I'm curious as to how BN, UP, AT&SF and other western roads survived when the eastern ones were faltering and falling. I know regulation wasn't the only reason why the eastern roads were going bankrupt but I still don't fully get how the other roads thrived.
Lone Geep
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Some - though by no means all - of the reasons:
Others can and will add more. You could also pretty much list all the reasons that the eastern railroads were failing, and use the converse condition to identify why and how the western ones survived.
- Paul North.
Also, most of the eastern railroads jumped the gun on merging, or just chose a bad time to, with Penn Central being a prime example. Hence why the N&W and Southern held off until 1982 for merging.
After the Pennsy and Central merge, the federal government burdened the troubled Penn Central with the bankrupt New Haven in 1968, which just didn't do the railroad any good at all. This, among other reasons, caused the Penn Central to go bankrupt in 1971. How did the BN avoid the potential trouble? I don't know really. However, Paul named all of the potential reasons as to why the trouble was avoided.
The Lehigh Valley Railroad, the Route of the Black Diamond Express, John Wilkes and Maple Leaf.
-Jake, modeling the Barclay, Towanda & Susquehanna.
Lehigh Valley 2089 How did the BN avoid the potential trouble?
How did the BN avoid the potential trouble?
Powder River Basin coal.
erikemPowder River Basin coal.
Oh yeah, forgot about the Powder River Basin.
lone geep I'm curious as to how BN, UP, AT&SF and other western roads survived when the eastern ones were faltering and falling. I know regulation wasn't the only reason why the eastern roads were going bankrupt but I still don't fully get how the other roads thrived.
The answer is: "They weren't."
In addition to the rairoads you mention there were the Southern Pacific, Western Pacific, and Milwaukee Road who were all either at death's door or getting there. Come a little further east and you get to near corpses such as the Katy and Rock Island. The North Western was not in good shape. It goes on.
BN was formed to shrink the physical plant to fit a declining traffic base. It was saved by the Powder River coal field. UP had a simple route structure with simple terminal operations. With the exception of Los Angeles, it was a bridge carrier between California and the east. Long hauls and limited terminal expenses mitigated the effect of regulation on the UP (It did loose the perishable busines, a core market, due to regulation.)
Santa Fe had the longest hauls and the advanage of being the only rail carrier under one management to link Chicago and California. It could sell speed and reliability
These factors mitigated the adverse effects of regulation on these three carriers. But none of these three was really a growth business with a bright future. They were just dying more slowly than some of the others.
Regulation was a terminal illness for the US railroads. But like cancer in humans, it affected different railroads differently. The Southern did RELATIVELY well because it served a geographic area experiencing good economic growth, it had more marketing smarts than most other rail lines, and it was willing to fight a Texas chain saw caged death match with the regulators through to the Supreme Court if need be.
But the fact remains that under the really dumb (and I mean that!) Federal economic regulations the railroads could be nothing other than a declining industry headed for oblivion. Some railroads just got to oblivion ahead of others.
It pretty much depended on the market environment for the railroad. One malignant thing that regulation did was prevent the rail corporation from adjusting to changes in the market. The railroads serviing the geographic areas with the most change, i.e. the Northeast, suffered the most and died the quickest.
greyhoundsBut the fact remains, that under the really dumb (and I mean that!) Federal economic regulations the railroads could be nothing other than a declining industry headed for oblivion. Some railroads just got to oblivion ahead of others.
They were simply sitting ducks waiting to be sucked into oblivion.
Yes, will quite a few western railroads weren't doing any better, but they went bankrupt much later than the eastern railroads.
The regulations were a plague to the railroad industry. If staggers hadn't been passed, I bet you that the industry would have been no more.
How do you mean this? They were regulated just the same and faced the same fates. UP sucked up as many railroads as it could as did the Burlington people. But they had longer hauls, got rid of duplicated lines and facilities quickly, laid out their end to end routes for strength and were not dittled by the same Wall Streeters as PC was. So they were in better shape than the Eastern roads because manufacturing moved to them, the Eisenhower Interstates were not a big a factor in the long haul traffic, and the St. Lawrence Seaway brought them the traffic instead of the New York Central or Pennsy. But look what did happen to the Rock Island and Milwaukee Road and Soo...they also were similar to the EL' s, LV.s and CNJ's of the east.
