PENN CENTRAL: A WRECK OF A RAILROAD


The Penn Central was born amid great expectations and promises on February 1,1968 by the merger of the New York Central System into the Pennsylvania Railroad on that date.
Neither railroad had been forced through the trauma of bankruptcy and reorganization.
With incompatible computer systems ,signal systems, operating styles, and personalities at the top, the new railroad remained essentially two in operation though it was one in name.
Penn Central

Welcome to our Penn Central WebSite



Here's a preview of some of the exciting projects we have put together for you:

Our feature article: The Story of Penn Central

Penn Central Reference Material

Why Did Penn Central Fail?

Decline of Intercity Passenger Service

Penn Central on the Stock Market

Penn Central Amtrak Stock

New York Central Merchants Despatch .

New York Central Pacemaker Service .

A lot about NY Central's EMPIRE SERVICE. Even more about EMPIRE SERVICE.

Red Ink Express 1959 .

Poughkeepsie Bridge, Cedar Hill versus Selkirk

Harsimus Branch

Penn Central on the Lake Ontario Shore

Story of the Lost Box Cars

Penn Central Map

Derailment in 1976

New England Gateway, The New "Alphabet Route"

Metro-North Commuter Railroad

See KC Jones BLOG about Railroad History

We have a really new and really cool feature about the Central New England Railway / New Haven Railroad. It is a Journal of the Maybrook Yard. All kinds of previously unpublished and fascinating things!
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Why did Penn Central fail?



1.) PC was forced to pay $125 million for the bankrupt New Haven, which had a negative cash flow.

2.) PC was required to operate well over one half of all the passenger service in the US, which by that time had a monstrous negative cash flow. Amtrak only partly relieved this in 1971, as PC was still saddled with commuter service in the New York and Philadelphia areas.

3.) Freight rates and abandonments were rigidly regulated, preventing PC and others from adapting to market conditions.

4.) The "red" and "green" teams were more interested in "oneupmanship" than creating a viable enterprise. No thought had been given prior to the merger, for example, on compatibility of computer reporting systems.

Find out about FEATS and Fairpromise

Penn Central Amtrak Stock



In addition to some neat items, like Grand Central Terminal, the successor to Penn Central owns much of the stock in Amtrak!

When Amtrak was formed in 1971, some railroads got stock for joining Amtrak or giving it equipment. The law that established Amtrak set it up as a for-profit company with stockholders entitled to dividends!

Amtrak stock is owned as follows:
American Premier Underwriters (insurance sub. of Am. Financial Group) 53 %
Burlington Northern Santa Fe Railroad 35 %
Canadian Pacific Railroad 7% (through acquisition of the D&H)
Canadian National Railroad 5% (through acquisition of Illinois Central)

(Note that American Premier Underwriters is the corporate successor to Penn Central.)

It is true that Amtrak stock is not routinely traded; you won't find Amtrak shares on any stock exchange (i.e. NYSE, NASDAQ) - it would be considered an OTC stock, but given the sparsity of trades, you'd probably have to just deal with one of the four above entities directly.

However it is not to say that Amtrak stock cannot be traded - obviously American Premier Underwriters has purchased the shares formerly owned by numerous other railroads - Union Pacific doesn't own any Amtrak stock anymore, for example; nor does Norfolk Southern or CSX. "Anything's for sale at the right price" - and if someone offered the right price, they'd gladly unload their Amtrak stock. The question is, why would you want it; knowing that you have no voting privileges, no representatation on the Board of Directors, no hope for a dividend (publicly traded companies are NOT required to issue a dividend), a stock that cannot be easily traded nor has significant value.

From Amtrak annual report:
"At September 30, 2009 and 2008, 10,000,000 shares of $10 par value common stock were authorized, of which 9,385,694 shares were issued and outstanding. The common stockholders, who acquired their stock from four railroads whose intercity rail passenger operations Amtrak assumed in 1971, have voting rights for amendments to Amtrak’s Articles of Incorporation proposed by the Board of Directors. The Act also required Amtrak to redeem at fair market value the shares of common stock outstanding as of December 2, 1997, by the end of fiscal year 2002. Amtrak has discussed the redemption of the shares with the owners, but there has been no resolution of this matter between Amtrak and the owners. Amtrak believes that the fair market value of the common stock is zero. Nevertheless, in an effort to comply with the Act, Amtrak has made an offer to redeem the stock for cash at a price of $0.03 per share to the stockholders. By a letter dated November 2, 2000, counsel for the four common stockholders responded to Amtrak and rejected the offer as inadequate. Amtrak is considering various courses of action. In May 2008, American Premier Underwriters (APU, formerly known as Penn Central) filed a lawsuit in federal court in Cincinnati, Ohio, asserting that Amtrak has “eroded” the value of common stock and is seeking $52.0 million. APU owns 55% of Amtrak’s common stock. See Note 10".

