What exactly is Amtrak?
I originally asked this question in a thread about the creation of zip codes when I saw this response (great answer thanks to /u/davratta !)
... After 1963, the Postal Service canceled or allowed to lapse, all of its Mail contracts with the railroad companies. Railroads had been losing money on passenger trains, since 1925, but these loses were mitigated by the revenue they got from moving mail and express (small packages) traffic. The Railroad Express Agency was facing serious problems during the 1960s as UPS and the Post Office's own Parcel Post service cut deeply into its revenues.
With the zip code system and the cancellation of most Mail contracts, the final prop that was supporting the money losing passenger trains in the United States was kicked away. That led to a sharp increase in passenger train cancellations during the late 1960s and the creation of Amtrak in 1971.
I'm immediately struck by the fact that a train company is created in the face of lack of demand for trains. I've learned since asking this question initially that that it's owned by the government, but why the hell would the government choose to do something so daft? All cliche^'s aside.
Also, how did/does it differ from its competitors?
How did it come into existence, and by the will of whom?
And were there other companies vying with Amtrak to do what it did?
Thanks as always to everyone who comments here in order to enlighten the rest of us!
Amtrak was created by Congress (with the approval of President Nixon) as an amalgamation of existing privately controlled rail lines by the federal government in order to guarantee the continued existence of passenger rail service at a time when the railway industry was struggling. The plan was to take existing private inter-city and inter-state rail lines and integrate them into the new publicly-funded entity. The Federal Government did not want to take the backlash that would stem from the disappearance of passenger rail travel in the United States.
Twenty of the twenty-six existing interstate railway carriers chose to join Amtrak at its inception in 1971, and new lines and routes would be added through the 1970's. The existing northeastern railways managed by the bankrupted Penn Central Transportation Company, for example, were at first transferred by Congress to an ad-hoc public company called Conrail to guarantee continued operations of commuter rail service, while long-distance routes were transferred to Amtrak. The public entities MBTA, Metro-North, NJT and SEPTA were later created to manage local commuter railway networks and took the place of Conrail.
Today, Amtrak is the only nationwide passenger rail carrier. The six companies who did not opt to join Amtrak in 1971 were Southern Railway (joined Amtrak in 1979), Reading Company (discontinued service in 1983), Georgia Railroad (discontinued service in 1983), Rio Grande Railway (integrated into Amtrak in 1983), Chicago South Shore & South bend Railroad (converted to a public entity commuter rail service in 1989), and Chicago Rock Island and Pacific Railroad (discontinued service in 1978).
The main difference between Amtrak and its competitors was in part its size and nationwide scope allowing it to hedge losses in less-traveled routes with revenues from profitable routes, but mostly the fact that it received government funding to keep it afloat in a difficult climate for railway travel. How much federal funding Amtrak should receive is still a debatable topic, as is the role of rail travel in the United States. There have been a few schemes over the years to again privatize rail travel in the United States, although no plan was ever implemented.