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Private passenger service
In 1916, 98% of all commercial intercity travelers in the United States moved by rail, and the remaining 2% moved by inland waterways. Nearly 42 million passengers used railways as primary transportation. Passenger trains were owned and operated by the same privately owned companies that operated freight trains. As the 20th century progressed, patronage declined in the face of competition from buses, air travel, and the automobile. New streamlined diesel-powered trains such as the Pioneer Zephyr were popular with the traveling public but could not reverse the trend. By 1940 railroads held just 67 percent of commercial passenger-miles in the United States. In real terms, passenger-miles had fallen by 40% since 1916, from 42 billion to 25 billion.
Traffic surged during World War II, which was aided by troop movement and gasoline rationing. The railroad's market share surged to 74% in 1945, with a massive 94 billion passenger-miles. After the war, railroads rejuvenated their overworked and neglected passenger fleets with fast and luxurious streamliners. These new trains brought only temporary relief to the overall decline. Even as postwar travel exploded, passenger travel percentages of the overall market share fell to 46% by 1950, and then 32% by 1957. The railroads had lost money on passenger service since the Great Depression, but deficits reached $723 million in 1957. For many railroads, these losses threatened financial viability.
The causes of this decline were heavily debated. The National Highway System and airports, both funded by the government, competed directly with the railroads, who paid for their own infrastructure. Progressive Era rate regulation limited the railroad's ability to turn a profit. Railroads also faced antiquated work rules and inflexible relationships with trade unions. To take one example, workers continued to receive a day's pay for 100-to-150-mile (160 to 240 km) work days. Streamliners covered that in two hours.
Matters approached a crisis in the 1960s. Passenger service route-miles fell from 107,000 miles (172,000 km) in 1958 to 49,000 miles (79,000 km) in 1970, the last full year of private operation. The diversion of most U.S. Postal Service mail from passenger trains to trucks, airplanes, and freight trains in late 1967 deprived those trains of badly needed revenue. In direct response, the Atchison, Topeka and Santa Fe Railway filed to discontinue 33 of its remaining 39 trains, ending almost all passenger service on one of the largest railroads in the country. The equipment the railroads had ordered after World War II was now 20 years old, worn out, and in need of replacement.
As passenger service declined various proposals were brought forward to rescue it. The 1961 Doyle Report proposed that the private railroads pool their services into a single body. Similar proposals were made in 1965 and 1968, but failed to attract support. The federal government passed the High Speed Ground Transportation Act of 1965 to fund pilot programs in the Northeast Corridor, but this did nothing to address passenger deficits. In late 1969 multiple proposals emerged in Congress, including equipment subsidies, route subsidies, and, lastly, a "quasi-public corporation" to take over the operation of intercity passenger trains. Matters were brought to a head on March 5, 1970, when the Penn Central, the largest railroad in the Northeast United States and teetering on bankruptcy, filed to discontinue 34 of its passenger trains.
In October 1970, Congress passed, and President Richard Nixon signed into law, the Rail Passenger Service Act. Proponents of the bill, led by the National Association of Railroad Passengers (NARP), sought government funding to ensure the continuation of passenger trains. They conceived the National Railroad Passenger Corporation (NRPC), a private entity that would receive taxpayer funding and assume operation of intercity passenger trains. The original working brand name for NRPC was Railpax, but shortly before the company started operating it was changed to Amtrak. There were several key provisions:
- Any railroad operating intercity passenger service could contract with the NRPC, thereby joining the national system.
- Participating railroads bought into the NRPC using a formula based on their recent intercity passenger losses. The purchase price could be satisfied either by cash or rolling stock; in exchange, the railroads received NRPC common stock.
- Any participating railroad was freed of the obligation to operate intercity passenger service after May 1, 1971, except for those services chosen by the Department of Transportation (DOT) as part of a "basic system" of service and paid for by NRPC using its federal funds.
- Railroads that chose not to join the NRPC system were required to continue operating their existing passenger service until 1975 and thenceforth had to pursue the customary ICC approval process for any discontinuance or alteration to the service.
Of the 26 railroads still offering intercity passenger service in 1970, only six declined to join Amtrak. Nearly everyone involved expected the experiment to be short-lived. The Nixon administration and many Washington insiders viewed the NRPC as a politically expedient way for the President and Congress to give passenger trains a "last hurrah" as demanded by the public. They expected Amtrak to quietly disappear as public interest waned. After Fortune magazine exposed the manufactured mismanagement in 1974, Louis W. Menk, chairman of the Burlington Northern Railroad, remarked that the story was undermining the scheme to dismantle Amtrak. Proponents also hoped that government intervention would be brief, but their view was that Amtrak would soon support itself. Neither view has proved correct. Popular support has allowed Amtrak to continue in operation longer than critics imagined, while financial results have made a return to private operation infeasible.
