Re: PC: Another Penn Central Book.

["Tony Fleres" <tonyfleres@xxxxxxxxxxx>]

One of the books being mentioned (not sure which one) was written by David
Bevan. Admittely it might be a little self serving on his part, but it did
put a different perspective on the diversification program.

By the 1960's both railroads were living off investment income. The Central
off it's real estate and the Pennsy off it's 33% ownership of N&W stock,
which it had to sell off over 10 years as a condition of the N&W-NKP merger.
The Pennsy (and later PC) had basically two choices. Either invest the
proceeds directly into the operating assests of the railroad, or try to
duplicate the income stream the N&W dividends were providing. They chose the
latter and the rest is history.

Considering the economics of railroading in the 1960's it probably didn't
matter what they did. Remember, just about all of decisions taken by Conrail
management to turn the railroad around weren't available to PC in 1968. Rate
freedom, line abandonments, commuter subsidies, elimination of full crew
laws, and Amtrak didn't happen until AFTER the bankruptcy.

Tony

----- Original Message -----
From: Jim Kosty
To: penn-central -AT- smellycat.com
Sent: Monday, March 01, 2004 2:27 PM
Subject: Re: PC: Another Penn Central Book.


Mike,
I agree with you about Saunders and Bevan, but it seems to me, from my
research on the subject of the Penn Central problem, that Perlman seemed to
be about the only one in upper management on the PC that had the interests
of the railroad in the forefront.

I know Perlman wanted to modernize things quite rapidly, and maybe he was a
bit overzealous about it at times.  But from reading about Executive Jet,
Buckeye Pipeline, Great Southwest Corporation, Arvada, and some of the other
"diversification" moves the company made, it is apparent that the last thing
the top managers cared about at the time was the rail holdings.