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Pennsylvania Railroad Lines West Vol 1 Pittsburgh to St Louis 1960-1999
Pennsylvania Railroad Lines West Volume 1 by Steve Hipes and David Oroszi Hard Cover 2004 136 Pages
This book is not intended to be the definitive history of what happened to the Pennsylvania Railroad west of Pittsburgh. Our objective is to present a relaxed overview, in words and photographs, of the evolution of Pennsy lines. Although we draw information from employee timetables, bulletin orders, train schedules and other railroad documents, this book is not a venture into the nitty gritty minutia of the details of these changes according to railroad administrative records.
Our story begins during the final years of PRR operation in the 1960s, proceeds through the low points of the Penn Central era and concludes with the amazing turnaround of the property by a one-time, quasi-governmental organization known as the Consolidated Rail Corporation. Our story stops as the clock strikes midnight on June 1, 1999, the date that most of the assets of Conrail were divided between CSX and Norfolk Southern. We have not completely ignored the "unmerging" of Conrail, however, as a postscript brings the story to its current, but not final, end.
The idealized view of the Pennsylvania Railroad was that of a transportation behemoth whose rails were the veins of American industry. Yet, in the twilight of its existence during the 1950s and 1960s, the Pennsylvania Railroad was, in the words of railroad historian Stephen Salisbury, "A marginal operation." The glory days of the "Standard Railroad of the World" were gone. PRR's long-term debt exceeded one billion dollars and the company remained solvent only through revenues from non-rail holdings and from dividends of its ownership of 33 percent of the Norfolk & Western Railway. Despite the company's reputation as a cornerstone of American commerce, the future looked bleak.
As Scott Lindsey suggested in his forward, PRR's transition from a transportation powerhouse to a Sunday evening bankruptcy did not happen overnight. The roots of PRR's problems are complex and varied. A few paragraphs in one chapter of this book cannot begin to cover all aspects that contributed to decline of the Pennsylvania and northeastern railroading in general.
The Pennsylvania's problems can be traced to the 1920s. During this tumultuous decade, industry and population began to migrate from the Northeast and Great Lakes regions to the Sunbelt states in the Southeast, Southwest and West Coast. These movements were baby steps compared the exodus that would occur after World War II. Nevertheless, it was clear that in the years following World War I, a fundamental change in the economic and social geography of the United States had commenced.
The "Roaring `20s" also saw America's love affair with the automobile reach full bloom. The mass-produced Ford Model T and low cost competitors made it possible for the middle class to own a car and enjoy the mobility previously available only to the rich. The proliferation of automobiles created a demand for improved highways. State, local and federal government reacted to this demand and the great American highway construction boom began. The Lincoln Highway, later to become US Route 30, essentially paralleled the PRR from New York to Valparaiso, Indiana, while the National Road, the future US Route 40, seldom strayed far from the rails of the Panhandle between Columbus and St. Louis.
Improved highways also led to the explosive growth of the fledgling trucking industry. The motor carriers successfully competed with rail for high-value, time-sensitive shipments. These shipments previously went via the railroad's express or Less Than Carload (LCL) service. At this early stage, PRR's transit times were often faster than a truck's over-the-road times. The drawback to LCL and express service was they were labor intensive, handled the material a minimum of six times versus twice on a truck and could not match the door-to-door service provided by trucks.
The Great Depression hit PRR hard since a vast amount of heavy industry was concentrated along its right-of-ways. Some of these industries curtailed operations until better times returned, but many vanished forever. Carloadings dropped to record low levels. Somehow, PRR managed to make a profit and pay a dividend, something few other companies could do during these times of economic hardship.
The Second World War not only pulled the United States out of the depression, it also created the most powerful economy in the world. The Pennsylvania, with its multi-tracked main lines linking the East Coast and the industrial heartland of the nation, was perhaps the main artery for the movement of manufactured goods, military material and manpower bound for Africa and Europe. PRR's performance during the war was spectacular.
Freight carloadings and passenger revenue reached an all-time high. This stellar performance, however, came at a high price as the railroad's physical plant, locomotives and car fleet were left battered and worn out.
The post-World War II economic boom, which focused on the production of consumer goods, bypassed the railroads of the Northeast. The increased migration of industry and people from the Northeast to the Sunbelt left PRR with a shrinking traffic base at a time when it desperately needed growth to rebuild its infrastructure. A dark cloud was cast on the company's Centennial celebration in 1946 when the railroad reported a loss for the year.
