The Penn Central Railroad, "High Speed Service"

Penn Central began the mega-merger movement as we know it today but the ill-fated railroad also marked a low point in America’s railroading history. When the PC collapsed in 1970 it began a very rough decade for the industry and would leave many wondering if railroading was even still a viable, competitive means of transportation. By the time the decade ended, PC and the two powerful railroads that comprised it, the Pennsylvania and New York Central, were gone along with virtually every other Northeastern carrier, including several others across the country that began to also disappear into mergers.   Despite the resounding failures of the system there were some good things which came from it. First and foremost the collapse was a wake-up call to the government that assistance was desperately needed to not only save Northeastern railroading but also the industry as a whole.

A year following the railroad's bankruptcy, Amtrak was established as a federally assisted railroad company to take over the private railroads’ intercity passenger trains and most were quite happy to rid themselves of the service.  Soon realizing that Penn Central’s problems were far too entangled and complicated for the railroad to stabilize itself as well as recognizing that it was threatening total shutdown, Conrail was created and began operations on April 1, 1976 taking over the remnants of the PC and several Northeastern carriers. Just four years later in 1980, the Staggers Act (named after Republican Harley O. Staggers of West Virginia) was created and signed into law, which allowed for enormous deregulation of the railroads (such as allowing carriers to enter into contracts with shippers to set prices and services, without ICC approval. 

What would eventually lead to the creation of PC began as early as the latter 1950s when the Pennsylvania Railroad began looking for a merger partner to help right a sinking ship. By the 1950s the Pennsylvania was very sick, although few except upper management knew this. As Northeastern traffic dried up from a loss of industry and competition (due mostly to planes and trucks) the handsome profits the Pennsy was used to were no more with passenger losses, particularly dragging down the company. Its savior to offset these massive deficits was its controlling interest in the Norfolk & Western, which was a black diamond specialist hauling coal from the hills of West Virginia and Kentucky to Virginian ports at Norfolk.

Contrast this to the New York Central, which under the guidance of railroading man Alfred Perlman was not only back in the black and slashing its operating ratio but also looking for a suitable partner to increase its marketing position and cut costs even farther (Perlman was an excellent manager who recognized many cost-saving and profit-earning measures which are still used today, such as high speed COFC service). This partner certainly did not include the Pennsy and realizing that he was under pressure by the NYC board to find someone began looking for the best possible suitors (while once again earning profits, the NYC was still not healthy enough to survive independently for the long-term).

The NYC was particularly interested in the Baltimore & Ohio, which would open up the railroad to new southern markets, particularly the very lucrative coal traffic the B&O held in northern West Virginia and parts of Pennsylvania, Maryland, and southeastern Ohio.  While a fight for the B&O ensued between the NYC and Chesapeake & Ohio, the NYC’s bid to secure the B&O failed as the railroad was awarded to the C&O, mostly on the grounds that the investors were distrustful of the NYC and that once it had gained control of the B&O would merge it into its system and completely out of existence (which was partially true).

With the B&O no longer an option, all other southern lines were either not interested or not appealing and with the board pressuring for a merger Perlman began to realize the that the Pennsylvania was likely the only optional partner. Many in the industry and those who understood it, realized that if such talks were underway at least one of the railroads was extremely desperate and the likelihood of such a union being successful was highly doubtful. - Everyone knew that the two were bitter rivals. How could such a merger be successful?

In the end it was eventually decided that a merger with the PRR was the only option for the New York Central. Surprisingly the ICC approved the merger that virtually allowed for a monopoly in the Northeast and the Penn Central Corporation was born on February 1, 1968.  Aside from that fact that the new railroad literally began to fall apart from the very beginning, other problems resulted as a condition of the merger. First, the PRR was forced to divest itself entirely of the lucrative coal earnings it was siphoning from affiliate, Norfolk & Western. Second, the new railroad was forced to take on the New York, New Haven & Hartford, a commuter-heavy operation between New York and Boston that was in shambles itself and PC was in no condition to take on a bankrupt carrier.

With a merger that was not only a terrible fit but also unplanned it comes as no surprise that the situation resulted in bankruptcy. To make matters worse the NYC and PRR could not have had more opposite corporate cultures. The management of the New York Central System was more laid back, open to new ideas, and the chain of command was “loose” so to speak (one reason for its renewed success in the 1950s under Perlman) whereas the PRR was extremely strict, new ideas were shunned and looked down on (the railroad was still using practices that had been out-dated since the 19th century!), and orders came down through the chain of command. Naturally, then, these two management teams did not get along at all and pure hell and pandemonium resulted across the entire system.

The PC was losing over $1 million a day and trains were becoming lost throughout the system, as dispatchers were not properly trained on how to dispatch their trains. To make matters worse as the red ink began to become an unstoppable flash flood maintenance was deferred and derailments became the norm with large sections of main line reduced to 10 mph slow orders and freight snarled to a crawl.  After only two years since its creation and financial assistance completely gone, the destitute Penn Central officially declared bankruptcy on June 21, 1970. The result of this was a ripple effect throughout the entire Northeast, as other railroads, which depended on the PC to ferry traffic, no longer had a means to move their freight. It became so bad that the railroad was facing total shutdown if financial assistance were not located. 