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Lehigh Valley 2089 erikemPowder River Basin coal. Oh yeah, forgot about the Powder River Basin.
Once the Power River Basin got to 'production' BN tonnage handled about doubled.
Never too old to have a happy childhood!
So they weren't as well off as I thought. Though the Rock Island declined because it served too many cities and paralleled other rail lines. I was thinking that the ones I previously mentioned were thriving because they were maintaining passenger and getting new locomotives and such.
greyhoundsThe railroads serviing the geographic areas with the most change, i.e. the Northeast, suffered the most and died the quickest.
And one important part of that change was the decline in traffic on the commuter rail roads while they were required to maintain commuter service. There was also the issue of hiring personnel for 8 hours when you needed them only for 4 hours during the rush hour.
John WR greyhoundsThe railroads serviing the geographic areas with the most change, i.e. the Northeast, suffered the most and died the quickest. And one important part of that change was the decline in traffic on the commuter rail roads while they were required to maintain commuter service. There was also the issue of hiring personnel for 8 hours when you needed them only for 4 hours during the rush hour.
Johnny
I recall that at one time base RR fares of western locations were slightly higher. I have some old brochures that state on the listed price '" slightly higher Denver and west " what was that ?
DeggestyAnd, it was extremely difficult to raise the fares charged even when the cost of operating the trains was increased.
But it is not extremely difficult or even difficult at all for New Jersey Transit to raise fares. Our fares are among the highest in the country if not the world.
I don't mean to knock our transit agency. In this world you get nothing for nothing and we do have a very good rail transit system. But just supposing the Pennsylvania Railroad, Delaware Lackawana and Western, Eire and Central Railroad of New Jersey had been able to raise their fares as easily as New Jersey Transit can. Things might have been very different.
I would opine that one reason railroads in the Northeast didn't do well (all other factors notwithstanding) was that there were so many of them, with numerous duplicate routes. Shedding redundant/little used lines was probably as trying as was getting a rate changed.
While there were certainly duplicate routes in the west (ie, Rock Island), methinks there was a lot less 'local pride' railroads built as compared to the east.
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One more small contributing factor was property taxation. This wasn't exclusively a Northeastern problem, but I do recall that some of those bankrupt lines had been paying horrific tax rates for the honor of having a track through some town.
One other factor was density of population and shippers.
It was almost impossible to abandon an unprofitable line East of the Mississippi because the shippers would call the ICC and protest. More often than, not, it was potential shippers and not actual bill-paying shippers that complained. Fewer factories per mile in the West meant fewer protests to line rationalization.
People with "local pride" could call their congressmen to oppose an abandonment or rate increase. With smaller congressional districts in the East a twenty mile line could concievably cross parts of up to three congressional districts, so you have 3 conressmen talking to the regulators instead of just one out West.
Then PC happened, and many people (and congress) finally woke up to reality.
greyhounds lone geep I'm curious as to how BN, UP, AT&SF and other western roads survived when the eastern ones were faltering and falling. I know regulation wasn't the only reason why the eastern roads were going bankrupt but I still don't fully get how the other roads thrived. The answer is: "They weren't." In addition to the rairoads you mention there were the Southern Pacific, Western Pacific, and Milwaukee Road who were all either at death's door or getting there. Come a little further east and you get to near corpses such as the Katy and Rock Island. The North Western was not in good shape. It goes on. BN was formed to shrink the physical plant to fit a declining traffic base. It was saved by the Powder River coal field. UP had a simple route structure with simple terminal operations. With the exception of Los Angeles, it was a bridge carrier between California and the east. Long hauls and limited terminal expenses mitigated the effect of regulation on the UP (It did loose the perishable busines, a core market, due to regulation.) Santa Fe had the longest hauls and the advanage of being the only rail carrier under one management to link Chicago and California. It could sell speed and reliability These factors mitigated the adverse effects of regulation on these three carriers. But none of these three was really a growth business with a bright future. They were just dying more slowly than some of the others. Regulation was a terminal illness for the US railroads. But like cancer in humans, it affected different railroads differently. The Southern did RELATIVELY well because it served a geographic area experiencing good economic growth, it had more marketing smarts than most other rail lines, and it was willing to fight a Texas chain saw caged death match with the regulators through to the Supreme Court if need be. But the fact remains that under the really dumb (and I mean that!) Federal economic regulations the railroads could be nothing other than a declining industry headed for oblivion. Some railroads just got to oblivion ahead of others. It pretty much depended on the market environment for the railroad. One malignant thing that regulation did was prevent the rail corporation from adjusting to changes in the market. The railroads serviing the geographic areas with the most change, i.e. the Northeast, suffered the most and died the quickest.
