Firelock76Now at the risk of offending the Pennsy fans out there, if the Pennsy heirarchy was so savvy, WHY did they sell off their shares of the N&W?
Good Morning Firelock,
Sitting around the ol coal stove chatting, ya, bring on a new version of the Baker Heater League, it'd be great.
You asked about the PRR and N&W stock. In 1960 the stock which was held by the Pennsylvania Company received a whopping 14.8 million in dividends from their total holdings which included the Wabash. The railroad that year lost 7.8 million but the investments through the Pennsylvania Company allowed the parent company to again show a profit. This trend continued in upcoming years.
In 1963 PRR president Bevan suggested to keep using the profitability of the Pennsylvania Company to gain low interest loans for the railroad, but some on the Board of Directors did not agree and suggested selling the stock to 1. to retire some of the PRR debt, 2. distribute the stock to PRR shareholders and 3. purchase equipment and improve the physical plant. Another suggestion was to sell the stock to avoid selling additional bonds to keep things moving.
Bevan did not agree to any of it, he insisted on keeping the profitability of the Pennsylvania Company, even if it meant selling N&W stock and purchasing other profitable stock.
After some years of financial disputes and the N&W/Virginian merger sprinkled with other things, it was finally agreed at the insistance of the NYC that the PRR sell its holdings in the N&W and Wabash as a condition the Penn Central merger. The thinking at this time was that the merger would save enough money to offset the loss of the N&W dividends. Wow, was that wrong!
Called the White Sulpher Springs agreement, Stuart Saunders, president of the N&W at that time was happy the PRR's 35% holdings in his company were now terminated. He could move on without worry of the PRR influence in future decisions. As to the NYC, Perlman was always recluctant to merge when the NYC was not the primary company, it was a 60/40 in favor of the PRR. He sadly gave in due to the financial condition of the NYC and always said a PRR merger made no sense. The government nixed several senarios prior to this time and it forced an unfortunate result for both the PRR and NYC.
You mentioned the slow approach of the N&W, it did pay off for them and I agree slow down some and have steam into the 70's, would have been great.
@ Firelock / K4sPRR
Modern steam (not old) continuing into 1970(s) while taking a scrutinizing look at future traction ...
That's about the (hypothetical) scenario I had once spent much thought on for NYC , including a few special ways of managing change of traction during the years of transition - mainline electrification starting with the Hudson division was an important factor in my scenario , however : high first costs / great development scope later , this couldn't have been achieved in a rush , yet would have been beneficial in the long run
But by and large I agree with what you wrote .
Wow , all of a sudden everything's fine and sunshine ! Great ! I love it !
Smiles
Juniatha
@ Thomas : spare parts question
That for sure would have become an increasingly severe problem if you wanted to continue steam traction for ever in an environment of RR using different modes of traction , in fact in an article by N&W ( off hands I'd think it was published in 1953 ?) explaining why they continue with steam they touched that point , however wrote they will turn to 100 % home made products , i.e. locomotives complete with auxiliaries formerly received from specialists .
This is about what I had in mind in my hypothetical scenario of NYC contrived years ago when I had time to do it : scheme retaining major modern steam classes into the 1970s while modernizing tracks , yards and organization and starting to electrify mainlines / dieselize yards and branch lines : at some point around 1952 .. 54 it would have been wise to buy up auxillaries from special manufacturers that give up making them . Since as things were a lot was being scapped , there should have been opportunities for very low price whole sales . (*1) This should have sufficed to keep a shrinking steam fleet going , concentrated at certain traction centers / on certain best suited lines , to phase out final steam around 1972 - 76 .
Regards
Addenda
*1 it seems I should have to specify : buying these parts of course was meant buying them (a) fully machined , ready for installation , or (b) pre-machined as was previous practice , ready to be finalized by RR shop just in time - each case a practice just prolonged , nothing new . By the way , NYC had a big shop , Beach Grove , which could have been equipped with machining tools bought up with the parts themselves from those closing manufacturers . Another possible scenario was to contract overhauls with ALCO when still having steam manufacturing equipment and about to scrap it for change of business . In case of contracting overhauls of all those NYC steam to remain in service for about a further decade or some years over would have provided them extra business at no first costs for a limited time which would have eased financial strains inherent with change to diesel production . This might have been beneficial for both sides in this scenario .
Not every railroad had the shop capabilities of a Roanoke or Altoona, so having to machine your own parts formerly obtained from a specialty firm was not a realistic option for a lot of Class 1's. Even N&W found that making their own parts was not always an economic option.
CSSHEGEWISCHEven N&W found that making their own parts was not always an economic option.
Same was true in Altoona, at times they opt to lease more road ready locomotives from other lines than take on the expense of repairing their own, an unfortunate trait about the individuality of a steam locomotive. The diesel was like a car, common parts available at your local dealer.
Oh certainly, N&W was well aware of the fact suppliers of ancillary items used on steam locomotives were going out of business. Some even offered N&W the blueprints and spec sheets if they wanted to make them themselves, but of course N&W chose not to.
By the way, there's a number of businesses today that specialize in rebuilding steam accessory items, which would indicate to me they were pretty robust to begin with.
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