Staggers Rail Act of 1980

Christopher Zorn

Railroads were among the very first industries to be regulated in the United States. The Interstate Commerce Act of 1887, which regulated shipping rates and prevented price discrimination by interstate carriers, was principally intended to prevent railroads from taking advantage of their near-monopoly over transportation. Over the next hundred years, with the development of oil pipelines, interstate highways, and effective air travel, the railroads' control over transportation of goods and people decreased. By the 1970s the combination of competition and close regulation of rail rates drove many railroads to the brink of bankruptcy.

In 1980 Congress passed sweeping reforms to railroad regulations. Named for Congressman Harley Staggers, Democrat of West Virginia, the Staggers Rail Act (P. L. 96-448) was signed into law by President Jimmy Carter on October 14, 1980. Among other things, the act removed most government controls over prices, instead allowing railroads to set their own rates according to what the market would allow. The act also allowed railroads to enter into contracts with shipping companies, and gave railroads greater freedom to adopt other cost-cutting measures such as abandoning unprofitable routes and merging with other companies.

The Staggers Rail Act was part of a larger move toward deregulation in the transportation industry which included the Airline Deregulation Act of 1978 and the Motor Carrier Act of 1980. While there is disagreement over the precise magnitude of its effect, the Staggers Rail Act is generally credited with revitalizing the railroad industry, and with leading to lower rates for railroad shipping in general. However, the act also led to substantial decreases in employment in the railroad industry, as many railroads merged with their former competitors; between 1978 and 1994, the number of major railroad firms operating in the United States fell from forty-one to twelve. As a result, some companies (particularly shippers of such low-cost commodities as coal and grain) found rates to be higher under deregulation than they were prior to the act. These companies have continued to address market failures under deregulation.

See also: Interstate Commerce Act of 1887; Rail Passenger Service Act.

BIBLIOGRAPHY

American Association of Railroads. Railroad Facts. Washington, DC: Office of Information and Public Affairs, Association of American Railroads, various years.

Dooley, Frank J., and William E. Thoms. Railroad Law a Decade after Deregulation. Westport, CT: Greenwood, 1994.

STAGGERS RAIL ACT

STAGGERS RAIL ACT of 1980 (49 U.S.C., Public Law 94-473) was intended to remedy the serious financial troubles experienced by major American railroads during the 1960s and 1970s. The completion of the U.S. interstate highway system in the 1950s increased the use of truck transportation, air transport siphoned off passenger and mail businesses, and pipelines diverted the transportation of petroleum products. The Staggers Rail Act deregulated the railroad industry in the belief that competition should determine freight rates. By restricting the powers and involvement of the Interstate Commerce Commission in determining rates, Congress intended that deregulation would enable the railways to earn adequate revenues.

BIBLIOGRAPHY

Dooley, Frank J., and William E. Thoms. Railroad Law a Decade after Deregulation. Westport, Conn.: Quorum Books, 1994.

Himmelberg, Robert F., ed. Regulatory Issues since 1964: The Rise of the Deregulation Movement. New York: Garland, 1994.

R. BlakeBrown

See alsoDeregulation .