1970s: The Rainbow Era
Amtrak began operations on May 1, 1971. Amtrak received no rail tracks or rights-of-way at its inception. All Amtrak's routes were continuations of prior service, although Amtrak pruned about half the passenger rail network. Of the 366 trains operated previously, Amtrak only continued 184. On trains that continued, to the extent possible, schedules were retained with only minor changes from the Official Guide of the Railways, and under the same names. Several major corridors became freight-only, including the ex-New York Central Railroad's Water Level Route across New York and Ohio and Grand Trunk Western Railroad's Chicago to Detroit route. Reduced passenger train schedules created headaches. A 19-hour layover became necessary for eastbound travel on the James Whitcomb Riley between Chicago and Newport News.
Amtrak inherited problems with train stations, most notably deferred maintenance, and redundant facilities resulting from competing companies that served the same areas. On the day it started, Amtrak was given the responsibility of rerouting passenger trains from the seven train terminals in Chicago (LaSalle, Dearborn, Grand Central, Randolph, Chicago Northwestern Terminal, Central, and Union) into just one, Union Station. In New York City, Amtrak had to pay to maintain both Penn Station and Grand Central Terminal because of the lack of track connections to bring trains from upstate New York into Penn Station, a problem not rectified until the building of the Empire Connection in 1991. Amtrak would abandon numerous large stations whose upkeep could no longer be justified. On the other hand, the creation of the Los Angeles–Seattle Coast Starlight from three formerly separate trains was an immediate success, requiring an increase to daily service by 1973.
Needing to run only half the trains that had been run by the private railroads, Amtrak originally picked around 1,200 of the best passenger cars to lease from the 3,000 that the private railroads had owned. All were air-conditioned, and 90% were easy-to-maintain stainless steel. When Amtrak took over, passenger cars and locomotives initially retained the paint schemes and logos of their former owners, which resulted in Amtrak running trains with mismatched colors - the "Rainbow Era". In mid-1971, Amtrak began purchasing some of the equipment it had leased, including 286 EMD E and F unit diesel locomotives, 30 GG1 electric locomotives and 1,290 passenger cars. By 1975, the official Amtrak color scheme was painted on most Amtrak equipment and newly purchased locomotives and rolling stock began appearing.
Amtrak soon had the opportunity to acquire rights-of-way. Following the bankruptcy of several northeastern railroads in the early 1970s, including Penn Central, which owned and operated the Northeast Corridor (NEC), Congress passed the Railroad Revitalization and Regulatory Reform Act of 1976. A large part of the legislation was directed to the creation of Conrail, but the law also enabled the transfer of the portions of the NEC not already owned by state authorities to Amtrak. Amtrak acquired the majority of the NEC on April 1, 1976. (The portion in Massachusetts is owned by the Commonwealth and managed by Amtrak. The route from New Haven to New Rochelle is owned by the Metropolitan Transportation Authority and the Connecticut Department of Transportation as the New Haven Line.) This main line became Amtrak's "jewel" asset, and helped the railroad generate revenue. While the NEC ridership and revenues were higher than any other segment of the system, the cost of operating and maintaining the corridor proved to be overwhelming. As a result, Amtrak's federal subsidy was increased dramatically. In subsequent years, other short route segments not needed for freight operations were transferred to Amtrak.
In its first decade, Amtrak fell far short of financial independence, which continues today, but it did find modest success rebuilding trade. Outside factors discouraged competing transport, such as fuel shortages which increased costs of automobile and airline travel, and strikes which disrupted airline operations. Investments in Amtrak's track, equipment and information also made Amtrak more relevant to America's transportation needs. Amtrak's ridership increased from 16.6 million in 1972 to 21 million in 1981.
The 1980s and 1990s
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In 1982 former Secretary of the Navy and retired Southern Railway head William Graham Claytor Jr. came out of retirement to lead Amtrak. Despite frequent clashes with the Reagan administration over funding, Claytor enjoyed a good relationship with John H. Riley, the head of the Federal Railroad Administration (FRA), and with members of Congress. Limited funding led Claytor to use short-term debt to fund operations.
Building on mechanical developments in the 1970s, high speed Washington-New York Metroliner Service was improved with new equipment and faster schedules. Travel time between New York and Washington D.C was reduced to under 3 hours. According to the 1980 Amtrak Annual Report, a converted 12-car set saved the company approximately $250,000 a year in fuel, maintenance and yard support costs. Amtrak completed the head-end power conversion program in 1982. Demand for passenger rail service resulted in the creation of five new state-supported routes in California, Illinois, Missouri, Oregon and Pennsylvania, for a total of 15 state-supported routes across the nation.
Ridership stagnated at roughly 20 million passengers per year amid uncertain government aid from 1981 to about 2000. Thomas Downs succeeded Claytor in 1993. Amtrak's stated goal remained "operational self-sufficiency." By this time, however, Amtrak had a large overhang of debt from years of underfunding, and in the mid-1990s, Amtrak suffered through a serious cash crunch. Under Downs, Congress included a provision in the Taxpayer Relief Act of 1997 that resulted in Amtrak receiving a $2.3 billion tax refund that resolved their cash crisis. However, Congress also instituted a "glide-path" to financial self-sufficiency, excluding railroad retirement tax act payments.
