CSSHEGEWISCH 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.
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.
They wouldn't have made it a decade. The core of their traffic base, Ford in Mahwah, steel in Youngstown and UPS would have gotten clobbered. Mahwah closed, steel in Youngstown died and a patched up Conrail would have stolen the UPS traffic with faster service.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
cacole One of the biggest problems with the Penn Central creation was that it merged two parallel railroads who served the same industries and towns.
One of the biggest problems with the Penn Central creation was that it merged two parallel railroads who served the same industries and towns.
Yes but so did SCL.
Modeling the Pennsylvania Railroad in N Scale.
www.prr-nscale.blogspot.com
PS. Of course from the very beginning of the Broad Way of Public Works the intent was to compete with the Erie Canal. And that competition continued with the Pennsylvania Railroad building the Horseshoe Curve and then acquiring lines west to Chicago and the New York Central's water level route to the Windy City.
cacoleOne of the biggest problems with the Penn Central creation was that it merged two parallel railroads who served the same industries and towns.
I don't see how that particular factor was a problem. It seems to me that merger should have allowed elimination of many duplicate services.
carnej1It also didn't help that PC's management, rather than working together, split into two warring factions (former PRR vs. former NYC) and the very high ups seemed more interested in the Corporations non-rail businesses (Real Estate, ect.) than fixing the schism..
I think that is a perceptive observation and a comment on what can happen in private or public enterprises.
John WR MP173My guess is that PC might have had a chance if New Haven wasnt forced upon them at the alter. The New Haven was a millstone around the Penn Central's neck.
MP173My guess is that PC might have had a chance if New Haven wasnt forced upon them at the alter.
The New Haven was a millstone around the Penn Central's neck.
It also didn't help that PC's management, rather than working together, split into two warring factions (former PRR vs. former NYC) and the very high ups seemed more interested in the Corporations non-rail businesses (Real Estate, ect.) than fixing the schism..
"I Often Dream of Trains"-From the Album of the Same Name by Robyn Hitchcock
The ACL still had several branches in Florida, but only the lines to Naples and Sarasota still had passenger service, besides the lines into St. Pete and Tampa. By the way, did you ever look at how the last passenger line into St. Pete wandered around?
It did not take long for the SCL to "rationalize" many of its lines, especially in Florida, and, after the inception of Amtrak, abandon quite a bit of track that had carried passenger trains through 30 April-1May.
Johnny
There are a number of reasons why the SCL worked and PC didnt. We have discussed all the reasons PC failed including passenger train losses, too many track miles, loss of business, labor agreements, mismanagement, etc.
Let's look at SCL.
In 1961: In 1966
Tons Revenue Net Tons Revenue Net
SAL 51m $157m $12m 61m $188m $16
ACL 54 $162 $10m 75m $216 $22
PRR 153m $820m $3m 183m $908m $45m
NYC 123 $612m $-12m 139m $670m $50m
I couldnt find the New Haven data in my Moody's, but my guess is they were bleeding $$$. The PRR and NYC were not healthy in the early 60's and why they showed profits in 1966 is beyond me. Perhaps there was some polishing of the books to make the merger look good.
Clearly the south was in growth stage, particularly the ACL as their tonnage grew by nearly 40% in the 6 years.
While the SCL had passenger trains, they did not have commuter trains to contend with and my guess is that their passenger operations were much more cost efficient than PC. People just were not traveling by train from New York/Washington/Philly to Chicago/St. Louis in the late 60's while people WERE traveling by train from those markets to Florida. Dont know why but they were.
There were fewer branch lines on the SCL, one theory is that the civil war destroyed much of the redundant railroad infrastructure in the 1860s...not sure if that is accurate or not, but few branch lines certainly helped.
No doubt there was a smoother integration of SAL and ACL than of the PC components. That was probably huge.
My guess is that PC might have had a chance if New Haven wasnt forced upon them at the alter. Not much of a chance, but with proper care and feeding PC might have made it.
Ed
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?
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.)
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.
The Lehigh Valley Railroad, the Route of the Black Diamond Express, John Wilkes and Maple Leaf.
-Jake, modeling the Barclay, Towanda & Susquehanna.
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 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 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?
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.
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.
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.
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
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.
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.
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.
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.
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.
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.
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.
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.
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
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 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 ?
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.
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.
Our community is FREE to join. To participate you must either login or register for an account.