Date of Award

1992

Document Type

Thesis

Degree Name

Master of Business Administration

Department

Business

First Advisor

Daniel W. Kemper

Second Advisor

Jan Kniffen

Third Advisor

Patrick Akers

Abstract

This thesis focuses on the hypothetical question: Would American railroads meet their obligation to provide freight service at reasonable cost if no regulation restrictions were imposed?

Railroads were originally regarded as great industrial giants spearheading the development of this country . Wild West movies depicted men driving a golden spike where the railroad from the West met the railroad from the East. This was pictured as a very exciting and romantic time in our history.

However, there were too many abuses. In 1887, the Congress decided to control special rates, the pass system, rebates and discrimination, and passed into law an act to regulate interstate commerce. Since that time, many laws were passed to protect the public from the railroads' monopolistic power. Admittedly, many of these laws were too restrictive and railroads would suffer hard times during the various enforcement periods.

In 1980, almost 100 years later, Congress decided that all the railroad "robber barons" were gone and that the railroad industry should be deregulated by passing of the Staggers Rail Act of 1980 .

The purpose of this study is to determine if it is essential that railroads be regulated in order to ensure public protection from economic manipulation. The railroads' economic survival is also an issue. Specifically, it is hypothesized that railroads should have the same freedom to set prices and conduct business in other ways without regulation the same as any other American industry acting in the best interest of the overall economy.

My research was compiled from historical data. The results of the study show the public suffering overwhelming abuses in the history of railroads. Also, economic problems for highly leveraged railroads are highlighted. The conclusions are that regulating the amount a railroad can charge for its services, assuring the public open access to competing railroads and reinvestment criteria are all necessary to ensure the protection of the public .

Creative Commons License

Creative Commons Attribution-NonCommercial 4.0 International License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

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