CONRAIL

conrail1

The break-up of Conrail to CSX and Norfolk Southern is just really a continuation of a drama that has gone on for about the last 80 years.

What was Transferred to Conrail in 1976? (A Short List)

Ann Arbor Railroad Company
The Central Railroad Company of New Jersey
Chicago River and Indiana Railroad Company
Dayton Union Railway Company
Erie Lackawanna Railway Company
Ironton Railroad Company
Lehigh and Hudson River Railway Company
Lehigh and New England Railway Company
Lehigh Valley Railroad Company
The New York and Long Branch Railroad Company
Penn Central Transportation Company (except employees of Canada Southern)
Pennsylvania-Reading Seashore Lines
Peoria and Eastern Railway Company
Raritan River Railroad Company
Reading Company
Union Depot Company, Columbus, Ohio

What happened to CONRAIL?

It was split between
Norfolk Southern
and
CSXTransportation
but
Some remained with Conrail Shared Assets Operations
None of the above will help you find former employees
Instead contact US Railroad Retirement Board
None of these will help you with history of railroads that made up Contail
Instead search the major railroads that formed Conrail
Penn Central
Erie Lackawanna
Jersey Central
Lehigh and Hudson River
Reading
Lehigh Valley

What companies made it to Conrail and what didn’t?

The major railroads that formed Conrail in 1976 didn’t merge in ALL their properties. Conrail didn’t want them! Most of the shortline’s and small railroads that went into CR did so because they were subsidiaries of the big lines that were being included. With the creation of CR there was no longer any reason to justify retaining the seperate corporations which were often retained for tax and insurance purposes with the railroads being operationally just another piece of their parent.

Best example I can find in the New York & Harlem Railroad. It stayed with Penn Central. All its active railroad properties had been leased to the New York Central Railroad in the 19th Century. Yes, this LEASE went to Conrail, but the New York & Harlem stayed with Penn Central. Even today, the New York & Harlem is a significant landowner. It even owns Grand Central Terminal!

I have located the companies as of 1976, from FreeDictionary and attempted to show what went to Conrail, and what didn’t.

Penn Central Transportation Company Railroad properties to Conrail in 1976, remained an active corporation.

New York Central Railroad Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Amsterdam, Chuctanunda and Northern Railroad Former New York Central property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Beech Creek Railroad Former New York Central property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Canada Southern Railway   Former New York Central property. Railroad properties to Conrail in 1976. BUT NOT EMPLOYEES. Corporation remained with Penn Central.

Chicago, Kalamazoo and Saginaw Railway   Former New York Central property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Chicago River and Indiana Railroad     Former New York Central property. Railroad properties to Conrail in 1976. Officially merged into Conrail in 1976.

Central Railroad of Indianapolis     Former New York Central property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Cleveland, Cincinnati, Chicago and St. Louis Railway (“Big Four”)     Former New York Central property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Detroit Manufacturers’ Railroad    Former New York Central property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Detroit River Tunnel Company     Former New York Central property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Erie and Kalamazoo Railroad     Former New York Central property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Fort Wayne and Jackson Railroad     Former New York Central property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Hudson River Bridge Company at Albany     Former New York Central property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Joliet and Northern Indiana Railroad     Former New York Central property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Kalamazoo, Allegan and Grand Rapids Railroad     Former New York Central property. Railroad properties to Conrail in 1976. Corporation dissolved. Formed in 1869 and immediately leased to the Lake Shore & Michigan Southern, it had always been under lease its entire existance.

Owasco River Railway     Former New York Central property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Mahoning Coal Railroad     Former New York Central property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Mahoning and Shenango Valley Railway     Former New York Central property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Michigan Central Railroad     Former New York Central property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

New York and Harlem Railroad     Former New York Central property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Niagara River Bridge Company     Former New York Central property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Peoria and Eastern Railway     Former New York Central property. Railroad properties to Conrail in 1976. Officially merged into Conrail in 1976.

St.Lawrence and Adirondack Railway     Former New York Central property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Troy and Greenbush Railroad     Former New York Central property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Pennsylvania Railroad     Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Baltimore and Eastern Railroad     Former Pennsylvania RR property. Railroad properties to Conrail in 1976. Officially merged into Conrail in 1976.

Cleveland and Pittsburgh Railroad     Former Pennsylvania RR property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Connecting Railway     Former Pennsylvania RR property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Delaware Railroad     Former Pennsylvania RR property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Erie and Pittsburgh Railroad     Former Pennsylvania RR property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Little Miami Railroad     Former Pennsylvania RR property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Northern Central Railway     Former Pennsylvania RR property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Penndel Company     Former Pennsylvania RR property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Pennsylvania and Atlantic Railroad     Former Pennsylvania RR property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Pennsylvania Tunnel and Terminal Railroad     Former Pennsylvania RR property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Philadelphia, Baltimore and Washington Railroad     Former Pennsylvania RR property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Philadelphia and Trenton Railroad     Former Pennsylvania RR property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Pittsburgh, Fort Wayne and Chicago Railway     Former Pennsylvania RR property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Pittsburgh, Youngstown and Ashtabula Railway     Former Pennsylvania RR property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Shamokin Valley and Pottsville Railroad     Former Pennsylvania RR property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Union Railroad of Baltimore     Former Pennsylvania RR property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

United New Jersey Railroad and Canal Company     Former Pennsylvania RR property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

Waynesburg Southern Railroad     Former Pennsylvania RR property. Railroad properties to Conrail in 1976. Corporation remained with Penn Central.

