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  • Conrail 21 Years of History

    By Michael W. Blaszak

    MAIN PHOTO: A Genral Electric C30-7A, one of 50 rostered by Conrial, pulls the SEBO through Palmer, Massachusetts, on a perfect fall day in 1994. ABOVE: With a smile and a thumbs up, Conrial announces its arrival on this 1976 poster. The Conrail Charlie poster also plays a role in Stev Smedley's essay on page 36. "Announcing ConRail. A better way to run a railroad."
    RailNews - November 1997 - Page 28 RailNews - November 1997 - Page 29

    he history of Conrail has enough dimensions to engross the most diffident observer. Unlike most railroads of the 19th century, started by optimistic promoters to develop the wilderness and bring the profit home, Conrail was a product of financial disaster, conceived out of desperation by the federal government. Its mission was to save northeastern railroad service, headed for extinction because of the bankruptcy of seven major carriers. During its first few years, Conrail was widely regarded as a failure-generating huge deficits, despite the billions in federal funds it invested in track and equipment.

    However, four years' operations taught Conrail what additional changes were needed. The federal government responded with two critical pieces of legislation: the Staggers Act, giving Conrail the commercial freedom it had requested to change rates and eliminate unprofitable traffic, and the Norhteast Rail Service Act, allowing the railroad to shed unneeded employees, services, and routes to reduce costs. Led by new Chairman Stanley Crane, Conrail roared into the black during the early 1980s, allowing a delighted Reagen Administration to sell the railroad back to the private sector. If not for one man, Rep. John Dingell, Conrail probably would have been bought by Norfolk Southern back in the mid-1980s. But rail labor opposed the deal, encouraging Democrat Dingell to use his powerful position to block it.

    Instead, Conrail was sold to the public in 1987, becoming America's seventh-largest investor-owned railroad. The remainder of Conrail's history was pure private enterprise. Struggling to increase its business, Conrail chopped costs and transferred marginal trackage to short lines during the 1990s to maintain profits. Meanwhile, the western railroads consolidated into two huge systems that considered merging their way east of Chicago and St. Louis-an advance that would likely be fatal to Conrail, whose profits depended on hauling freight to and from these gateways. In response, Conrail tried to force its way into Texas to control chemical shipments into the east. Federal regulators, though, saw no public benefits in that, sealing Conrail's fate.

    Norfolk Southern had never relinquished its ambition to aquire Conrail, but Conrail's last leader, David LeVan, bitterly resisted NS's takeover proposals. On October 15, 1996, LeVan unveiled a plan to merge Conrail with CSX, preserving Conrail's management team. Within a week NS submitted a higher bid to buy Conrail. CSX couldn't win approval and ultimately was forced to divide Conrial with NS at NS's price. Conrail became a jointly owned subsidiary of CSX and NS in June 1997 and, barring unexpected regulatory action, will disappear into those two systems in 1998.

    Our timeline begins as Conrail's principal predecessors first evaluate the prospects of joining forces, a revolutionary plan that would end in colossal failure and lead to Conrail's creation...

    RIGHT: An Erie Lackawanna F7 is scrapped at McCook, Illinois, in 1977. At one time, federal regulators had hoped EL would serve as a competitor to Conrail. These hopes were dashed when EL went into bankruptcy and joined the Conrail system. BELOW: This former EL SD45 readily wears the Conrail initial. ABOVE: Conrail GP30 2177 pounds through Blue Island, Illinois, in July 1977. LEFT: During Conrail's early days, its meager corporate image was a crude "CR" painted on equipment. Later, Conrail blue became its herald. LEFT: It's July 1978, and Conrail is just three months old as this SD40, still in full Penn Central dress, leads a local at Bellwood, Illinois. BELOW: A pair of husky Alcos powers an empty ore train at Girard, Ohio, in April 1978.
    RailNews - November 1997 - Page 30 RailNews - November 1997 - Page 31

     

    ABOVE: A westbound TV train crosses the Beaver River bridge in Beaver Falls, Pennsylvania, on April 28, 1997. RIGHT: A depot window in Elkhart, Indiana, frames an approaching Conrail train on a bleak September day in 1993. LEFT: A shadow from its long-lost past is glimpsed on the worn side of a hopper car at East Peoria, Illinois, in January 1997. BELOW: C40-8Ws 8183 and 6260 cross the ancient stone spans of a bridge in Ouncannon, Pennsylvania, on April 29, 1995.
    RailNews - November 1997 - Page 32 RailNews - November 1997 - Page 33

    Article Details

    • Original Author Michael W. Blaszak
    • Source RailNews
    • Publication Date November 1997

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