James Taggart Explaining the Railroad Unification Plan

[Dagny] "What is the Railroad Unification Plan ?"

[James] "It is a...a new national setup that went into effect three weeks ago [before Dagny's return to the 'outside'], which you will appreciate and approve of and find extremely practical." She marveled at the futility of his method: he was acting as if, by naming her opinion in advance, he would make her unable to alter it. "It is an emergency setup which has saved the country's transportation system."

"What is the plan?"

"You realize, of course, the insurmountable difficulties of any sort of construction job during this period of emergency. It is -- temporarily -- impossible to lay new track.  Therefore, the country's top problem is to preserve the transportation industry as a whole, to preserve its existing plant and all of its existing facilities.  The national survival requires--"

"What is the plan?"

"As a policy of national survival, the railroads of the country have been unified into a single team, pooling their resources. All of their gross revenue is turned over to the Railroad Pool Board in Washington, which acts as a trustee for the industry as a whole, and divides the total income among the various railroads, according to a...more modern principle of distribution."

"What principle?"

"Now don't worry, property rights have been fully preserved and protected, they've merely been given a new form. Every railroad retains independent responsibility for its own operations, its train schedules and the maintenance of its track and equipment.  As its contribution to the national pool, every railroad permits any other, when conditions so require, to use its track and facilities without charge.  At the end of the year, the Pool Board distributes the total gross income, and every individual railroad is paid, not on the haphazard, old-fashioned basis of the number of trains run or the tonnage of freight carried, but on the basis of its need -- that is, the preservation of its track being its main need, every individual railroad is paid according to the mileage of the track which it owns and maintains.