New York, New Haven & Hartford Railroad      Railroad properties to Conrail in 1976.

Holyoke and Westfield Railroad     Former New Haven RR property. Railroad properties to Conrail in 1976.

Norwich and Worcester Railroad     Former New Haven RR property. Railroad properties to Conrail in 1976.

South Manchester Railroad     Former New Haven RR property. Railroad properties to Conrail in 1976.

Reading Company     Railroad properties to Conrail in 1976. Reading Company became “Reading International”

Delaware and Bound Brook Railroad     Former Reading property. Railroad properties to Conrail in 1976.

East Pennsylvania Railroad     Former Reading property. Railroad properties to Conrail in 1976.

North Pennsylvania Railroad     Former Reading property. Railroad properties to Conrail in 1976.

Philadelphia, Germantown and Norristown Railroad     Former Reading property. Railroad properties to Conrail in 1976.

Plymouth Railroad       Former Reading property. Railroad properties to Conrail in 1976.

Port Reading Railroad     Former Reading property. Railroad properties to Conrail in 1976.

Trenton-Princeton Traction Company     Former Reading property. Railroad properties to Conrail in 1976.

Wilmington and Northern Railroad     Former Reading property. Railroad properties to Conrail in 1976.

Ann Arbor Railroad     SOME railroad properties to Conrail in 1976. Other property to State of Michigan.

Lehigh Valley Railroad     Railroad properties to Conrail in 1976. The Lehigh Valley Railroad liquidated after April 1, 1976. For several years after 04-01-76 the LVRR Estate was listed in the Official Guide with the notation For Sale: Track, OTM and Real Estate. The last Guide to carry a listing for the LVRR Estate was the November/December, 1980 issue.

Lehigh and Susquehanna Railroad     Former Lehigh Valley property. Railroad properties to Conrail in 1976.

Raritan Terminal and Transportation Company     Former Lehigh Valley property. Railroad properties to Conrail in 1976.

Central Railroad of New Jersey     Railroad properties to Conrail in 1976. Central Railroad of New Jersey became “Central Jersey Industries”

Dover and Rockaway Railroad     Former Central Railroad of New Jersey property. Railroad properties to Conrail in 1976.

Lehigh and New England Railway     Former Central Railroad of New Jersey property. Railroad properties to Conrail in 1976.

Mount Hope Mineral Railroad     Former Central Railroad of New Jersey property. Railroad properties to Conrail in 1976.

Wharton and Northern Railroad     Former Central Railroad of New Jersey property. Railroad properties to Conrail in 1976.

Lehigh and Hudson River Railroad     Railroad properties to Conrail in 1976. Corporation liquidated.

Erie Lackawanna Railway     Railroad properties to Conrail in 1976.

Lackawanna and Wyoming Valley Railway (DL&W)     Former Erie Lackawanna Railway property. Railroad properties to Conrail in 1976. Officially merged into Conrail in 1976.

Rochester and Genesee Valley Railroad (Erie)     Former Erie Lackawanna Railway property. Railroad properties to Conrail in 1976.

Allentown Terminal Railroad (CNJ/RDG)     Railroad properties to Conrail in 1976.

Bay Shore Connecting Railroad (CNJ/LV)     Railroad properties to Conrail in 1976.

Buffalo Creek Railroad (Erie/LV)     Railroad properties to Conrail in 1976. Officially merged into Conrail in 1976.

Dayton Union Railway (NYC/PRR/B&O)     Railroad properties to Conrail in 1976. Merged into Conrail in 1976.

Indianapolis Union Railway (NYC/PRR)     Railroad properties to Conrail in 1976. Officially merged into Conrail in 1976.

Ironton Railroad (LV/RDG)     Railroad properties to Conrail in 1976. Officially merged into Conrail in 1976.

New York Connecting Railroad (NH/PRR)     Railroad properties to Conrail in 1976.

New York and Long Branch Railroad (CNJ/PRR)     Railroad properties to Conrail in 1976. Officially merged into Conrail in 1976.

Niagara Junction Railroad (Erie/NYC?)     Railroad properties to Conrail in 1976. Officially merged into Conrail in 1976.

Pennsylvania-Reading Seashore Lines (PRR/RDG)     Railroad properties to Conrail in 1976. Officially merged into Conrail in 1976.

West Jersey and Seashore Railroad (PRR/RDG)    Railroad properties to Conrail in 1976.

Raritan River Railroad (CNJ/PRR)     Railroad properties to Conrail in 1976. Officially merged into Conrail in 1981.

