The Lehigh Valley Railroad was another of the many Northeastern carriers built to move anthracite coal from eastern Pennsylvania. So, its motto, Route Of The Black Diamond, was quite befitting and led directly to both its rise in prosperity and downfall into bankruptcy. The LV has also gained quite a following by those who study the industry; it utilized an interesting variety of paint schemes while providing services ranging from rural branch lines to hotshot, time freights. Unfortunately, the LV lived a roller-coaster existence throughout the 20th century.
The Great Depression hit the company particularly hard and it struggled to make ends meet after World II, postings its last profits during the 1950s. It was one of the numerous bankrupts rolled into Conrail whereupon its routes were considered superfluous. Today, much of the LV is but overgrown paths and walking trails; a sad end to one of the Northeast's most fascinating railroads.
The Lehigh Valley can trace its heritage back to northeastern Pennsylvania and the great Anthracite coal rush that began with the Lehigh Coal Mine Company in 1792 and expanded during the War of 1812. Once this very hard, clean-burning product was discovered many individuals put projects into motion for its transportation to the Northeast's great metropolitan regions as a source of heating fuel. Two of the earliest successful ventures were the Lehigh Coal & Navigation Company of 1822 and the Delaware & Hudson Canal Company of 1823 (later the Delaware & Hudson Railway). The direct predecessor of the Lehigh Valley was the Delaware, Lehigh, Schuylkill & Susquehanna Railroad incorporated on September 20, 1847. It was projected to run in direct competition against the successful LC&N (under the guidance of Josiah White), which operated mines near Summit Hill, Pennsylvania. From there the anthracite was moved down the Lehigh and Delaware Rivers (later operated as part of the Lehigh and Delaware Canals) via barge to Philadelphia.
Unfortunately, the DLS&S was having difficulty raising capital, in part due to the efforts of the LC&N. Its fortunes finally turned when Asa Packer breathed new life into the operation. Packer carried the vision to see much of the Lehigh Valley system in place before he passed away on May 17, 1879. He was born on December 29, 1805 in Mystic, Connecticut and spent his early life as a carpenter and eventually settled in Mauch Chunk, Pennsylvania (now known as Jim Thorpe), along with his wife, Sarah. Packer became a successful operator and builder of canal boats for the LC&N, a strange twist for an individual who later earned his wealth in the railroad industry. Using his financial success, and with the help of investors, he acquired the DLS&S charter and renamed it as the Lehigh Valley Railroad in 1853. What was once a sputtering idea now wasted no time constructing a 45.7-mile line from Mauch Chunk to Easton; according to Mike Schafer's book, "More Classic American Railroads," the route officially opened for service on September 12, 1855.
Initially, the southern terminus of Easton meant coal would once more require a transfer to barges and either travel down the Delaware River to Philadelphia or cross the waterway for shipment east towards New York. That changed once a bridge was completed into Phillipsburg, New Jersey. The Easton/Phillipsburg area remained an important interchange location where the LV; Central Railroad of New Jersey; Lehigh & Hudson River; Pennsylvania (Bel-Del Division); and Delaware, Lackawanna & Western all met. Packer's system now held an all-rail route into the Northeast's metropolitan regions and spent the next several years eyeing western growth. In 1864 his railroad opened 23 miles above Mauch Chunk to White Haven and then acquired the moribund Beaver Meadows Railroad & Coal Company. This little system was originally chartered on April 7, 1830 to serve mines near Beaver Meadows, Pennsylvania for the transportation of coal to Easton. Its plan was similar to the LV's but its promoters' hopes never made it beyond a bit of grading work.
The LV used the old charter to tap more mines as it opened similar branches throughout eastern Pennsylvania. Packer's name may not be remembered as widely as Vanderbilt, Huntington, or Gould but he was a true visionary and adept businessmen who worked hard to transform his railroad into one of the Northeast's largest. As he continued pushing rails westward a segment of an old canal operation was acquired, known as the North Branch Division of the Pennsylvania Canal (or North Branch Canal), in 1866. This system had been built between 1828 and 1856 with an entire length of 169 miles; it ran from Northumberland to Wilkes-Barre before turning north to the New York state line via Towanda and Sayre (the location of LV's primary shops and maintenance facilities). It utilized the segment north of Wilkes-Barre, a town it had reached via new construction at around the same time. Railroads in development during this period were quick acquire former canal rights-of-way when available as their accompanying towpaths offered a superb, "water-level" gradient that carried few curves.
Packer renamed the property as the New York & Pennsylvania, extending service to the state line at Waverly, New York in 1869 where it interchanged with the New York & Erie (Erie). The NY&E provided an east-west routing across its home state and was once the longest railroad in the country when opened in 1851. The system had been designed to 6-foot, "broad gauge" (or "Erie gauge" as it liked to say) believing that it held advantages in safety, increased tonnage, and as a deterrent against interchange. As the gauge of 4 feet, 8 1/2 inches became the popular choice the NY&E later dropped its 6-foot width in favor of the industry standard. Through the Waverly connection the LV now had an all-rail outlet to Buffalo. This agreement certainly helped and aided in the road's growth although Packer sought his own, direct routing into Buffalo. Unfortunately, LV's founder did not live long enough to see this dream realized although he did lay the foundation by acquiring the Geneva, Ithaca & Sayre Railroad in 1876. This road, started by Ezra Cornell, gave the LV access to Geneva while the line was finally extended into Buffalo during 1892.