By Ken Kinlock at kenkinlock@gmail.com
What ever happened to my Penn Central stock? Penn Central gobbled up the stock of New York Central, Pennsylvania and New Haven Railroads. But what ever happened to the company and the stock? Is it worth anything?

Ever hear of American Premier Underwriters?


Find the answer and find out a lot of interesting facts.

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Penn Central Rider Car

Penn Central Rider Car: I found a bunch of photographs from a long time ago. Some of them were from Charlie Gunn which I purchased from him at train shows in Connecticut. I have always been interested in "head end" trains, so this "rider car" really interests me. Incidentally, many of the "Connecticut Stations" photos I have were bought from Charlie.

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Interested in Penn Central? New York Central? Pennsylvania Railroad? New Haven Railroad? or in the smaller Eastern US railroads? Then you will be interested in "What if the Penn Central Merger Did Not Happen". You will also enjoy "Could George Alpert have saved the New Haven?" as well as "What if the New Haven never merged with Penn Central?"
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New York Central Merchants Despatch

Merchants Despatch was owned by the New York Central System.

They entered the refrigerated transit business around 1880 and also constructed a manufacturing facility near Rochester, New York. Despatch Shops).

After a reorganization in November and December 1936, Merchants Despatch Transportation Corporation and Despatch Shops, Inc. became separate wholly-owned subsidiaries of the New York Central Railroad Company. Despatch Shops built and rebuilt freight cars. The car shop was closed down in 1970. MDT owned and operated refrigerator and special service cars. From 1961 to 1966, the company acquired nearly 1,200 autorack cars. MDT also entered the Intermodal freight transport business, and purchased 572 container flats (intended mainly for use in mail service on passenger trains) between 1958 and 1965.
Old Penn Central property

When Conrail took over, Penn Central had a LOT of property to get rid of.

All the great train stations of New York City.

Penn Station in New York City. This beautiful station got "trashed" just before the PC merger.

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Penn Central: Poughkeepsie Bridge, Cedar Hill versus Selkirk


The bridge was strong and very useful but Penn Central wanted the action shifted to the Selkirk hump. The Guys working the New Haven Hump beat the Selkirk computer night after night with cars humped which upset the powers to be. Not until the fire on the bridge deck did the word obsolete remotely fit the bridge. With the bridge gang laid off the previous summer so no one maintained the fire lines in winter allowing the fire to rage pushing the bridge toward scrap. A fire was alowed to burn a good deal of the deck ruining alot of steel. As a result the PC had the excuse they needed to rip out the New Haven west end Hump. Because carloads were diverted to the newer Selkirk humpyard for classification. This in the eyes of the PC railroad made the bridge further obsolete and unworthy of repair.

The distance between Boston and Chicago using the New York Central/Boston & Albany routing was 1,026 miles. The distance between Boston and Chicago using the New Haven's traditional routing via the Maybrook Line and a connection with the Erie-Lackawanna Railroad was 1,226 miles. In other words, a freight car hauled between Boston and Chicago using the routing favored by Penn Central after M-Day instead of the New Haven's traditional routing to the west saved 200 miles of running.

Penn Central's favored western routing was an all-PC operation between Boston and Chicago. The traditional New Haven Routing via Maybrook was a partnership between the NHRR and the Erie-Lackawanna. When Penn Central took a car from Chicago to Boston via the old NYC/B&A routing, it kept 100% of the transportation revenue. When the Maybrook routing was employed, the revenues had to be split up between Penn Central and the Erie-Lackawanna.

Furthermore, on the Maybrook routing the Erie-Lackawanna got a more favorable proportion of the revenues due to its portion of the haul being greater (956 miles between Chicago and Maybrook) than the New Haven's (270 miles between Maybrook and Boston).