Union Depot (Columbus) (NYC/PRR)     Railroad properties to Conrail in 1976. Merged into Conrail in 1976.

Central Indiana Railway     Railroad properties to Conrail in 1976. Merged into Conrail in 1976.

Cleveland Union Terminal (CUT)     Railroad properties to Conrail in 1976. Merged into Conrail in 1976.

Pittsburgh and Lake Erie Railroad     When Conrail was formed the Pittsburgh and Lake Erie Railroad, became an independent railroad due to the fact that P&LE was owed $15.2 million by Penn Central. In 1993 the company was taken over by CSX Transportation.

Detroit Terminal Railroad     Switching line at Detroit, Merged May 1, 1984, into Conrail

Monongahela Railway     The Monongahela Railway (MGA) was a coal hauler owned jointly by the Pennsylvania Railroad, the Pittsburgh & Lake Erie Railroad and the Baltimore & Ohio Railroad. Today this railroad belongs to the Norfolk Southern, taken over through the Conrail merger. Conrail (as PRR successor) had taken over the Monongahela Railway in 1993, in a deal giving P&LE/B&O successor CSX has trackage rights on the former Monongahela Railway.

Indiana Harbor Belt     The IHB operates as an independent road even though it is jointly owned by Norfolk Southern (25.5%), CSX (25.5%) and Canadian Pacific (49%). The NS and CSX shares came from Conrail, who had owned a 51% controlling interest. Conrail’s ownership traces back to Penn Central and New York Central, while Canadian Pacific’s stake came from Soo Line, who had inherited it from Milwaukee Road.

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nose2cdotfl9m2011harmon

Contributed April 2008 by Wayne Koch. Photo of former New York, New Haven & Hartford  FL9 taken at Harmon Shops of the former New York Central Railroad. FL9 2011 is now owned by the Connecticut Department of Transportation.
New York Central Railroad and New Haven Railroad merged  as Penn Central. Next they became part of Conrail. In 1982 all the commuter activities became Metro North Railroad.

This daily three-State commute into and out of NY City is run by the New York City Metropolitan Transportation Authority. Think it has a Director, but we KNOW it has a GOVERNOR and a SENATOR. it also runs the NY City SUBWAYS and LONG ISLAND RAILROAD.

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CONRAIL

The recent news about Conrail being acquired by either CSX or Norfolk Southern is just really a continuation of a drama that has gone on for about the last 80 years. Yes, some of the ramifications are extremely interesting. Especially, who will win, and even more interesting, what will the “loser” do? Will the “loser” acquire StL&H from CP, buy the NYS&W, or take over Guilford? Who will the first true “transcontinental” be? My bet is Union Pacific.

The last grand era of mergers (before the current round) began in 1954, when economic and political considerations attracted management. It ended when Penn Central collapsed in 1970. But we need to go back even further to understand the problem.

This soap opera really started about the time of the First World War (1917-1918) but many events even preceded this. Railroad organizational history before World War I can be put into several buckets:

* Before the Civil War, a few companies put together some basic routes.

* From the Civil War until the Panic of 1893, companies grew tremendously by absorbing feeder lines. The basic design of railroads was formed which lasted until the 1960’s.

* The third phase from the end of the 1890’s depression saw railroads look at mergers as a way to control ruinous competition.

* In the South, there were three major systems:

* Southern

* Seaboard

* Atlantic Coast Line (including Louisville & Nashville)

* The major player in the West was the Harriman empire of Union Pacific, Southern Pacific and Illinois Central.

* In the Northwest, there was Great Northern, Northern Pacific and Burlington. The Supreme Court dealt a far-reaching blow to mergers in 1904 by “busting up” the James J. Hill/ J.P. Morgan railroad empire called the Northern Securities Company.

* In the East, there were “communities of interest” which meant control of lines by either stock or interlocking directorates. These communities were headed by either Pennsylvania RR or New York Central as well as their bankers. The New Haven became overextended from too rapid absorption of other New England lines at too high a cost.

There was chaos in World War I with bottlenecks and car shortages. On December 29, 1917, President Wilson took control of the railroads. His chief administrator was William Gibbs McAdoo. The governing board included A.H. Smith of the New York Central. This arrangement, “kept the trains rolling”. It was the start of standardization, especially locomotives, because of problems with equipment moving too far from home. One secret of the success of this takeover was to eliminate circuitous routing.

In 1919, Glenn Plumb lawyer who appealed to the railway Brotherhoods, advocated government ownership of the railroads. Employees would have stock ownership. Britain, France, Germany and Canada all moved towards a nationalized consolidation after the War.

Senator Albert Cummings proposed a route plan to help financially weak railroads. Lot of his ideas got into the Transportation Act of 1920. This act also made the ICC (Interstate Commerce Commission) into more of a planning power.

