Railroads: Step to Nationalization

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Hope of Profits. Theoretically, the new rail corporation is supposed to earn a profit, like Comsat. Private railroaders consider this idea ludicrous, and predict that Railpax will be forced to turn to Congress for more subsidy within a year or two. Even if their freight operations are included, the much-admired nationalized railroads of Western Europe and Japan run deeply in the red. Railpax backers count on managerial innovations to entice more riders aboard trains. The average passenger may find conditions much the same for a considerable time. Railpax will pay the private railroads to operate its trains; they will run over the same bumpy tracks and be manned by the same surly crews that have made train travel a trauma instead of a treat.

* Under a separate law signed last week by President Nixon, federal authorities can spend $80 million this fiscal year and as much as $10 billion over the next twelve years for new and improved bus-and rail-transit systems in urban areas. The Government will pay up to two-thirds of project costs.

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