There were control issues as well. Penn Central had a reputation for providing poor service and for not knowing where all its freight shipments were at any given time but generally speaking PC had more control over shipments that ran 100% over its tracks than shipments that ran 75% or more of the distance using the tracks of another railroad. The latter case, of course, what what happened when shipments were routed between Boston and Chicago using the old Maybrook Line.

As you can see, Penn Central had a number of sound business reasons for disusing the Maybrook gateway. In fact, the only reason that Penn Central continued to use the Maybrook routing at all after M-Day was that the I.C.C. forced them to do so on behalf of the other railroads (i.e. the Erie-Lackawanna, Lehigh & Hudson River, etc.) that depended upon traffic routed through the Maybrook freight terminal.

By Ken Kinlock at kenkinlock@gmail.com

Empire Service

"THE CENTRAL" was going broke due to the giganic passenger operating cash deficit. Therefore, after much discussion with the various unions, they ALL agreed to the changes based on the following:

A. No initial reduction in passenger crew starts;

B. No changes in T&E operating territories;

C. No mixing of "M&E" (Mail & Express) equipment IN ANY of THE EMPIRIE SERVICE TRAIN consists.

The new operating agreements were silent as to "new" passenger train starts which is why "new" M&E trains began running. The bulk mail business was too profitable to give up to the highway carriers.

The architect of this plan and the main figure on Perlman's management structure who made it happen, i.e., Mr. R.D. Timpany, assistant vice president of operations, 466 Lexington Avenue, New York, NY 10066.

"THE CENTRAL" passenger services were broken down as follows:

1. M&E - bottom line profit

2. Intercity - Passenger Svcs., i.e., beyond Buffalo, NY - breaking even on an out of pocket basis (Operating Profit/Loss) , but a loser on a fully allocated basis (Net/Net).

3. Commuter Services - a Total Loss any way you looked at it. The only reason "NYC" had not tried like hell to eliminate the service north of "GCT" were the feelings of Mr. Perlman and Mr. Walter Grant, chief financial officer, which were "our commuter trains carried the most important people in the World, i.e., those corporate executives who routed freight traffic over our lines." Enough said.

4. Local or Regional Passenger Svcs - Basically a loser except for the The James W. Riely,between Cinti, OH and Cgo, IL (Illinois Central Central Station, Chicago's Lake Front on South Michigan Avenue.
Sadly, the service between Chicago, IL and Detroit, MI was barely breaking even on an avoidable cost basis. But again freight revenues, ( 49% of "CENTRAL" profits can from the Greater Detroit, MI Area in the form of autos and auto related traffic) dictated that we cater to the wants and the needs of the auto executives because they routed the freight business.

5. The Empire Service - we began to finally break even since the opening of The New York Thruway.

6. On a totally allocated basis "THE CENTRAL" began showing a very small profit. The next big challenge was to get state aid and subsidies for the New York "GCT" commuter service along with labor relief. Read even more about EMPIRE SERVICE.

By Ken Kinlock at kenkinlock@gmail.com

Empire Service

Empire Service

Empire Service

Empire Service

Flexi-Flow

Flexi-Van

LCL

LCL

Red Ink Express 1959

To trim its losses, the New York Central Railroad announced that it will pull out of the Railway Express Agency, Inc. Hauling express parcels on its passenger trains, the Central said, accounts for $11 million of the $52 million deficit billed for passenger trains. Said the Central's president, Alfred E. Perlman: "The old method of collecting parcels at gathering points and then loading them onto passenger cars is obsolete." Over the past ten years, air freight, parcel post, bus and truck lines have cut into the Railway Express business.

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Penn Central Movie

This is the movie commissioned by the Penn Central Railroad bankruptcy trustees to try to convince members of Congress that the railroad desperately needed a cash infusion or some other federal intervention if the railroad were to survive.


Think of it as the social media of its day, a corporate movie commissioned as a way of educating elected officials who had little time or inclination to actually visit the railroad to find out what was going on.

In fairness, there are some anecdotes I've heard about the making of this movie, including the fact that some of the really bad conditions just wouldn't cooperate with the filmmakers. So instead of showing actual "standing derailments" (derailments caused by crossties so rotted that the rails just spread apart under the weight of the freight cars), they actually had to stage some of them.

