Maybe they should have left the railroad in question in the hands of the Pennsylvania Railroad and New Haven Railroad companies, and removed the tangle of taxation and ICC regulation that they were strangling them with?
And the Federal government, should not have, in that same era, used a massive new government program to establish a condition - the Interstate highway system - that made for government sponsored competition against the private railroads, in both freight hauling and commuter trains, and was a boon to bus companies and those who made buses, as well as the truck-hauling industry and those who made trucks. Private toll roads could have done the job, and maybe the pace at which they could have done that, the routes available, and the tolls might have left more room for the railroad industry to adjust, improve and still be efficient and economical for passengers. We’ll never know; the option was not taken.
At the same time, in the major freight transportation and largest commuter market of New York City, two sets of huge new tunnels for roadways (not rail) were built and operated by a new government agency, one crossing the Hudson river between Manhattan and New Jersey, and the other crossing the East River between Manhattan and Queens - actions which were part of the changes that helped put the New York metropolitan commuter train lines into bankruptcy; with ICC and Union shackles still in place, and motor vehicles given brand new government provided options.
It must be hit home all the time - whenever the government intervenes in the market place, it gives with one hand and takes away with the other.
Now, a half century later, the state governments of New York and New Jersey are looking at large new train tunnels - at taxpayer expense - to help the commuter train lines they are still operating (at multi-million$ deficits), because they want to help kill more of the automobile traffic that their earlier tunnel projects helped produce.
The cycle repeats.