In 1920, the ICC engaged Professor William Ripley of Harvard to develop a tentative plan for railroad consolidation. It reduced all US railroads to 24 systems. The plan advocated geographic monopolies such as New England and also advocated forced dismemberments. The ICC held hearings across the country. Lots of inconclusive debates occurred such as between B&O and New York Central over who got Jersey Central and Reading. In conclusion the plan was a failure.

The East was the area that could have benefited most from consolidation. The Pennsylvania RR was against any erosion of its power. Four powers controlled most of the roads: New York Central, Pennsylvania RR, B&O, and the Van Sweringen holdings. There was a “Fifth System” debate as to what to do with the railroads not controlled by the four “powers”. The most popular scheme was proposed by Leonor Loree, president of the D&H, in which he tried to combine D&H with Lehigh Valley and Wabash. The “powers” operated through holding companies with the Van Sweringen brothers using the Alleghany Corporation and the Pennsylvania RR forming Pennroad Company.

By 1930 Herbert Hoover wanted to stimulate investment and thought railroad consolidation would be an answer. The government brought back Professor Ripley with the result being the Railroad Unification Act of 1931.

Another plan was presented by Frederick Prince, past president of Pere Marquette. He concentrated maximum traffic on minimum trackage. Most of the preparation of this plan was done by John Barriger. The proposed network was seven systems (2 East, 2 South, 3 West). Each system would be a new corporation that would acquire existing railroads by leasing or renting. Reconstruction Finance Corporation would then buy their bonds. Roosevelt was “intrigued” by it.

John W. Barriger was an outstanding railroad manager; a real live railfan; an advocate of super railroads; and a railroad historian. He was born in Texas in 1899 and graduated from Massachusetts Institute of Technology. Beginning with the Pennsylvania, he worked for at least nine railroads as well as the government.

Barriger’s 1956 book “SUPER-RAILROADS FOR A DYNAMIC AMERICAN ECONOMY” proposed many changes in America’s railroads. Some of his findings and conclusions were:

 

* Railroads offer nationwide service for all types and quantities of freight and passenger traffic. Why not a nation-wide system (super-railroad)?
* Railroads operate best as a “wholesaler” of mass transportation. A super-railroad should concentrate on doing what it can do best.
* Railroads cannot gain full advantage of quantity production unless traffic volume is commensurate with efficient working capacity. As utilization of capacity increases, unit costs decline and earnings increase.
* Failure to earn a reasonable rate of return impairs the railroad’s efforts to attract capital and credit. A super-railroad would have this ability.
* Technological progress has been uneven. Dieselization produced significant savings yet signal systems, car construction and yard design have lagged. Car modernization can only be accomplished with a unified system because each train is only as strong as its weakest link (worst car).
* Skillful planning and coordination of system-wide local and through train service with yard and terminal work, by using schemes of “prior classification”, thereby minimizing the number of times cars must be switched en route, will achieve important reductions of expense and delay.
* More money is spent in repairing and servicing cars and locomotives than in running them.
* Electrification should be expanded in and limited to high traffic situations. Off-peak power could be used to move non-preference freight at off-peak hours.

In 1927 he left the Pennsylvania to become a railroad consultant. In 1934 he became chief of the railroad division of the Reconstruction Finance Corporation. He stayed with the government throughout World War II, working for the Office of Defense Transportation. At the same time he was reorganization manager of the Chicago & Eastern Illinois.

President Franklin Roosevelt created the office of Federal Coordinator of Transportation to encourage reducing duplication and reorganizing finances. Labor and the railroad owners didn’t like it. The Association of American Railroads was created by the owners to counter it.

In the East, the two proposed systems were:

* New York Central, Van Sweringen roads and New England (except New Haven)

* Pennsylvania RR, B&O, Norfolk & Western, New Haven

After twenty years of evasion, the railroads asked Congress to get the government out of the act and they said they would consolidate on their own. The Transportation Act of 1940 suggested nothing stronger than voluntary consolidation and set the mood for many years thereafter. As a matter of fact, no significant mergers occurred for the next fifteen years.

About the same time, Pennroad failed. It had invested in N&W, Lehigh Valley, Wabash, New Haven, Boston & Maine, Detroit, Toledo & Ironton, and Pittsburgh & West Virginia. Stockholders lost $84 million. The New Haven entered receivership in 1937. When it was reorganized in 1941, its common stock was written off as worthless.

The Pennsylvania RR wanted to control the Wabash; the New York Central objected – they made deal – Wabash stock was put in trust. Pennsylvania RR control merely denied the Wabash to anybody else as there were hardly any opportunities to integrate operations into PRR’s.

The Van Sweringen empire fell apart in the 1930’s. George Ball (glass jar fame) bought pieces of Alleghany Corporation at auction. He then sold to a combination of Robert Young and Allan Kirby (Woolworth heir). Alleghany’s holdings in the Erie and the Chicago & Eastern Illinois had to be sold off. By 1945, Alleghany only controlled the C&O which merged the Pere Marquette into it in 1947. C&O and Wheeling & Lake Erie were strong railroads. Nickel Plate & Pere Marquette were weaker. The Nickel Plate became more prosperous after 1941 by gaining more overhead traffic (in which it received full mileage rate but incurred no terminal expenses). Pere Marquette benefited from the auto industry in Detroit.