There is a scene of a car derailing as it moves down the "hump" track in a classification yard, and I'm told it took more than one take to get it to derail.

Despite these moviemaker tricks, the facts were pretty bleak for Penn Central.

And the movie did help convince Congress to do the only right thing.

Take control of the company and the other bankrupt railroads, and make something new. Conrail. And considering what the car companies are asking for as an INTERIM solution for just the next three months ($15 billion), Conrail was a bargain at $7.6 billion -- all in.

That's pretty much where the auto industry should be headed. Even as I was preparing this blog entry, I came across the daily agenda in the previous entry showing that GMAC is still taking folks out for expensive breakfast meetings, even as its owners go begging the taxpayers for a handout.
Penn Central Movie

Penn Central: Decline of Intercity Passenger Service


It was bad and got worse.

The NYC side had already really lopped off a lot of service in the Fall of 1967 and established Empire Service, NY-Buffalo, with a bunch of refurbished cars. A few trains with amenities, sleepers and more than snack service for food, were still available. But the remnant of the NE States, #428, when running very late, dropped the sleeper at Springfield for preparation for return trip on #427, proceeded to Boston and left when equipment was serviced and ready.

The PRR side was probably worse. Ever hear the story about the passengers on the Spirit of St. Louis who were so exasperated about the lack of working ac in any of the cars blocked the tracks at Columbus, Ohio or thereabouts and were not arrested. Someone was eventually summoned and got things workings. Wash. Union Station was pretty bad and so were some of the other stations. On the New Haven, big service reductions took place 2/2/69, a month after NH's inclusion in the system. Springfield service was generally RDC-ized with a shuttle operation between Hartford & Springfield, sometimes a GP-9 and coach. The NH's silver cars were generally moved to New Haven or beyond and were put into commuter service. Same for FL-9s. PRR E-units generally operated New Haven-Boston. EP-5s were relegated to freight and then the boneyard. GG-1s did run through from New Haven to Washington. Black diesels, redone letterboards on equipment, PC logo on stations, a general appearance of everything being rundown, broken, falling apart, dispirited employees. It was a bad time.

For the most part, the service and trains were "pretty shabby". The sleepers were not too bad and the service in them was fairly decent too. The trains themselves, terrible.

Probably the best trains were the former New York Central Empire Service trains between New York - Albany - Buffalo. They generally terminated in Buffalo at the old Central Terminal at that time. The New York Central fixed up some coaches with new seating or at least new upholstry on them and the AC and heat were quite good too. Probably the best trains other than maybe the Metroliners.

I know for a fact that in 1962, there was a big difference in the service and equipment between the New York Central and the Pennsylvania. I rode to Chicago from the east on the New York Central and the train was clean, well maintained and on time. I returned east on the Pennsylvania and the train was dirty, falling apart and hours late into New York. During the period, the former NYC generally had less through line service than the former PRR but the trains were generally better on the former NYC.

Sad but fact, there's nothing to romanticize about Penn Central.

What was obvious was that the railroad wanted out of the passenger business, and went out of their way to prove it. They made EVERYONE regret having taken the train for any length of trip.

These recants of NO heat, NO AC, NO working toilets. It's all true. I have to say that I've seen better attempts at service and on-time performance on railroads in Communist countries than what I witnessed on Penn Central. No wonder, the crew might have been taken out and shot for exercising Penn Central standards.

The best example of Penn Central "Quality" that held over through Amtrak was how Penn Central/Conrail/MTA ran the Harlem and Hudson lines, preceeding the 1983 inception of Metro North.

No food, but there was always someone eager to sell you a beverage and nuts to keep you thirsty for the ride. NO AC, NO HEAT in the seasons you needed it most. NO LIGHTS, NO AIR. Shot suspension. "NO-SHOWS" in the AM during cold weather, and after 8 PM departures from GCT. Water sloshing out of AC vents onto passengers in the ends of the cars. NO drinking water from the coolers. NO working plumbing, ice build-ups in the vestibules during winter storms with no effort made to clear them..... How many of you remember the "Penn Central Aquarium"? That was when there was water between the two panes of glass in the windows, which lazily sloshed back and forth, like that "Sea In A Tube" novelty.

