WATCHING WASHINGTON, RAILWAY AGE FEBRUARY 2025 ISSUE: If you’re unaware that President Jimmy Carter, who died Dec. 29 at age 100, was instrumental in preserving private-sector railroading, blame it on your youth, as Carter was in the White House 1977-1981.
The Naval Academy grad and submarine officer who became a Georgia peanut farmer before pivoting, in his incongruous career, to politics, accomplished for railroads what Presidents beginning with Eisenhower sought but failed to deliver—partial economic deregulation. Carter’s signing into law the 1980 Staggers Rail Act reversed a near century of strict and stricter economic regulation and saved from Treasury-draining nationalization financially failed and failing railroads in the Northeast and Midwest. He ended for railroads an era the locust hath eaten.
Equally significant was Carter’s pick of free-market-devoted rail regulators to superintend the transformation from rigid legislative legalize to consequences—renewal of deteriorating rail plant and equipment, restoration of reliable rail service and achievement of rail revenue adequacy. Said Carter in a 1979 message to Congress:
“We must eliminate the outmoded rules that have prevented railroads from managing their operation efficiently, responding to competitive opportunities and utilizing equipment profitably. We must allow the industry the flexibility to set rates at levels that generate a fair return on the investment and that attract traffic lost to unregulated modes.”
While Rep. Jim Florio (D-N.J.) successfully quarterbacked the rail economic deregulation effort through captive shipper-generated House hostility—the Senate less problematic—it was Carter’s Department of Transportation that produced the initial drafts, and Carter who personally brokered a legislative compromise sealing success while locking in a safety net for captive shippers.
Carter’s first Transportation Secretary, former Rep. Brock Adams (D-Wash.), had carried an early economic deregulation torch through Congress. His successor, Neil Goldschmidt, related presenting Carter a list of 14 transportation priorities, at the top of which Carter penciled “railroad deregulation.”
Upon signing the Staggers Rail Act into law Oct. 14, 1980, Carter said:
“By stripping away needless and costly regulation in favor of marketplace forces wherever possible, this Act will help assure a strong and healthy future for our nation’s railroads and the men and women who work for them. It will benefit shippers throughout the country by encouraging railroads to improve their equipment and better tailor their service to
shipper needs.”
Ahead of the legislation’s passage, Carter selected free-market advocates Darius Gaskins and Marcus Alexis, both economists, and financial analyst Thomas Trantum for seats on Surface Transportation Board predecessor Interstate Commerce Commission (ICC). Said Chairperson Gaskins, “Salvation for shippers and carriers alike lies in the marketplace, not in the halls of the ICC.”
Alexis was the ICC’s first African American—92 years after the agency’s creation, 15 years after the first female and seven years following the first Latino. For Carter, a product of the Jim Crow South, the choice illuminated his content of character and commitment to diversity, equity and inclusion.
Sen. Ted Kennedy (D-Mass.) painted Carter the most conservative Democratic President since Grover Cleveland—a remarkable juxtaposition as Cleveland in 1887 signed into law the Interstate Commerce Act that Carter’s signature significantly shredded.
Carter was no stranger to Adam Smith’s “invisible hand” or Ayn Rand’s “Atlas Shrugged.” He told Congress in 1979, “America has the greatest economic system in the world. Let’s reduce government interference and give it a chance to work.” In addition to partial railroad economic deregulation, Carter signed into law economic deregulation of airlines, motor carriers, natural gas and telecommunications.
Convinced of railroads’ essentiality to homeland security, he created Emergency Boards in 1978 and 1979 to end strikes and achieve peaceful resolution of labor grievances.
Carter’s commitment to the free flow of commerce once bedeviled railroads, which in 1976 joined with environmentalists to halt construction on the Tennessee River of the Tellico Dam, citing impact on an endangered two-inch fish, the snail darter. The railroad gripe was federally subsidized competition from unregulated barges. In 1979, Carter signed legislation exempting construction from the Endangered Species Act.
No President had on railroads so profound an impact as Jimmy Carter.
