It seems it was a reality that long distance passenger (and for the matter commuter trains) was a money loosing business. When the merger "buyout" happened why then did the goverment allow this to happend instead of taking over the long distance and commuter trains like they did less then 10 years later? Would this have saved PC and inturn save the EL? Thoughts?
Well, Amtrak wasn't that much later - PC = 1968, Amtrak = 1971, and it took a lot of discussion for that. Government was basically just getting into commuter subsidizing in the 1960s (maybe late 1950s), so there was a decent (if insufficent) amount of subsidizing by 1968.
Also, the 'Great trainoff' was 1967, a year before PC.