After C&O (Alleghany) dumped the Nickel Plate, the Lackawanna tried to buy it, but the deal fell through. Young then tried to get the New York Central. As early as 1946, his brokers were instructed to buy New York Central stock. He asked to get on the New York Central board, but was turned down. In 1954, he finally got control of the Central but had to give up the C&O.

Young took over the New York Central and cleaned house. All connections with the founding Vanderbilt family were cut. Alfred Perlman was brought it from the Denver, Rio Grande Western. Young and Perlman then found out what poor shape the Central was in. Nearly bankrupt, its famous four track “Water Level Route” was not able to compete for fast freight business as the passenger tracks were signaled for 80 mph while the freight tracks were only signaled for 30 mph.

In 1944, writer Edward Hungerford wrote a science-fiction novel called “Railroad for Tomorrow” about a 1960 nationwide rail merger.

The only merger in the 1940’s was Gulf, Mobile & Ohio which was a consolidation of the GM&N, Mobile & Ohio and then the Alton. Basically, it went from the Gulf of Mexico to Chicago with trackage to St. Louis and Kansas City.

By 1957, Pennsylvania RR and New York Central made their first attempt at talking about a merger. They were regarded as dinosaurs by some: big, obsolete and dying. The New York Central was upset when N&W merged in the Virginian which had been the NYC’s friendly connection to the coal fields. Pennsylvania RR was the power behind the N&W.

Erie and Lackawanna merger talks had begun in 1956. William White, Delaware & Hudson president in 1956, had worked for the Erie for 25 years. Original discussions had included the D&H. In 1955, Hurricane Diane had put the DL&W out of business for 29 days. There were other problems with the railroads – for instance, commuters. The DL&W used to be profitable but the Erie had numerous bankruptcies over the years. In 1959, D&H got out of the merger picture. Following the recent history of its parents, Erie Lackawanna had a lifetime of deficit operation except 1965 and 1966. Other actions had been taken before 1960. The Erie had shifted its terminal from Jersey City to Hoboken in 1956. The merger was opposed by railroads operating into Buffalo because a combined Erie and Lackawanna could bypass them. One road was the Nickel Plate. NKP had once controlled 54% of Erie but lost it in 1930’s. DL&W had held 15% of NKP but sold in 1959. Seeing formerly friendly connections drying up, it opposed the merger. The merger saw 2199 miles of Erie plus 918 miles of DL&W less 86 miles abandoned equaling 3031 miles. The new road was organized into two districts – the western was all-Erie while the eastern a mix. “Friendly Service Route” was the slogan for the new road. It had 31,747 freight cars, 1,158 passenger cars, 695 diesels, 20,000 employees. Erie was the “surviving” entity in merger and the new headquarters was located in Cleveland. The new road had a series of leaders until William White took over in 1963. Before D&H, he had been New York Central president until Robert Young won his famous proxy battle in 1953.

Back to the roots of mergers, independently, John E. Oldham had made a proposal backed by the American Bankers Association which was published in the February 20, 1920 “NATION’S BUSINESS”.

Earlier in this century, two brothers from rural Ohio built a railroad empire when railroads were more critical to American transportation. Their achievements were first real estate, secondly in skyscraper construction, and finally in railroad consolidations. Oris P. and Mantis J. Van Sweringen were bachelors who had no hobby but work.

In 1916, the New York Central sold them the New York, Chicago & St. Louis (commonly known as the Nickel Plate). This road did not do well with passenger traffic but had a rich freight business. They hired John J. Bernet as the president to run it. By 1922 they had absorbed the Lake Erie & Western and the Toledo, St. Louis & Western (Clover Leaf Route).

Next, they gained control of the Chesapeake & Ohio and Hocking Valley (the Hocking Valley gave C&O a long haul route from the Ohio Valley to the Great Lakes). These fed coal tonnage to Nickel Plate which served industrial centers such as Lackawanna, Cleveland, Lorain, Toledo, Gary and Chicago. By 1927, the Van Sweringens had 26% of the Erie, 33% of Pere Marquette and 17% of Wheeling & Lake Erie.

In 1926 the Interstate Commerce Commission did not allow the brothers to merge their holdings. They then shifted their consolidation scheme to C&O to satisfy minority shareowners. This didn’t work either.

The coming of the Great Depression in 1929 nullified whatever unification plans the “Vans” had. They died in 1936 and 1937 after their empire collapsed.

Some of the most fascinating railroad literature of the 1940’s are transcripts of Robert R. Young’s testimony before the Interstate Commerce Commission (I. C. C.) on his petition for permission to accept a seat on the New York Central board of directors. His Chesapeake & Ohio owned 6% of the Central and the stock was “impounded” in a voting trust which prevented C&O from voting on director’s appointments.

