Why were American railroad companies so financially unstable? I don't think you can blame the rise of the automobile for this, most of these happened prior to the mass adoption of the automobile and automobile infrastructure
Chicago have average söyboyhttps://simple.wikipedia.org/wiki/User:TDKR_Chicago_101
>>18755723It's the nature of boom and bust cycles. Lots of speculative capital goes in, only a few firms survive and make a killing. Meanwhile the standard of living for everyone goes up.
>>18755760How come later automobile companies ended up more financially sound? And how come this boom-bust culture wasn't as prominent in the world of Ocean Liners? Ocean Liners in particular feel like the opposite of railroad companies because it seemed like they could just take financial losses and fucked up multiple times and still somehow survive.
>>18755778>How come later automobile companies ended up more financially sound?They didn't. Most went bankrupt, just like the railroads. And auto companies perform much worse than railroads as mature companies.
>>18755788>And auto companies perform much worse than railroads as mature companies.Gonna have to call bullshit on this on chief, because pretty much every single railroad company is now nationalized while auto makers like Toyota and General Motors are among the largest companies in the world (Toyota in particular is the largest company in Japan in fact)
>>18755792
>>18755796>>18755792https://en.wikipedia.org/wiki/List_of_defunct_automobile_manufacturers_of_the_United_StatesYou're braindead.
>>18755796>>18755800This is a dishonest comparison. Companies like Union Pacific don't manufacture their own rolling stock like they used to. A more apt comparison would be Tesla vs GE Transportation
Even still, companies like GE Transportation have been chopped up and sold to hell and back. They are absolutely not performing better than auto manufacturers lmao. Freight services like Union Pacific are successful in their own right because freight is a fairly stable sector to get into but they also don't have the same operating expenses as actual manufacturers do, hence the higher relative ROE.
>>18755809>This is a dishonest comparison.You're the one who said automobile companies perform better than railroads. The data doesn't support that. >Companies like Union Pacific don't manufacture their own rolling stock like they used to.Great, who cares? UNP still is a much better company than GM is. GM had to get bailed out by ONigger and Biden just 15 years ago. I guess you're not old enough to remember that. Just take the L.
>>18755824I'm glad I don't suffer from autism like you do, good luck with that I guess
>>18755826Oh and by the by, the parent company of GE Transportation has better ROEs than Ferd and Gay-M. And no one considers that a railroad company, you're simply totally unfamiliar with the field of finance. Which is fine, but don't start mouthing off like you have a brain. It's unbecoming.
>>18755723They just built too much, even in places where there was nothing to transport.
>>18756472This, people were absolute retards when it came to investing in railroads, even in Britain.
>>18755792>Toyota and General Motors are among the largest companies in the world (Toyota in particular is the largest company in Japan in fact)Extreme government support and backing.
>>18755757Also autistic subhumanhttps://en.wikipedia.org/wiki/User:Pppery
>>18755778>How come later automobile companies ended up more financially sound?The federal government had and has a keen interest in subsidizing all their fuckups. The train didn't get all its railroads laid and perpetually maintained on the taxpayer's dime, did it?
>>18755723Railroads were some of the most popular speculative stocks back in their hayday. Combining massive speculation with the retarded idea that a ton of small competitive railroad firms that all own just various lengths of connected railway makes for a retarded unsustainable system.Railroads function as a public good, and cannot beat the free-rider problem, so markets cannot function as a proper way to operate them.>Tldr capitalism doesn't function well with public goods, hence why the US has always fucking sucked with rail systems. They've only been able to succeed in countries that treat them as a national product, not a market product.
Rail ways in other countries aren't "stable" they're financial drains on the system but are either nationalized or heavily subsidized by the state, so the fact that they are unprofitable doesn't matter.
>>18755723all railroad companies were pretty unprofitable. Even the British ones where they invented them. They did leave the infrastructure behind that revolutionised entire economies, but for the original investors it was all paid for with speculative investment schemes that bankrupted a lot of people. The shorter a railroad is the better chance it had at being profitable, and there were a couple, but the initial cost of laying track and upkeep vs the price of a individual train ticket in the 19th century was just absurdly different. In the UK investors would spend like £30,000 to £50,000 on laying track and the average train ticket for one passenger would be like £0.70+ Even if you have thousands and thousands of riders a year, it just doesn't put you in the black. The panama railroad is an interesting example of profitable railroad since it's a tiny track but it's a bottleneck to get to California before the panama canal was built, so it was impossible to avoid. So the people who ran it could charge like $25 to ride and since the track was about 50 miles they made a ton of money on it.
>>18756588Discuck toohttps://en.wikipedia.org/wiki/User:Chaotic_Enby
As others have mentioned, railroads have always been wildly speculative, notorious in the 19th century for gulling investors, watering stock, collaborating with crooked government officials, not unlike modern day tech bubbles. Things stabilized somewhat in the early 20th century but the depression broke a lot of lines along with everything else. After postwar prosperity there was another wave of bankruptcies in the 60s and 70s, mostly due to competition from highways and airlines. Street railways followed a similar pattern of speculation and worthless stock and when they started to fail the public had little sympathy.
>>18755800>Irrelevant Nobody Motor Car CompanyMost of these only built a handful of cars.
A railroad = rolling stock + hundreds of miles of rail network + hundreds of miles of telegraph cable if this was back in the 19th century. Rail and cable networks require constant upkeep. Rolling stock also requires regular maintenance, and most locomotives were only in service for a decade at most because it ended up being cheaper to buy new rolling stock at that point etcContrast this with auto makers. They make cars and that's it. Road infrastructure is outsourced to taxpayers (this isn't a bad thing by the way, road infrastructure is also for bicycle and pedestrian traffic) and maintenance is also out of customers own expenses.
>>18755778It's common in air travel. Automobile companies churn out cars granularly and arent responsible for maintaining massive fleets and stations/airports.Also doesnt maritime trade have this problem? And thats why every tanker is registered as its own company
