The Wreck of the Penn Central


M

MikeJ

Member
Any of you guys read the book The Wreck of the Penn Central? I'm about 100 something pages into it and it is quiet the story. I'm more into the business of railroading and I'm just wondering if any of you guys read that book and what you think of the whole thing?

-Mike
 
Yes, yes I have and I also own a copy of the book. I have lived in the BUFFALO,NY area...I saw PennCentral,conrail come and go. An fyi I had six rail lines almost out my front door!

BCK RR
 
I wasn't born in the Penn Central Days, but I do remember Conrail. It was more fun back in those days. Class 1 railroads are a tad bland today.
 
Yes railroads are a business. I like when someone asks why there favorite railroad was abandoned rather than being able to buy out a competitor. Money or the lack thereof. It must have been worry some to see the collapse of the railroad empire controlled by PC. The original to big to fail corporation declared bankruptcy and then everyone realized the railroads would disappear if nothing was done.
 
Milwaukee Road was the same....I've heard the financial issues were largely because money was getting routed into real estate instead of track maintenance, new cars/locos/ect. I think they still own half of downtown Minneapolis under a different name.
 
I worked there, I was there from Day 1 through Conrail Day 1. The Wreck of the Penn Central was written by two writers from the now defunct Philadelphia Bulletin, a paper headquartered across the street from PC's secondary Corporate headquarters on one side and 30th Street Station on the other. It's pretty accurate. Another book that touches on the subject is "The Men Who Loved Trains, by Rush Loving, a more contemporary look at the "wreck" that was the PC.

The company exists as an Insurance Company based in Cincinnati, Ohio, that goes by the name "American Financial Group". Interesting read.
 
Although I grew up in the west, I always admired both the New York Central and the Pennsylvania Railroad. We would see trains from both railroads when we traveled to Chicago on either the Milwaukee Road or The Northern Pacific and went to points wast of Chicago. The passenger trains from both railroads were really classy and had a good look to them. I only got to ride on the NYC one time when I was a kid in the late 50's and took the Pennsylvania from Chicago to New York when I was in the Navy in the mid 60's.

When the merger took place I was in the Navy, and at the time more interested in girls and muscle cars, and really didn't follow the railroads very closely, but sure didn't care for the PC paint jobs, so when the PC ceased to exist, I personally couldn't have cared less.

When I first got out of the Navy, I stayed in Florida because the job situation in Montana wasn't the best in the early 70's. While on the highway patrol, I did make friends with a number of people that worked for the FEC and did manage to get to ride from time to time as I sort of missed riding the rails with my relatives in Montana.

I left Florida in 1977 shortly after the birth of my daughter and finally got back home. The merger bug had already hit up up in Montana with the formation of the Burlington Northern. By the time I got home, The Milwaukee Road had done away with their electrification and I had no more Joes of Box Cabs to ride in. I did ride with my relatives from time to time and saw the Milwaukee Road's tracks deteriorate. Although my relatives didn't want to believe it, or even think about the Milwaukee Road being gone, they could see the handwriting on the wall and in 1985 all were out of a job.

It is really sad to see major railroads who built this country either go under or merging. Guess that's progress.

............................................................ Chet
 
MikeJ said:
Any of you guys read the book The Wreck of the Penn Central? I'm about 100 something pages into it and it is quiet the story. I'm more into the business of railroading and I'm just wondering if any of you guys read that book and what you think of the whole thing?
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I have not read the book. Yet another thing on the 10,000+ to do list. But, one of my contentions is that had the Penn Central not failed, the government would not have stepped in with Conrail. Without Contrail, they (the government) would have never learned what the industry was really like and what the roadblocks were. As a consequence the Staggers Rail Act came about and freed all the railroads of the onerous and outdated regulations. That is my dissertation thesis. Now all I need is the time to do the 5 years or so of research to prove or disprove it. sigh.

I did my accounting graduate degree capstone project on the problems of the betterment accounting system and demurrage practices used by the railroads up to that time. I am also thinking had Penn Central had been allowed to change their accounting way back then it may have better shown where the real issues where and thus aided in correcting them.
 
I agree.^ The failure pointed out the flaw in the thinking of the public that because the PRR and NYC controlled so many other businesses that they could not fail. Very few people realized how unprepared the industry leaders were for the future. The railroads were mostly making profits from subsidiaries to pay their dividends and whitewash their financial status. The ICC 'helped' by forcing them to maintain services that were losing millions of dollars each year. Nobody believed that the PRR wasn't making billions in profits. Then they finally worked out the PC merger and shortly declared bankruptcy. From my prospective as a 30 year old it seems like there was too much pride and overregulation. Between the two they couldn't adapt to a changing environment. Under relaxed regulations, Conrail become profitable within a decade because they made the tough choices and sold/abandoned lines that weren't needed.
 
I read the book about 1975,when I was in seventh or 8th grade. A complicated read at that time for me, although I do remember about the Red team, and Green team. Having lived in Philly as a small child, and northern NJ ever since I rode the corridor under PRR, PC, and Amtrak from Newark to Trenton a number of times over the years. Most of the commuter equipment under PRR was worn out (MP54s). Between the Silverliners and Jersey Arrow equipment, things started to look up. Amfleet was a major upgrade when it arrived.
 
Iron Horseman said:
I did my accounting graduate degree capstone project on the problems of the betterment accounting system and demurrage practices used by the railroads up to that time. I am also thinking had Penn Central had been allowed to change their accounting way back then it may have better shown where the real issues where and thus aided in correcting them.
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While you are correct in your assumptions, especially the comments on the betterment accounting system and demurrage issues, (as well as the related issues concerning the "Cost of Capital"), these problems affected the entire railroad industry.

The problems the Penn Central inherited included the loss of business, due to the decline of industry within their service area, the refusal of the PRR to spend capital to modernize, the debacle that was the New Haven, as well as high level mismanagement of the PRR, and the ethical issues concerning the PRR/PC's CFO. This combined with the failure to implement the merger "plan", (until the advent of Conrail), doomed the PC from the start.

All of the non-rail assets were either under performers or highly leveraged, negating any real value.

Keep in mind that Conrail struggled after Staggers, and didn't correct itself until Stanley Crane persuaded congress to eliminate labor protection, and further persuaded labor to accept wage deferrals.
 
That was an interesting video. It showed conditions on the ground. It reminds us how railroads are like any other business. My Uncle told me it was a good time to be a rail fan because there was a train stuck on every siding around here. According to him some trains didn't move for weeks. I missed all that.

Sent from my XT1080 using Tapatalk
 
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