Diesel Locomotive Roster

The American Locomotive Company

Model Type Road Number Date Built/Previous Owner Quantity
FA-11300, 1319, 1330-1333Ex-NYC/NYNH&H6
FA-21302-1313, 1345-1399Ex-NYC67
C4252416-2446, 2450-2459Ex-PRR/NYNH&H41
FB-23323-3372, 3393-3397Ex-NYC/NH55
FB-13368, 3390-3392Ex-NYC/NYNH&H3
RS25207, 5210, 5212, 5215, 5221, 5229, 5401, 5461Ex-NYC/LV8
RS35203, 5205, 5223-5352, 5400-5409, 5411, 5413-5416, 5418-5484, 5500-5555, 5557-5598Ex-NYC/PRR/NYNH&H312
RS117600-7608, 7617-7654, 7660-7674Ex-NYC/PRR/NYNH&H60
S19300-9347, 9382-9394, 9405-9406, 9408, 9412-9459, 9461-9470, 9486-9499Ex-NYC/PRR/NYNH&H136
S39348-9380, 9395-9402, 9473-9485Ex-NYC/PRR54
S29600-9661, 9704-9727, 9731-9732, 9778-9787, 9802, 9804-9814, 9816, 9818-9821, 9824-9828, 9836-9842, 9850-9860Ex-NYC/PRR/NYNH&H138
S49663-9703, 9729, 9730, 9733-9765, 9768-9777, 9788-9801, 9803, 9815, 9817, 9822, 9823, 9830-9834Ex-NYC/PRR110
RS3m9950-9984(RS3s Repowered With EMD Prime Movers)35

The Baldwin Locomotive Works/Lima Locomotive Works

Model Type Road Number Date Built/Previous Owner Quantity
DS-4-4-7507886-7893, 7900-7913Ex-PRR22
DRS-4-4-10007914-8046, 8050-8053Ex-PRR137
LS-1000 (Repowered With EMD Prime Mover)8062-8063Ex-NYC2

Electro-Motive Division

Model Type Road Number Date Built/Previous Owner Quantity
F3A1400-1425, 1617-1635Ex-PRR/NYC45
F7A1440-1538, 1636-1873, 1878-1879, 1900-1906Ex-PRR/NYC/D&RGW346
GP352250-2351, 2353-2399Ex-PRR/NYC149
F7B3423-3442, 3478-3479, 3508-3563, 4150-4163Ex-PRR/NYC/D&RGW92
F3B3443-3474, 3500-3507Ex-NYC/PRR40
E7A4000-4035, 4200-4245Ex-NYC/PRR82
E8A4036-4095, 4246-4328Ex-NYC/PRR143
GP75600-5712, 5719, 5738-5812, 5818-5827, 5840-5892, 5895-5927, 5950-5959, 7348, 7369, 7380, 7420, 7452, 7519Ex-NYC/PRR/P&LE301
SD406040-6104 (Ex-PRR), 6240-62841971110
SD456105-6234 (Ex-PRR), 6235-62391968140
GP97000-7269, 7300-7327, 7346-7475, 7500-7518, 7530-7559Ex-PRR/NYC/NYNH&H377
NW28647-8678, 8683-8704, 8750-8773, 8795-8810Ex-PRR/NYC/IHB92
SW78836-8855, 8872-8874, 8880-8910, 9035-9041, 9045-9049, 9061-9094, 9097-9098Ex-NYC/IHB/PRR112
SW98911-9001, 9042-9044, 9059-9060, 9095-9096, 9113-9133Ex-NYC/PRR119
SW12009009-9034, 9050-9058, 9180-9199Ex-PRR/NYNH&H55
NW2u9075, 9099-9111, 9133, 9150-9152, 9154-9179Ex-PRR NW2s43
SW15009223-9227 (Ex-IHB), 9500-95831971-197389

Fairbanks Morse

Model Type Road Number Date Built/Previous Owner Quantity
H16-445100-5112, 5150-5174Ex-PRR/NYNH&H38

General Electric

Model Type Road Number Date Built/Previous Owner Quantity
U25B2500-2569, 2600-2658, 2660-2685Ex-NYC/PRR/NYNH&H155
U30B2830-2857, 2860-2889Ex-NYC58
U33B2858-2859 (Ex-NYC), 2890-2970196883

Realizing the severity of the situation the federal government stepped and setup the Consolidated Rail Corporation, which comprised the skeletons of several bankrupt Northeastern carriers, and began operations on April 1, 1976. With federal backing Conrail began to slowly pull out of the red ink (it took many years) and by the late 1980s was a profitable railroad after thousands of miles of access trackage was abandoned and/or upgraded.  While Conrail was able to make a profitable railroad from the skeletons of several Northeastern carriers, today even it is no longer with us being split up amongst CSX Transportation and Norfolk Southern in 1999, with CSX taking much of the NYC while NS got a good chunk of the Pennsy. In any event many parts of both the New York Central System and Pennsylvania Railroad continue to serve an important role in moving goods (and people) from eastern markets to the Midwest and vice versa.

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