Very nicely put! That's it in a nutshell.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
oltmannd greyhounds lone geep I'm curious as to how BN, UP, AT&SF and other western roads survived when the eastern ones were faltering and falling. I know regulation wasn't the only reason why the eastern roads were going bankrupt but I still don't fully get how the other roads thrived. The answer is: "They weren't." In addition to the rairoads you mention there were the Southern Pacific, Western Pacific, and Milwaukee Road who were all either at death's door or getting there. Come a little further east and you get to near corpses such as the Katy and Rock Island. The North Western was not in good shape. It goes on. BN was formed to shrink the physical plant to fit a declining traffic base. It was saved by the Powder River coal field. UP had a simple route structure with simple terminal operations. With the exception of Los Angeles, it was a bridge carrier between California and the east. Long hauls and limited terminal expenses mitigated the effect of regulation on the UP (It did loose the perishable busines, a core market, due to regulation.) Santa Fe had the longest hauls and the advanage of being the only rail carrier under one management to link Chicago and California. It could sell speed and reliability These factors mitigated the adverse effects of regulation on these three carriers. But none of these three was really a growth business with a bright future. They were just dying more slowly than some of the others. Regulation was a terminal illness for the US railroads. But like cancer in humans, it affected different railroads differently. The Southern did RELATIVELY well because it served a geographic area experiencing good economic growth, it had more marketing smarts than most other rail lines, and it was willing to fight a Texas chain saw caged death match with the regulators through to the Supreme Court if need be. But the fact remains that under the really dumb (and I mean that!) Federal economic regulations the railroads could be nothing other than a declining industry headed for oblivion. Some railroads just got to oblivion ahead of others. It pretty much depended on the market environment for the railroad. One malignant thing that regulation did was prevent the rail corporation from adjusting to changes in the market. The railroads serviing the geographic areas with the most change, i.e. the Northeast, suffered the most and died the quickest. Very nicely put! That's it in a nutshell.
While over regulation was certainly a major contributing factor, it would be foolish to forget why railroads were over regulated in the first place. The out-dated regulations were the result of railroad management practicing destructive business practices. Charging extremely high rates to farmers, holding shippers hostage, manipulating stocks, stealing investors money, etc were the reasons why railroads were over-regulated. Plain and simply there was a time when railroads were the most powerful corporations in America and few rotten apples took advantage of that power. As highways and airlines came into their own, the railroads unfortunately continued to pay the price of the sins of their forefathers.
I think the best analogy to describe the battle to dergulate the railroad industry is the paroling a convicted criminal. Railroads were convicted for committing a variety of crimes at the end of the 19th Century, were sentenced to a life of regulation and are now asking for a parole. Has the convicted changed his ways? Until the collapse of Penn Central and the creation of Conrail, the answer to that question was "No. Once a criminal, always criminal." Here, regulation was born out of sin. Forgiveness and trust was and still is hard to come by.
Not yet mentioned as a problem for Northeastern Railroads is that when the Penn Central went bankrupt it no longer had to make per diem payments to the other railroads, but weak roads like the Lehigh Valley, Lehigh & Hudson River, Boston & Maine, et al. had to continue to make their payments to Penn Central. That immediately created a cash flow problem for Penn Central's smaller neighbors.
beaulieu Not yet mentioned as a problem for Northeastern Railroads is that when the Penn Central went bankrupt it no longer had to make per diem payments to the other railroads, but weak roads like the Lehigh Valley, Lehigh & Hudson River, Boston & Maine, et al. had to continue to make their payments to Penn Central. That immediately created a cash flow problem for Penn Central's smaller neighbors.