While railroad barons of old like Vanderbilt or Gould worked behind the scenes, Young had to carry out his plans in the glare of public hearings. He enjoyed the publicity and used it as a forum to express his views on railroading. He felt a C&O – New York Central merger would be good for railroading and the country. Seeing the New York Central as undervalued yet a great railroad property, he had bought 400,000 shares at $18/share.

Ironically, between 1889 and 1906 the New York Central owned a substantial interest in the C&O. When the Pennsylvania sold its interest, the Central had followed suit.

His biggest achievement was saving the New York Central. His major contributions were keeping it from defaulting on its huge debt and hiring Al Perlman from the Rio Grande. He then kept his nose out of the New York Central. When Central stock was selling at 23 1/2, he predicted it would break 100. By 1966 it reached 89 1/4 while paying $3.15 in dividends.

In 1948 he hatched a plan to affiliate his Chesapeake & Ohio with the New York Central. After he was denied a seat on the Central’s board by the ICC, he tried to get approval for a C&O, New York Central and Virginian merger. He had been denied the seat because of the adverse competitive effect it might have on the Virginian. The Virginian’s only friendly western connection was with the New York Central by means of a bridge over the Kanawha River. The C&O was a competitor of the Virginian (as was the Norfolk & Western which eventually gobbled up the Virginian).

Young felt the only way for railroads to keep rates down was to eliminate some of the 131 railroad presidents and create regional systems. He was chairman of the Federation for Railway Progress. The Federation’s monthly magazine contained articles on the controversial issues of the times. Some of the more interesting ones were: dieselization vs. electrification; new “reefer” techniques being explored for the frozen food industry; A. E. Perlman’s progress on the Rio Grande; and a preview of Train “X”.

Young was a severe critic of the Association of American Railroads. The railroads he controlled withdrew from it yet used all its services except advertising and public relations. His railroads continued to use the little-publicized A.A.R. activities such as car service, accounting, and the mechanical and control arrangements necessary for equipment exchange.

Train “X” was a product of C&O’s research department. Cars were about one-third as long as standard cars, much lower, and had two wheels each. They hooked together like semi-trailers. They were supposedly less likely to derail. Air conditioning and other auxiliary equipment were in the headend power car instead of under car floors. The locomotive turned out to be a “bummer”, but the concept re-emerged several years later as the United Aircraft Turbotrain. His point was that conventional equipment was too expensive.

Young always pushed for a “breakthrough” in the technology of passenger trains. His feeling was that a ton of coal could only be hauled one way and once you haul it, you can’t haul it again; but if you give passengers good service, you can haul them back and forth two or three times a month. He bought a deluxe train to run between Cincinnati and Washington with sections to Louisville and Newport News. Unfortunately the steam turbine-electrics didn’t work and the domes wouldn’t fit in Washington’s Union Station. Young identified himself with the passenger because he knew that public support would blow his way if he attacked what bothered the passenger. He criticized long ticket-window lines, upper berths and dining-car tipping.

Since Robert R. Young began writing memos to the New York Central in 1948, the writing of memos to Mr. Young took on all the aspects of a national sport. The Louisville newspaper wrote him one (and published it as an ad in several other newspapers). In the memo they complimented him on the courtesy of his employees and some of the ideas he had introduced, but then ribbed him on the lateness of C&O trains into Louisville and the quality of the equipment on these trains. They summarized by telling him not to focus so hard on becoming a New York Central director and forget all about running the C&O.

Robert Ralph Young was a proponent of high-class freight travel at high speed. He saw no reason why fruits and vegetables from Florida and California couldn’t move to New York and Chicago when they were ripe. He published several ads questioning why a hog can cross America but a passenger must change trains. Young criticized what he called “Rip Van Winkle” rail management. Robert Young’s ideas were way ahead of his time. He ordered 1000 hoppers with roller-bearings when there were less than 100 freight cars in the country so equipped. He advocated mechanical refrigerator cars. He had criticized railroads for “iceboxes and hotboxes”. Some of his ideas were credit cards, on-train movies and coast-to-coast sleepers.

He argued that freight car shortages could be eliminated by running freight trains 10 to 15 mph faster. He constantly pushed for faster cross-country freight schedules. Sometimes he was not factually precise and he was inseparably linked with the C&O. His opposition observed that C&O coal trains rolled slower than western freights that he criticized. While other roads were dieselizing, C&O stuck with steam. Young responded that burning oil at a rapid rate was not in the public interest.

His main idea for the future was that fast trains would rush freight to the outskirts of the population centers where trucks would take over. Trucks would keep out of long-haul and trains would stay away from inner-city switching. New York Central’s Flexi-Van was an attempt at this end.

Young moved into railroading from General Motors where he had became treasurer at the age of 31. Lucking out of the 1929 stock market crash by selling short, he obtained a New York Stock Exchange seat in 1931. For an extremely low price, he obtained control of the Alleghany Co.

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END OF CONRAIL

As we know, Norfolk Southern Corporation and CSX Corporation made an agreement which will reshape the eastern rail system and restore competition to the largest market in the Northeast for the first time in more than two decades. I have followed this extensively and have tried to put together a summary of what has happened and what will happen (according to NS and CSX press releases).