George Warrington became president in 1998 with a mandate to make Amtrak financially self-sufficient. Passengers became "guests" and there were expansions into express freight work, but the financial plans failed. Amtrak's inroads in express freight delivery created additional friction with competing freight operators, including the trucking industry. Delivery was delayed of much anticipated high-speed trainsets for the improved Acela Express service, which promised to be a strong source of income and favorable publicity along the Northeast Corridor between Boston and Washington, D.C.
Growth in the 21st century
Ridership increased during the first decade of the 21st century after implementation of capital improvements in the NEC and rises in automobile fuel costs. The inauguration of the high-speed Acela Express in late 2000 generated considerable publicity and led to major ridership gains. However, through the late 1990s and very early 21st century, Amtrak could not add sufficient express freight revenue or cut sufficient other expenditures to break even. By 2002, it was clear that Amtrak could not achieve self-sufficiency, but Congress continued to authorize funding and released Amtrak from the requirement. In early 2002 David L. Gunn replaced Warrington as president. In a departure from his predecessors' promises to make Amtrak self-sufficient in the short term, Gunn argued that no form of passenger transportation in the United States is self-sufficient as the economy is currently structured. Highways, airports, and air traffic control all require large government expenditures to build and operate, coming from the Highway Trust Fund and Aviation Trust Fund paid for by user fees, highway fuel and road taxes, and, in the case of the General Fund, from general taxation. Gunn dropped most freight express business and worked to eliminate deferred maintenance.
A plan by the Bush administration "to privatize parts of the national passenger rail system and spin off other parts to partial state ownership" provoked disagreement within Amtrak's board of directors. Late in 2005 Gunn was fired. Gunn's replacement, Alexander Kummant (2006–08), was committed to operating a national rail network, and, like Gunn, opposed the notion of putting the Northeast Corridor under separate ownership. He said that shedding the system's long-distance routes would amount to selling national assets that are on par with national parks, and that Amtrak's abandonment of these routes would be irreversible. In late 2006, Amtrak unsuccessfully sought annual congressional funding of $1 billion for ten years. In early 2007, Amtrak employed 20,000 people in 46 states and served 25 million passengers a year, its highest amount since its founding in 1970. Politico noted a key problem: "the rail system chronically operates in the red. A pattern has emerged: Congress overrides cutbacks demanded by the White House and appropriates enough funds to keep Amtrak from plunging into insolvency. But, Amtrak advocates say, that is not enough to fix the system's woes." 
Joseph H. Boardman replaced Kummant as President and CEO in late 2008. In 2011, Amtrak announced its intention to build a small segment of a high-speed rail corridor from Penn Station in NYC, under the Hudson River in new tunnels, and double-tracking the line to Newark, NJ called the Gateway Project, estimated to cost $13.5 billion. After years of almost revolving-door CEOs at Amtrak, in December 2013, Boardman was named "Railroader of the Year" by Railway Age magazine, which noted that with over five years in the job, he is the second-longest serving head of Amtrak since it was formed more than 40 years ago.
From May 2011 to May 2012, Amtrak celebrated its 40th anniversary with festivities across the country that started on National Train Day (May 7, 2011). A commemorative book entitled Amtrak: An American Story was published, and a documentary was created. Six commemorative Heritage units a 40th Anniversary Exhibit Train toured the country. The Exhibit Train visited 45 communities and welcomed more than 85,000 visitors. It was an entirely rebuilt train powered by GE Genesis locomotives and included three refurbished ex-Santa Fe baggage cars and a food service car. Four Genesis locomotives were painted into retired Amtrak paint schemes: No. 156 was in Phase 1 colors, No. 66 was in Phase 2 colors, No. 145 and No. 822 were in Phase 3 colors (822 pulled the Exhibit train), and No. 184 was in Phase 4 colors. In 2014 Amtrak began offering a "residency" program for writers.
On December 9, 2015, Boardman announced in a letter to employees that he would be leaving Amtrak in September 2016. He had advised the Amtrak Board of Directors of his decision the previous week. On August 19, 2016, the Amtrak Board of Directors named former Norfolk Southern Railway President & CEO Charles "Wick" Moorman as Boardman's successor with an effective date of September 1, 2016. During his term, Moorman took no salary and said that he saw his role as one of a “transitional CEO” who would reorganize Amtrak before turning it over to new leadership.
In May and June 2017, following several service disruptions within Pennsylvania Station and the East River Tunnels, the train service announced an expedited schedule for maintenance and repairs of infrastructure, which involves the complete shutdown of multiple tracks at a time. Amtrak has faced criticism from commuters as well as politicians for these incidents, prompting responses from figures such as New Jersey governor Chris Christie and New York governor Andrew Cuomo. The repairs are expected to take place in Summer 2017, affecting the Long Island Rail Road and New Jersey Transit trains during all hours, who have planned additional or modified services.
In June 2017, it was announced that former Delta and Northwest Airlines CEO Richard Anderson would become Amtrak's next President & CEO.  Anderson began the job on July 12, assuming the title of President immediately and serving alongside Moorman as "co-CEOs" until the end of the year.