When I see people restoring locomotives and rolling stock to Penn Central, I scratch my head and wonder why for the expense they are bothering. When I see model railroad cars available in Penn Central, I snort and turn the page. Want to "prototypically" run a Penn Central Empire Region train in the "Hey-Day" of PC? Weather a NYC E-8 to the max with rust and grime, simulate peeling paint, put a "Worm" on the nose, add two PC lettered coaches or a coach and a combine and adversely weather them similarly. VOILA!

Speed of such a model? Make sure it doesn't go any faster than what could be described as a "Limp", and put weights to the right side of one coach, and the left of the other, to accurately simulate the kind of totally shot suspension I described.

Types of travellers who used Penn Central? Travellers of CIRCUMSTANCE.
1. People who couldn't get a flight at the last minute.
2. People who were afraid to fly.
3. People travelling to places where you couldn't get to by air.
4. People who hadn't caved in to slumming it by taking the bus.
5. People who couldn't afford an air ticket.
6. People who weren't aware of how bad conditions had become.
7. Heartbroken Railfans.

The bus was and still is the pits unless you're utterly stranded or broke. Take note that the callibre of Rail Traveller went down as well through the 60's. It went from the well dressed family of multiple socio-economic backgrounds and serious businessmen, to students, trust-fund hippies and people looking for a cheap way to get there. People regularly commented during those times that the crowd on Penn Central was just one cut above the bus crowd!

Every opportunity Penn Central had to regain ridership, say during a blizzard, or whatever, they blew it. They might add coaches during a busy season, but they didn't bother to clean them, nor confirm the operationality of the heating system. Like I said before, they clearly wanted OUT of the passenger business and if the government wouldn't allow them to pull the plug, they became determined to drive off patronage themselves.

There was a lot of frustration in the management re the passenger trains. They weren't making money, yet the cost of going to the ICC to discontinue many of them was greater than the loss incurred by the train. So, this led to some games like the following:

* The Washington-Buffalo Day Express. In Harrisburg, passengers were required to get out of the train. The coach was taken out into the yard to sit. Later it was brought back and everyone was allowed to reload.

* Several trains were actually delisted from public timetables from time to time. This was a great tactice to lower the passenger count so the company could show the ICC that there was no demand. It was only railfans who would alert the ICC over this tactic.

* Passenger department switched to a type of floor cleaner that smelled so obnoxious you couldn't breathe in the car. They kept it, though, to drive away the passenger count.

Another point we have yet to cover here, is the marked difference in riding Penn Central EACH YEAR as it declined to it's death with the salvation of the creation of Amtrak. For you see, each year, it was like riding a different, horrible railroad. In 1969, it was a state of confusion without amenities. By 1971, there were dark cars with no lightbulbs, and missing floor tiles, like in the third world.

Penn Central was like riding a railroad in a country which had lost a war, and been steadily stripped down to the bone by the conquoring army. It wasn't so much that things were being carried off, as they were breaking or even FALLING OFF, and not being maintained or replaced.

To put it simply, the PC was a railroad that was always in decline. It had no "golden era" (THAT belonged to the PRR & NYC). It only lasted 18 months, before going into bankruptcy, and, obviously, was in bad shape from the day it was created.

The Metroliners: These experimental high-speed trains, the first U.S. trains to achieve 125 miles per hour in revenue service, served on the Penn Central's Northeast Corridor between New York and Washington. The Metroliners - February, 1970
Grand Central Terminal and the New York City Subway
This page is our gateway to New York City. Find out about the New York Central Railroad's Grand Central Terminal. Explore the fabulous New York City Subway System. Learn who Robert Moses. was and his impact on New York City. Understand New York City transit planning, West Side Freight Line (the "High Line") and St Johns terminal. The New Haven Railroad and the Long Island Railroad reached into New York City. Did you know the Lehigh Valley Railroad even went into New York City (by ferry). Learn about the Jenney Plan to bring commuters into New York City and finally explore mysterious track 61 at Grand Central Terminal with its relationship to Presidents of the United States.

Several years ago I wrote a story on the major railroads of 1950 and what happened to them.

Now I am following up with a closer examination of the New York Central Railroad. This railroad only lasted until 1968 when it merged into Penn Central.

But, what was the NY Central Railroad like in 1950?

You will also be interested in "What if the Penn Central Merger Did Not Happen"

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REFERENCE

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Penn Central Hauls the Coal!
Chip Syme's Penn Central's Valley Division
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