The story of the revival of American railroads from moribund bankruptcy to dazzling arteries of intermodal freight has been told in several books. My book, Main Lines (2003), tried to tell it through chronological storytelling. Rush Loving Jr. (The Men who Loved Trains, 2006) told it through key personalities (specifically at Penn Central and Conrail). Mark Rose, Bruce Seely, and Paul Barrett (The Best Transportation System in the World, 2006) told it in the framework of public policy. In this book, Robert E. Gallamore and John R. Meyer tell it through economic analysis. Meyer, who died in 2009, was a Harvard economist and one of the founding fathers of econometric history (The Economics of Slavery in the Antebellum South, with Alfred H. Conrad, in 1958). He began publishing in transportation economics in 1959 (The Economics of Competition in the Transportation Industries) and was a board member of the Union Pacific Railroad for many years. Gallamore was Meyer’s student at Harvard and a veteran of the railroad industry (Union Pacific) and academics (Kellogg School at Northwestern).

The story is not well known—if you ask most Americans, they will tell you that railroads are bankrupt, or went out with the horse and buggy, or will sigh and ask, “Why can’t we have trains like they do in Europe?” There are two separate stories to tell—one about passenger trains, the other about freight. Freight is by far the more important to the national economy, but the public and the media, to the extent they care at all, rarely get beyond the passenger. On the freight side, the rebirth of railroads from a low at the time of the Penn Central bankruptcy in 1970 (the largest in the nation’s history to that time), was fashioned by a trial-and-error, seat-of-the-pants experiment (the creation of Conrail) that defied standard paradigms of public sector versus private sector (or liberal versus conservative). It was an idea drafted into a congressional bill in the law department of the Union Pacific Railroad (which had no other vested interest beyond not wanting the entire railroad system in the northeastern quadrant of the United States to collapse). The law created not one but two part-private, part-public agencies to operate a new railroad eventually known as Conrail, with draconian power to reduce labor and eliminate little-used routes. This would require members of Congress who hoped to get re-elected to vote for something that would kill jobs and eliminate railroad service to many corners of their constituencies—a poison pill if there ever was one. This had to be a bipartisan effort. It had almost no leadership from the White House (except for Jimmy Carter’s critical intervention in the passage of the Staggers Act in 1980). The alternative was to nationalize the bankrupt mess and embalm all the problems that caused the bankruptcy inside the federal budget.

Meanwhile, Congress had to turn its attention to a growing and more general railroad problem extending beyond the Northeast. Technology had changed; for example, branches to serve grain elevators in every county in Iowa were no longer efficient. Trucks now brought grain longer distances to big rail terminals, where it was loaded on solid trains of grain (called unit trains) that barreled straight to the mammoth grain mills. But what would happen to every little Iowa town when it lost its railroad? Some major Midwestern carriers (the Rock Island and the Milwaukee Road) were in such disrepair that they had to be liquidated, but each served critical industries that would be bankrupted if railroad service ceased, so abandonment would cause severe pain to innocent parties. All this was guided by new legislation—the Railroad Revitalization and Reform Act of 1974 (4R Act), and then by the all-important Staggers Act of 1980, which removed virtually all rate regulation from the railroads and let market forces reallocate transportation services efficiently. Getting Congress on board took bipartisan earth moving, and even then it was far from certain that the railroads could make deregulation work. After years of living in the cocoon of regulation, had their competitive instincts atrophied? All this was supposed to wind up with an efficient transportation system serving happy customers operated by healthy, solvent private enterprise and without government subsidy. Talk about having one’s fingers crossed!

The funny thing was that it worked, and the United States now has a lean freight-railroad system that operates with such apparent seamlessness that neither the public nor the press pays much attention—they barely even know it is there or how vital it is to their daily lives.

The authors rightfully keep discussion about passenger services in separate chapters, one on the coming of Amtrak and one on the experience of Amtrak. (They do not talk about commuter services, which is a separate story.) I described the book as economic analysis, but such analysis appears here and there really as a supplement to understanding the narrative. It is sophisticated enough to be off-putting to armchair railroad buffs, but is a good mental exercise for those reasonably versed in industrial matters. On the other hand, it adds little to understanding the day-to-day hurdles of those in both the private and public sectors who brought this transformation about. Most of the book is a narrative of the restructuring and revitalization of a major industry that at about the time of the nation’s bicentennial was near death as a private enterprise. The book is mostly about policy, both public and corporate. There is little on technology. The reader will meet few actual human beings in this story, neither political figures, nor civil servants, nor railroad executives nor railroad customers. There is no sense of page-turning drama. For an economic treatise, there are remarkably few statistics. However, as a factoid that readers of this review might want to carry away, the unspoken point of the book is that American railroads in 2014 carried about three times the ton-miles of freight that they carried in the peak World War II year of 1944, on about half of the route-mileage with about one-tenth the employees. That’s efficient transportation—and getting there was a remarkable story.