On April 8, 1997 CSX and NS announced an agreement to acquire Conrail and operate its routes and assets in a $10 billion transaction, with Norfolk Southern getting 58 percent and CSX 42 percent. The two carriers filed an eight-volume application to the government detailing nearly $1 billion of what they feel will be public benefits from the transaction, which they hope will bring a new era of rail service and rail-truck competition. The 15,000-page application lists dozens of service and infrastructure improvements that plan to deliver more reliable and efficient service to thousands of customers. In the application, the companies said their plan will create balanced competition in the East, extend their reach into large new markets, and replace Conrail’s monopoly with head-to-head rail competition. The companies said the transaction will stimulate economic growth in the Northeast by improving transportation options for industries throughout the region.

The restructuring will result in two well-matched rail systems, with both providing single-line service. After the carving is done, CSX will operate more than 23,000 route miles in 23 states and Norfolk Southern more than 21,000 miles in 22 states. In addition, the projected diversion of traffic from congested highways to rail will deliver significant benefits to the public. The two carriers estimated that within three years the transaction annually will save 120 million gallons of diesel fuel, eliminate more than a million truck trips, reduce truck traffic on the nation’s highways by more than 780 million miles, and save about $94 million in highway maintenance costs. In presenting the case for the most far-reaching railroad restructuring in history, the companies said they will spend a combined $1.2 billion for capital improvements. The money will be spent over three years for such things as track improvements, added capacity, new or expanded freight terminals, clearance projects, new automobile distribution centers.

Detailing the planned capital investments, CSX estimated it will spend more than $488 million for projects that include $83 million for Conrail route improvements; $151 million in corridor up-grades; nearly $76 million for expansion or improvement of intermodal and automobile facilities; more than $77 million for merchandise terminals; and the remainder in mechanical facilities and other projects.

NS said it will spend about $729 million on major capital improvements and equipment purchases: about $220 million for expansion or improvements in intermodal facilities; $130 million for corridor up-grades; about $70 million to improve existing CR routes; $30 million for new automobile facilities; about $100 million to improve mechanical facilities; $26 million for track connections; and $98 million for new equipment.

Other highlights of the joint application include a huge increase in single-line service, providing shippers with shorter transit times and more reliable service. For shipments of automobiles, chemicals, agricultural commodities and other merchandise, a projected 233,000 additional shipments will move on a single carrier with no intermediate transfer. A 15,000-shipment increase in single-line service for coal is projected. For intermodal customers, single line routings will significantly improve speed and reliability on lines linking current NS markets in the Southeast and Midwest with current CR northeastern markets. Transit times between the Southeast and Northeast will be reduced through more efficient routings, and additional corridors will be cleared to allow doublestack container service. For automobile manufacturers, the “New Norfolk Southern System” will speed delivery of new vehicles to dealers as compared to single system routes. The network is designed to move 90% of available vehicle traffic in dedicated trains, reducing transit time and damage. For chemicals customers, most of which provide their own railcars, the new NS service network will improve equipment utilization by eliminating costly delays in transferring shipments between NS and CR. NS will add or improve three service routes to link the Northeast and the Midwest.

1. NS’s Penn Route will be the shortest rail route between northern New Jersey and Chicago.

2. NS’s Southern Tier Route will integrate Conrail’s Southern Tier Line across New York State with Norfolk Southern’s existing Buffalo-Cleveland line. This new route will be an important double-stack route into the New York City metropolitan area market and will provide access to connecting carriers serving New England. Projections are that NS will run eight through trains per day on this route, in addition to CP/St. Lawrence & Hudson and New York, Susquehanna & Western operations that now use and will continue to use the Southern Tier Line under existing trackage and haulage rights.

3. NS’s Southwest Gateway Route will connect NS’s current Kansas City line with CR lines at Vermilion, OH and Butler, IN for connection with the Penn Route. This new route will bypass the congested Chicago and St. Louis gateways. Connections at Sidney, IL with Union Pacific and at Tolono, IL with Illinois Central will offer competitive service for heavy petrochemical and other flows between the Northeast and southwestern and Gulf Coast states.

Four major NS routes are projected to spur improved service between the Northeast and Southeast.

1. The “Piedmont Route” will connect these regions using two corridors north of Manassas, VA. One leg via Allentown and Harrisburg, PA and Hagerstown, MD will carry freight between the Southeast and the Philadelphia area; it also will be the clearance route for doublestack and multilevel (vehicle) traffic.

2. The second route will use Amtrak’s Northeast Corridor via Baltimore, Wilmington, DE and Philadelphia for southeastern traffic and for Triple Crown RoadRailer service. New RoadRailer terminals will be built along this route in Philadelphia, Baltimore, and Charlotte, NC. The “Shenandoah Route” will handle northeastern traffic via Harrisburg, PA, Roanoke, VA, and Knoxville and Chattanooga, TN, to Atlanta and via the New Orleans and Memphis gateways to the west. This route parallels Interstate 81, and NS expects to draw significant general merchandise and intermodal freight from trucks to rail service on this route. Coal between Central Appalachian coal fields and the Northeast also will move via this route.

