanford site, which had been producing plutonium for bombs since 1944.
Clinton lost control of Congress in 1994, but thanks to infighting among the GOP and the optimism of the time not working in their favor, Clinton cruised to re-election in 1996 and the Democrats retook Congress in 1998. The Republicans, led by Newt Gingrich, had plenty of supporters at first, but as they attempted to go after Clinton personally and spent months investigating his actions in 1997 and 1998, voters were not impressed, and showed it by handing Congress back to the Democrats. This shock caused a massive civil war among the Republicans, and it contributed to the victory by Al Gore and Paul Wellstone in the 2000 elections, over the Republican John McCain / Colin Powell ticket. (Gore later Powell as Secretary of Defense and McCain to Secretary of Veterans Affairs, which at the time enraged plenty of Democrats but would ultimately be seen as a good move.) Politically, the failure of the GOP's "Contract with America" and the election of the avowed-progressive Wellstone to the powerful position of Vice-President, in addition to Gore's own political positions, saw the United States drift somewhat to the left through the 2000s.
US railroads found the boom of the 1990s to be mostly to their benefit, but by the mid 1990s, it was clear that prosperity was bringing its own sets of problems. Some of them, such as Conrail's lack of terminal space in the New York area, were fairly subtle and could be worked around. Others, such as Burlington Northern's traffic congestion in its Pacific Northwest routes that ultimately resulted in the rebuilding of their line over Stampede Pass in 1994-96, were quite obvious. With plans for high-speed lines causing additional potential problems for traffic congestion, it was clear that the railroads had to plan ahead to handle the traffic problems, and this was done by expansion of the capacity on the railroads. The first four-track mainline west of the Mississippi opened in 1996 in Nebraska on the Union Pacific, while other railroads re-opened whole mainlines. Erie Lackawanna added new bridges next to its Starrucca and Tunkhannock viaducts to aid traffic flow, while Conrail rebuilt several tunnels and lines, and undertook one of the largest construction projects in modern times to add to its freight ability in New York, building a massive bridge across Long Island Sound and running lines to a new terminal on the South side of Long Island. (Years later, this same route would be used to re-route Acela Express trains through Brooklyn.) By the late 1990s, mainline US railroads saw such features as concrete ties, heavy-gauge rail, cab signals and centralized traffic control as de rigeur. These refinements, along with more-powerful locomotives (both diesel and electric) helped this along as well, allowing faster acceleration and higher speeds, even with the massive unit trains for coal, grain, iron ore, bauxite and containers, some of which can be two miles long and weigh as much as 10,000 tons. In some cases, additional capacity was brought out by moving trains faster, with 60 mph speeds becoming fairly common on Union Pacific and Santa Fe trains in the Midwest, with the speed record going to the Denver and Rio Grande Western, which began regularly running 70 mph trains on its routes in 1996, which at first was not done with container trains until Moffat Tunnel was clearanced to allow double-stack trains, which was completed in 1999. That same year the railroad electrified its mainline between Denver and Salt Lake City, aiming to reduce its fuel costs from its "fast freight" services.
The energy shock of the early 1990s, if anything, was a short-term pain for most companies but a long-term gain. Railroads marketed their services on the ability to move loads more energy-efficiently than trucks, and as such do so more cheaply. Despite falling oil prices in the 1990s, the cheaper costs gave way to better efficiency being a reason to ship by rail, particularly with the advent of containers and the large system of agreements between railroads and trucking firms.