Before Asa Packer died he also laid the groundwork for LV's extension beyond the New Jersey state line. For many years it had relied upon interchange connections but as rail competition to the Port of New York intensified it realized it needed its own route. It all began when Packer created the Easton & Amboy Railroad in 1872, which acquired the former charter of the Perth Amboy & Bound Brook Railroad, authorized to develop port facilities at Perth Amboy, New Jersey. Following the completion of the Pattenburg Tunnel the 60-mile corridor, running via Easton/Phillipsburg, officially opened on May 28, 1875. Perth Amboy remained an important terminus for the Lehigh Valley throughout the years although its southerly location placed it a bit too far south of New York. So, the railroad embarked on a northerly extension to the western shore of the Hudson River at Jersey City.
During 1871 the LV acquired the Morris Canal, which provided it waterfront property in Jersey City although the railroad still required building its own rails to the area. To do this it began a branch from its main line at South Plainfield, which extended northeasterly to Jersey City. There very various subsidiaries comprising this project, which later collectively became known as the Lehigh Valley Terminal Railway. In 1891 it opened service to Newark, just across the Hackensack River from Jersey City, where it constructed the large Oak Island Yard. Finally, in 1899 it opened direct rail service to the Hudson River and later built a major waterfront terminal which sat on the northern side of CNJ's Jersey City Terminal. By the turn of the 20th century the LV’s system was largely complete boasting a network of more than 1,350 route miles while its main line stretched 448 miles from Jersey City to Buffalo. Unfortunately, after 1900 the company also had an on-again-off-again battle to maintain profitability.
The Lehigh Valley's control by the Packer family was short-lived after Asa's death. The much more prosperous Philadelphia & Reading (Reading), the richest anthracite carrier alongside the Lackawanna, leased the Lehigh Valley during the early 1890s in an attempt to dominate the anthracite market. The financial Panic of 1893 ended these dreams after the company fell into bankruptcy, resulting in the LV regaining its independence. It was then acquired by banking mogul J.P. Morgan in 1897 who went on to purchase the holdings from the Packer estate, ending their involvement in the company. Morgan's firm remained in control long after his death, during which time the LV was a well-managed, profitable operation. One can reasonably argue that its long decline began with the stock market's collapse in October of 1929. The depression not only weakened the railroad financially but decreasing anthracite demand further hurt its bottom line. In 1928 the PRR began acquiring LV stock and continued to do so throughout the years in an increasingly futile attempt to maintain its investment within the declining company. By April of 1962 it, incredibly, controlled 90% of the road.
While the surge in wartime traffic during the 1940s helped right the ship this was not enough to stabilize the LV's growing financial problems. Realizing it needed to cut expenses and increase efficiency when, where, and however possible the railroad quickly dieselized its motive power fleet with models ranging from almost every manufacturer. It completed the transition in 1951. Interestingly, even as earnings continued to sink (the LV would, sadly, show a profit for the last time in 1956 and paid its final dividend in 1957), the railroad tried its best to remain competitive in various ways; it handled bridge traffic in conjunction with the Delaware & Hudson, introduced pool service with the Nickel Plate Road in 1964, allied with the CNJ in some territories to reduce costs, and introduced high speed intermodal/TOFC (trailer-on-flatcar) trains with names like Apollo and Mercury. While these innovations and ideas were somewhat successful they could not stem the enormous losses mounting by the late 1960s; there was simply too many railroads and not enough traffic. As much as the railroad tried it was unable to reverse its declining fortunes. Its last hope for survival occurred when the PRR and New York Central created the ill-fated Penn Central Transportation Company in 1968.
As part of the merger the LV was offered to either Norfolk & Western or Chesapeake & Ohio, both profitable systems, as a means of maintaining competition in the Northeast (each had connections to the LV at Buffalo). However, each declined due to the LV's light traffic, enormous debt, and declining physical condition. As Penn Central literally fell apart from its first day of service it came as no surprise that just two years later, in 1970, it declared bankruptcy. This move sent shock waves not only within financial circles but also throughout the railroad industry. Its fall helped bring down most other systems in Northeast, setting up a catastrophic situation as the region threatened total shutdown. Faced with the realization of either a nationalized takeover or a reorganization the government was forced to step in. It created the quasi-public Consolidated Rail Corporation, better known as Conrail, which began operations on April 1, 1976. As Conrail created what it deemed the most profitable network from these bankrupt carriers very few lines of the former Lehigh Valley system were utilized. Today, nearly the entire western half of the LV is gone and what remains is operated by the Reading & Northern and Conrail successor, Norfolk Southern.