By the 1950s, dieselization and a modest modernization and reduction of the physical plant helped PRR reduce operating costs. At the same time, the railroad began to explore other sources of income, such as real estate. While PRR was struggling to get its house in order, construction of the government-subsidized interstate highway system improved over-theroad transit times and accessibility, thus increasing trucking's share of the transportation market. By 1960, trucks were transporting 21.7 percent of the intercity tonnage moved in the United States while rail's share declined to 44.1 percent, down from 56.2 percent in 1950. It was during this time that rail's now-familiar role of bringing in raw materials with their lower profit margins while trucks hauled away the highly profitable finished products was established. LCL traffic was in a sharp decline and would vanish by the late 1960s.
While railroads lost market share to trucks, Congress and the Interstate Commerce Commission (ICC) refused to consider any reform to railroad regulatory laws, many of which dated to the days of Vanderbilt and Morgan. Regulation had been viewed as a necessity to protect the public from the enormous power wielded by the railroads. Times changed; the days of railroad domination were long gone, yet the ICC remained steadfast in preserving the existing structure. Railroads were not free to adjust or negotiate rates to match the needs of providing a particular service.
Although PRR's freight operations remained profitable until 1963, deficits from passenger and commuter operations eroded those profits. The traveling public rejected the passenger train in favor of the airliner or the family car, modes that used government-subsidized airports and highways. The ICC and state agencies refused to permit the discontinuation of many lightly patronized passenger trains, since such service was considered to be "in the public's interest." Again, PRR suffered more than other railroads because it operated the most extensive passenger and commuter operation in the world.
All railroads in the Northeast encountered problems due to economic change, high taxes, excess capacity, inflexible and outmoded work rules, high labor costs, lost market share to trucks and passenger deficits. To combat the decline, the region's railroads embraced merger. The idea was, if redundant capacity could be eliminated, a lean, profitable network would emerge. The concept of a Pennsylvania-New York Central merger was first broached in 1957 when James Symes, Chairman of the PRR, called Robert Young, Chairman of the NYC. Young, the financier who once dreamed of revitalizing the passenger train, liked the idea. Alfred Perlman, the President and true master of the Central, wanted nothing to do with the Pennsy. But Young was the boss, so preliminary merger talks commenced. After Young's suicide in January 1958, Perlman became chairman and ended merger talks with the PRR.
Although Alfred Perlman was against a PRR merger in 1958, events beyond his control were about to reshape the face of northeastern railroading. In 1960, the Erie and Delaware, Lackawanna & Western, whose main lines paralleled each other between northern New Jersey and Buffalo, merged to form the Erie-Lackawanna. Two years later, the Chesapeake & Ohio took control of the Baltimore & Ohio. NYC sought inclusion in the future Chessie System but C&O wanted nothing to do with the Central. Norfolk & Western, with the blessings of its majority shareholder, the Pennsylvania, expanded westward by merging with the Nickel Plate and leasing the PRR-controlled Wabash. Only PRR and NYC were without partners. Alfred Perlman had resisted a PRR merger, but in the end he had no choice.
Stuart Saunders, chairman of the N&W and the architect its expansion, was summoned to Philadelphia to replace the retiring Symes. Saunders' mission was two-fold. First, since he successfully guided the N&W through the 1959 Virginian merger and did most of the work leading to the NKP/Wabash merger, Saunders was expected to use his considerable political and social skills to achieve a PRR-NYC merger. Second, and perhaps more importantly, he was expected to restore PRR's profitability. Saunders believed a merger would achieve significant cost savings and reverse the fortunes of the rail operations. However, the real key to PRR's return to dominance would be an aggressive diversification program that would turn the company into a conglomerate.
When PRR-NYC merger talks commenced in 1962, one of the justifications of the union was the elimination of parallel routes. As the planners shaped the future railroad, New York Central routes were often favored over PRR lines in Ohio, Indiana and Illinois, due to aspects of the physical plant such as gradient, curvature, signaling and terminal facilities. NYC had embarked on a modernization program during the 1950s that saw the installation of Centralized Traffic Control (CTC) on several main lines and the construction of modern classification yards at Indianapolis, Cincinnati, Youngstown and Elkhart.
