PC: Re: Re: PC, Conrail and the Facts of Life

["Patrick Harris" <seaboardempire@xxxxxxxxxxxxx>]

Well said. History should not be cheapened or discolored by emotions 25
years stale. I hated the concept of ConRail in 1976 (when I was 14) and have
grown to understand its necessity (now at 39). That is called growing up,
and a number of railfans would do well to try to do the same. Again, well
said, Weldon.

Patrick

----- Original Message -----
From: weldon <weldon -AT- fastol.com>
To: <penn-central -AT- smellycat.com>
Sent: Monday, August 27, 2001 12:49 PM
Subject: PC: Re: PC, Conrail and the Facts of Life


> A brief history lesson...
> Conrail stock had been held in a trust from 1976, was a private
corporation
> from the beginning, and was Never "the government".  The feds bought
> securities in the corporation to provide cash, but NEVER had a hand in the
> management decisions that ultimately lead to the successful public
offering
> in 1987.   (Incidentally, the stock was originally offered at $35, and
sold
> to NS and CSX at over $70.  Yeah, Conrail was a real flop.)   The boards
> were comprised of railroaders and business people, and even Congress was
> held at arm's length.  (Read the legislation that enabled Conrail to form,
> and you'll understand that.)
> If the government had any role in anything, it was the 19th century
> regulations that led to the collapse of the Northeast rail system, and
dern
> near the whole nation's railroads.
> When the northeast industrial economy started to evaporate after the war,
> the regulations forced the railroads to change at a glacial pace, if at
all,
> and at the same time, poured billions of dollars into highways and
airports.
> If they had the de-regulated environment you have today, the survivors
would
> have likely been a solid pairing of the PRR and NW, the NYC and C&O, and
the
> weak sister would have been a grouping of EL, B&O and Reading.  The Lehigh
> would have been absorbed either by the PRR or NYC, and CNJ probably would
> have ended up on the scrap heap, as it pretty much did anyway.  The
Southern
> probably would have ended up paired with one of the northeast systems.
(It
> is interesting to note that this is more or less what we now have
following
> the "divorce" of Conrail.)
>
> The reality is, in an unregulated environment, these probable combinations
> would have still led to layoffs, line abandonments, and facilities
closures
> a helluva lot sooner than 1976.  And probably without the plump pensions
and
> labor gaurantees that Conrail had to honor.
> A lot of these sensible merger talks were underway in the 1950's, and most
> were squelched by the ICC, or killed by useless and draconian conditions
> (can anyone say New Haven?).  That's how NYC and PRR ended up in bed
> together in the first place.
> Instead of creating regional systems that competed with each other, they
> created virtual monopolies in each region, which led to disaster.  Despite
> its 44,000 mile system, there was virtually no line-haul advantage to the
PC
> merger.  New York to Chicago is New York to Chicago.  PC created an
> overlapping system that only added overhead to traffic that was still
going
> to basically the same places.
> PRR-NW would have made considerably more sense, because it would have
opened
> the southeast to the Pennsy, and the northeast to the NW.  It also would
> have been of tremendous business advantage, because the Pocahontas Coal
> fields would have provided the cashflow for the PRR to recover from the
> beating provided by the war traffic.   For some reason, this type of
> combination scared the bejesus out of the regulators, even though the
> interstate system was providing the same kind of regional and national
> advantage for the trucking companies.
> Don't get me wrong, I miss railfanning my favorite roads as much as the
next
> guy, but the economics of the time and the government regulators led to
> their demise, not Conrail.
> Look it up in your Funk and Wagnalls.
> Lee
>
>
>