3. The “Mid-South” Route will extend from Chicago, Detroit, Cleveland, and Pittsburgh to the Southeast via Cincinnati. Most of this route already is cleared to handle domestic doublestack traffic, and planned capital investments will provide the remaining clearances, add track capacity, and expand intermodal terminals at Cincinnati and Columbus, OH.

4. The “Bridge Route” will connect the Southeast with upstate New York, Canada, and New England through Harrisburg. Much of this route will consist of Norfolk Southern haulage over CP/St. Lawrence & Hudson from Sunbury, PA, to Albany, NY, via Binghamton, NY. CP and NS will invest more than $11 million in the Sunbury line to enable it to handle domestic doublestacks and heavy freight. Paper, clay and intermodal traffic will be the principal commodities handled.

(a- TennesseeCentral was spilt between Illinois Central, L&N (now CSX) and Southern (now NS)

Three markets – Detroit, northern New Jersey, and the southern New Jersey/Philadelphia area – will be within new “Shared Assets Areas”. Rail customers within these Shared Assets Areas will have direct two- carrier competition through access to both the NS and CSXT.

Some details of the breakup:

CSX will keep former NYC Water Level route and the Chicago line; the Boston and Albany route to go to CSX as well. I assume CSX is to get the Indianapolis line to St. Louis too.

There was no mention of the Lehigh Valley, but I assume this would go to NS to serve as access to New York City. The former CNJ line to Philadelphia would go to CSX under this scenario.

Very interesting to say the least. This could have happened many years ago if several proposed mergers had gone through. Then natural partners N&W and PRR could have joined up.

Meanwhile, because of the merger, Conrail announced that it has decided to retain ownership and operation of freight service in six clusters of lines it had previously planned to sell to short line or regional railroads. Conrail said the line clusters are:

Battle Creek – Jackson – Ypsilanti, MI corridor and associated branch lines.

Boston area branch lines.

Buffalo, NY – Keating, PA corridor and associated branch line.

Danville, IL – Terre Haute, IN corridor and associated branch lines.

Montréal – Syracuse, NY corridor and associated branch lines.

Niles – North Warren – Cortland – Brier Hill, OH area branch lines.

In addition, negotiations with a prospective buyer over the sale of Conrail’s branch lines in southern New Jersey have been suspended indefinitely.

Conrail, with corporate headquarters in Philadelphia, currently operates an 11,000 mile rail freight network in 12 Northeastern and Midwestern states, the District of Columbia, and the Province of Québec. Under the plan, NS and CSX will divide all of Conrail’s principal routes, which form an “X” crossing in Ohio, with each railroad operating two of the four legs of the “X”. Norfolk Southern will obtain about 58% of CR and CSX about 42%, based on the revenues generated by Conrail’s lines and facilities in 1995. In arriving at the proposed division, the companies focused on producing the best fit with their existing systems and optimizing service to customers. CSX will operate the legs between Boston and Cleveland through Albany and Buffalo with connecting lines to Montréal, New York and New Jersey and between Cleveland and St. Louis (former New York Central mains). In addition, CSX will operate Conrail’s line connecting New York and Philadelphia (a former Reading line) and the line that connects Crestline, OH and Chicago, a portion of which west of Fort Wayne, IN now is owned by NS. CSX will also operate the line between Toledo and Columbus, OH. NS will operate legs of the X between Chicago and Cleveland (a former New York Central main line) and the Conrail line between Cleveland and northern New Jersey via Pittsburgh and Harrisburg (mostly the former Pennsylvania Railroad main line). In addition, NS will operate the Conrail line serving the metropolitan New York area between northern New Jersey and Buffalo through Binghamton, NY, (former Erie Lackawanna) and another between Buffalo and Harrisburg, PA. NS will operate most Conrail lines in Michigan, Maryland, Delaware and Pennsylvania. It also will operate the routes between Toledo and Detroit, Columbus and Cincinnati and between Columbus and Charleston, WV. Norfolk Southern and CSX jointly will operate Conrail assets in major terminal areas such as Detroit and northern and southern New Jersey. The two companies also will share access to certain lines in Philadelphia and Indianapolis, and to the rail lines serving the Monongahela coal fields in southwestern Pennsylvania.

March, 1998

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OTHER TRANSFERS TO CONRAIL

CUTC (NYC/PC)
was the Cleveland Union Terminal Company
The T-PT
(RDG) was the Trenton-Princeton Traction Company
The IUR (PRR/PC) = Indianapolis Union Railway
The MHM (CNJ) = Mount Hope Mineral
The WN (CNJ) = Wharton & Northern
The L&WV (EL) = Lackawanna & Wyoming Valley
BCK (EL/LV) = Buffalo Creek Railroad
Dayton Union Railroad (The Bee Line) was NY Central and Big Four
Became part of Norfolk Southern

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