Among the routes recommended for downgrading were key PRR main lines such as the Panhandle through Richmond, Indiana, and the Little Miami north of Cincinnati. Even the Fort Wayne Line, PRR's main line to Chicago, would become a secondary main line, losing most of its traffic to NYC's Chicago Line and its classification yard at Elkhart.
Opposition to the merger came from government, business, labor and other railroads. All believed this union would create a powerhouse that would dominate the region's transportation and industrial policy. The truth was, this merger was a desperate attempt by two historically proud, but financially sick, organizations to survive. Stuart Saunders worked his magic and the ICC approved the merger on April 27, 1966. Saunders' famed negotiating skills would later be called into question. Desperate to pull-off the merger, he often gave in to demands that were outrageous, such as his deal with labor that guaranteed PC employees at the time of the merger a job for life or accepting the moribund New Haven as a condition of the merger. On February 1, 1968, after last minute objections had been brushed aside, the Pennsylvania New York Central Transportation Company, better known as the Penn Central, became reality.
Of course, the Penn Central did not survive. Many factors contributed to PC's decline and fall, including corporate in-fighting, financial mismanagement and a failed diversification program that would later be questioned in Congress. For the reader interested in the details of PC's decline and fall, we suggest Joseph Daughen and Peter Binzen's The Wreck of the Penn Central (Brown, Little, Brown, 1971), Railroad Mergers and the Coming of Conrail by Richard Saunders (Greenwood Press, 1978) or No Way to Run A Railroad by Stephen Salisbury (McGraw Hill, 1982).
Out on the high iron, there was little money for basic track maintenance, so the physical plant fell apart. An operational breakdown, created in part by a rush to bring projected merger savings to the bottom line, ruled out a track reduction program. Even after PC's bankruptcy on June 21, 1970, the ICC rejected the large-scale abandonment that might have helped save the railroad. The rationalization envisioned by Penn Central was left to Conrail once the proper regulatory environment was established following the passage of the Railroad Revitalization and Regulatory Reform Act (4-R Act) of 1976 and the Staggers Rail Act of 1980.
The creation of the Consolidated Rail Corporation was the manifestation of the Regional Rail Reorganization Act (3-R Act) of 1973, which created the mechanism that would combine the Penn Central and five other bankrupt railroads into a single, for-profit company. Conrail started pruning its system on Day One (April 1, 1976), but merger-related congestion, strong traffic levels and political manipulations prohibited wide scale abandonment. In its early years, Conrail fared no better than Penn Central, losing a million dollars a day at its lowest point during 1977.
The task of extracting Conrail from a sea of red ink fell to L. Stanley Crane, who assumed Conrail's top post in January 1981 after retiring from the Southern Railway. Mired in the economic wreckage of the worst recession since the Great Depression and facing a hostile Reagan administration that wanted the "Conrail problem" resolved quickly, Crane went to work. Conrail abandoned or sold thousands of miles of track, cut employment by more than half, spun off commuter operations to government and concentrated on business that was profitable, leaving the rest to trucks or other railroads. The process caused considerable pain to employees and customers, but it worked. Conrail turned its first annual profit in 1982.
The Department of Transportation put Conrail up for sale in 1983, initiating a three-year battle for control of the railroad. This first contest for control of Conrail is fodder for a book, and Albro Martin's Railroads Triumphant (Oxford Press, 1992) provides a good overview. Conrail remained independent, and the final act of the resurrection of Northeastern railroading came on March 25, 1987, when Conrail became a publicly traded company.
The Conrail of the 1990s was a lean, efficient, and profitable transportation machine -- the kind of operation PRR and PC never had the chance to become. The success of "Big Blue" led to the second battle of Conrail, which ended the railroad's independence when it was acquired and divided by CSX and Norfolk Southern. It is highly doubtful that any of the planners from the United States Railway Association, the organization that planned and implemented Conrail, dreamed that out of the ruins of the Penn Central would come a railroad whose stock would sell for $110 a share in 1998.
Many of the physical characteristics that endeared the Pennsy to rail-fans vanished or were modified almost beyond recognition during the 31 years between the end of the Pennsylvania Railroad and the end of Conrail. The following pages document the evolution of a group of rail lines from a time when Tuscan Red locomotives wore a golden keystone, through a period of bankruptcy, black paint and "Worms In Love" to an era of blue "Techno Toasters" boldly proclaiming Conrail Quality to any trackside observer.
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