In this environment, innovators abounded. While most of these people worked for the railroads themselves, there was a few exceptions. The most notable of these was Eugene Garfield, who had founded the Auto Train Corporation in 1971. The company's main service was to bring passengers and their cars on one train, allowing for peopel to bring their cars on vacations. The service proved a big hit wth travelers, and by 1980, the service had expanded from its first route, which ran from Lorton, Virginia, to Sanford, Florida, to several others. Auto Train had kept up with Amtrak's improvements in service, with a 49% share in the service bought by comglomerate Berkshire Hathaway in 1988. The purchase provided all of the capital the company needed, allowing several expansions in the late 1980s, including new terminals in Jersey City, NJ, Joliet, IL, Denver, CO and Phoenix, AZ. After the NAFTA deal, Auto Train moved into Canada, beginning regular "Snowbird" services from a terminal in Pickering, Ontario, to its terminals in Phoenix and Sanford. The company proved to be one of the biggest success stories of the modern American railroad industry, and it introduced Berkshire Hathaway (and its legendary investment manager, Warren Buffett) into American railroading. That was to have a big implication in the decades to come. The company made a huge investment in 1996 in its first all-new trainsets, being the first order of General Electric's new twin-engine diesel, the AC100CW.
Picture from an advertisement for Auto-Train Corporation trains, circa 1980
While Freight traffic was booming, Amtrak had a new challenge. After the opening of the Acela Express in 1995, Amtrak became innundated with requests to build similar systems across America. In response to this, Amtrak developed a plan showing corridors that could be profitable for high-speed train development, presenting the plan to Congress in 1997. The plan proposed extending the Northeast Corridor north to Portland, Maine, and south to Richmond and Norfolk, Virginia as a first step, as well as the building of a line shadowing the New York Central's Water Level Route, running north from New York to Albany and Montreal, before running west to Buffalo, and again over the border to Toronto. Midwestern HSR service would be set up using a hub centered on Chicago, with lines spreading out from there like wheel spokes - Green Bay, Minneapolis/St. Paul, Des Moines, St. Louis, Indianapolis, Cleveland and Detroit were envisioned as destinations. A system would run from the NE Corridor at Richmond to connect several southern cities, all the way to New Orleans, while a line south from Atlanta would run to Miami via Savannah, Jacksonville and Orlando. A Triangle in Texas centered on the major cities of Houston, Dallas and San Antonio also had branches to New Orleans, Oklahoma City, Memphis, El Paso and Brownsville. A Portland-Olympia-Tacoma-Seattle-Vancouver route was envisioned for the Pacific Northwest, while a Calfornia HSR was also proposed connecting San Francisco, Oakland and Sacramento in the north with Los Angeles and San Diego in the south, with a line from Los Angeles to Las Vegas also proposed.
Amtrak's huge plans were admittedly costly, and one of the significant problems was politics. Most of Amtrak's major backers were in the Northeast and Midwest, so plans focused there were up for building first - which particularly aggravated HSR supporters in California and the Pacific Northwest. The Republican congress rejected many of the ideas, and while the Democrats re-taking Congress in 1998 helped this somewhat, it did not end concerns about the cost.
Amtrak sought to relieve this by proposing using specially-designed trains running on the freight lines, installing cab signals and building route improvements along rail lines used for the faster trains. This would allow speeds to go up to 125 mph on tracks used by freight lines, and while the lines were older routings in most cases, most included modern technology and high-grade tracks, owing to the frequent, heavy freight trains that operated on many of those lines. These plans made much more sense, and the development of Bombardier's JetTrain 2 in 2001 made things look good for these proposals.
On September 11, 2001, however, Amtrak got a chance to prove itself in the aftermath of a horrible tragedy. The September 11 attacks caused America's airspace to be shut down, which forced a massive demand for train travel. Amtrak and passenger services by the freight railroads answered the call, with Amtrak hurriedly dragging hundreds of pieces of equipment out of retirement and the freight railroads doing their best to route freight traffic to allow Amtrak to have its bigger trains and more frequent service. A historical note to this was the last passenger train to be pulled a GG1 as one of these - Amtrak had retired its GG1s in 1987, but Conrail still had a number of them on the roster, and as they were capable of 90 mph with freight gearing, they got the call to help Amtrak and pull passengers one more time. The immediate time after 9/11 saw acts of patriotism and sacrifice to help others that wowed Americans and the world, and the railways did their level best to assist this. Ten railroads provided Amtrak with motive power help, and Canada's GO Transit provided Amtrak with a number of its commuter train units to assist this as well, and dozens of private passenger cars were brought out for use if needed. Amtrak's ridership in the two weeks after 9/11 were its busiest ever, with the highest number of passengers riding the rails since the 1950s.
