When service declined, passengers and freight customers blamed the railroads, not the lawmakers or regulators. When customer numbers declined, service deteriorated further. The process was irreversible as long as the railroad industry was heavily regulated. The struggling railroad industry was unable to maneuver. In a free market, businesses expand or contract services based on where managers see profitable opportunities.
Nimble entrepreneurs move quickly to add or drop operations.
In their fight for survival in the 1940s and '50s, private railroads wanted to fall back on freight service and quickly scuttle many passenger runs because in America freight had traditionally subsidized passenger service. Railroad executives wanted to raise some prices and cut others, trying to find a new formula for success. But they were often blocked by the regulators. If allowed to concentrate on freight service, many roads that died in the postwar era would have had a better chance to survive. Rate deregulation and the freedom to concentrate on more profitable lines were surely the keys for ailing railroads.