Rgds IGN
narig01 beaulieu Not yet mentioned as a problem for Northeastern Railroads is that when the Penn Central went bankrupt it no longer had to make per diem payments to the other railroads, but weak roads like the Lehigh Valley, Lehigh & Hudson River, Boston & Maine, et al. had to continue to make their payments to Penn Central. That immediately created a cash flow problem for Penn Central's smaller neighbors. Not just their neighbors. Anybody remember the shortage of boxcars in the early 70's? Penn Central was sucking boxcars from everywhere they could. The reason I heard was that PC's boxcars were being illegally repossessed and sent either to storage, scrap or to other carriers(remember the LaSalle & Bureau County). I may be wrong about this, if so someone enlighten me. Rgds IGN
Also, whatever boxcars that Penn Central had were in such poor shape that they were on the RIP track more than on the mainline. And on top of that, shop forces were so weak from poor equipment that the cars couldn't be returned to the mainline at a decent rate.
MerrilyWeRollAlongWhile over regulation was certainly a major contributing factor, it would be foolish to forget why railroads were over regulated in the first place. The out-dated regulations were the result of railroad management practicing destructive business practices. Charging extremely high rates to farmers, holding shippers hostage, manipulating stocks, stealing investors money, etc were the reasons why railroads were over-regulated. Plain and simply there was a time when railroads were the most powerful corporations in America and few rotten apples took advantage of that power. As highways and airlines came into their own, the railroads unfortunately continued to pay the price of the sins of their forefathers.
I suspect it was more out of inertia than "paying the price for past sins". It was painfully obvious to those involved and any paying close attention in the late 1940s that the industry was slowly (maybe not so slowly/) dying, yet real action occurred only after a major meltdown. The whole problem could have been easily avoided.
A very interesting book on modern railroading is "Union Pacific, The Reconfiguration: America's Greatest Railroad from 1969 to the Present" by Maury Klein.
Klein covers not only modern history of UP, but also touches on the industry problems. Mergers with MoPac, WP, Katy, CNW, and SP are covered. There is considerable discussion of the management of UP and how different leaders had influences on the railroad.
This is really a great book and will answer many questions you ask about the railroading west of the Mississippi.
Ed
MerrilyWeRollAlongI think the best analogy to describe the battle to dergulate the railroad industry is the paroling a convicted criminal. Railroads were convicted for committing a variety of crimes at the end of the 19th Century, were sentenced to a life of regulation and are now asking for a parole. Has the convicted changed his ways? Until the collapse of Penn Central and the creation of Conrail, the answer to that question was "No. Once a criminal, always criminal." Here, regulation was born out of sin. Forgiveness and trust was and still is hard to come by.
I think your analogy is fascinating. I know some railroads engaged in questionable practices but I've never thought of them as seeking forgiveness.
I can understand that any per diem due for days prior to the bankruptcy filing would just become part of the pool of PC creditors to be paid at some future time, if at all. However, wouldn't the per diem charges incurred by PC after the filing be treated as a necessary post-bankruptcy expense and receive priority treatment out of the continuing cash flow?
beaulieuNot yet mentioned as a problem for Northeastern Railroads is that when the Penn Central went bankrupt it no longer had to make per diem payments to the other railroads, but weak roads like the Lehigh Valley, Lehigh & Hudson River, Boston & Maine, et al. had to continue to make their payments to Penn Central. That immediately created a cash flow problem for Penn Central's smaller neighbors.
I'm pretty sure Hurricane Agnus didn't help the Northeastern Railroads either. They already had enough on their plates, but then to be hit by a powerful hurricane? THAT would cripple whatever was left of the troubled railroads.
Prior to Hurricane Agnes, Erie Lackawanna's management felt that they could successfully re-organize outside of the early proposals for Conrail. EL took a big hit from Hurricane Agnes and management basically tossed in the towel as far remaining outside of Conrail.
Why did western RRs "thrive" (comparatively)? Think you need to rephrase that: why did traffic on western RRs increase during the 1950s-1960s while it dropped on eastern RRs? Circa 1960 UP, SP and SFe ton-miles were about the same as the WWII peak, and they continued to climb. (SP leveled off after 1970.)
It also seems to me railroads in the Southeast were better off than those in the northeast. Southern, Norfolk and Western and FEC all seemed to be doing pretty well. Why did these roads fare better? Also someone else mentioned that the Penn Central Merger was poorly timed. Atlantic Coast Line merged with Seaboard one year prior to the PC merger and SCL had a lot more success than PC. Why was that?
Modeling the Pennsylvania Railroad in N Scale.
www.prr-nscale.blogspot.com
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