Amtrak's work paid off in spectactular fashion. When the Gore Administration bailed out airlines in October 2001, Congress dropped in a huge, $11.7 Billion appropriation for Amtrak, wanting to see its 125 mph trains become a regular reality. Amtrak had little trouble negotiating with the freight carriers, in many cases Amtrak offered to share profits on lines. The first of the 125 mph trains in the Midwest went into operation in March 2003 between Chicago and Detroit, and by the summer of 2005 the services were running and running well across much of the Midwest, but there was bigger things to come.
A JetTrain test locomotive rests at Townawanda, New York, in February 2002
Adding to this, when Arnold Schwarzenegger was elected governor of California in 2003, one of his campaign promises was to get a true high-speed rail system built in California. He found a willing partner in Southern Pacific Lines, which while financially somewhat troubled was able to provide expertise and capital to the project. Schwarzenegger asked for, and got, an appropriation from Congress in 2004 to help the planning stages, and the route was selected in late 2005. In the 2006 state elections, California voters approved the issue of $16.5 Billion in bonds to build the California HSR, and Southern Pacific began the building of required infrastructure within days of the approval. The first section of the line from Los Angeles to San Francisco was completed in September 2009, and after extensive tests, opened for business on July 10, 2010, though the first trains for VIPs and the media ran on July 4. The California HSR proved to be a financial success and also a success in removing traffic from highways and airlines in California, and by early 2011 the trains themselves were regularly seeing 225 mph speeds in California's Central Valley, making them by some margin the fastest trains to run on American soil. Many of the projects also smoothed freight traffic, which proved to be highly beneficial to Southern Pacific's efforts to compete with the Santa Fe and Union Pacific in California.
The High Speed Deck of Los Angeles Union Passenger Terminal in October 2010, shortly after the opening of the California High Speed Rail service
California's success was a good omen. Texas had been working on HSR plans for years, having the first such attempt killed by opposition in 1994. After 9/11, however, the plan was brushed off, and the Texas TGV consortium confirmed in 2002 that they were still interested. The costs in Texas were far less than in California, and unlike in the 1990s proposals, public money was available here, and several airlines, including Pan Am, got involved in the project. The 2004 election saw a referendum set up to approve or deny the project, and despite opponents calling it a waste of money and "antiquated technology", the plan was approved with 65% of voters in favor of it. The line began construction in early 2005, and was completed in March 2008, with regular service beginning in February 2009. In contrast to the opponents' view that the trains would be a waste, Texas Governor Rick Perry would comment later that it was "the best money Texas ever spent on its transportation system." The system, as with the trains in the Midwest and Northeast, were almost always full.
A leased SNCF TGV Duplex charges downhill near College Station, Texas, during testing in June 2008
Texas' HSR shared much with the California and Northeast systems, including the same track gauge, clearances and electrification equipment, but all three used different trains. Texas' system used units almost identical to the TGV's Duplex units, though with 16 passenger cars (as opposed to the 8 used on European trains) and more powerful engines to compensate for the heavier trains. Seating 1,090 passengers, the Texas trains had more capacity than the Acela (965 passengers) and the California HSR trains (900 passengers). All were far bigger than the Amtrak JetTrains, which could seat 445 passengers in 10 passenger cars. All of the fast trains proved to be money-makers for their owners, helped along by their comfort and the growing security concerns after 9/11, which made rail travel more desirable again. The result was that North American rail passenger usage soared nearly 300% between 2000 and 2010, and much of that growth was because of the fast movers.