Tag Archives: pennsylvania railroad

Penn Central Transportation Company – Lehman Brothers Collection – List of Deals

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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.

1971 $100,000,000 trustees’ certificates

Penn Central Transportation Company filed a petition for its reorganization that was approved, and following legal steps, the court authorized the issuance of the certificates by Trustees. The certificates were to be treated as an expense of administration and received the highest lien on the Penn Central’s property and priority in payment under the Bankruptcy Act.

Penn Central was formed in a 1968 merger between the Pennsylvania Railroad and the New York Central Railroad. The ambitious conglomerate collapsed into bankruptcy two years later. The Penn Central’s collapse has been called the biggest business failure in American history. In their book The Wreck of the Penn Central, Joseph Daughen and Peter Binzen claim that 100,000 creditors and 118,000 stockholders were affected by the 1970 bankruptcy.

Both the Pennsylvania Railroad Company (PRR, “the Pennsy”) and the New York Central Railroad Company (NYC) had long histories starting in the early days of railroads. Pennsylvania Railroad was founded in 1846, eventually controlling 11,000 miles of track throughout the Northeast and the nation. The New York Central Railroad was founded in 1853 and stretched from Pennsylvania to as far as Ottawa. The companies were financed and run by robber barons like Erastus Corning, Chauncy Depew, J.P. Morgan, and Cornelius Vanderbilt, who manipulated prices and transportation to freeze out competitors and consolidate their control. Both the PRR and the NYC were highly complex companies controlling land and real estate, transportation routes of many kinds, and commodities like coal and steel. The Penn Central also incorporated the New York, New Haven, and Hartford Railroad, a fiscally unsound railroad that the Interstate Commerce Commission (ICC) required the new company to acquire and support.

The Penn Central merger germinated from a 1957 idea of the PRR’s president, James Miller Symes, to consolidate the railroad industry. PRR and NYC’s boards approved the merger in 1962. Judicial wrangling delayed the merger until 1968.

The railroad’s collapse stemmed from many business problems. Executive infighting plagued the new company. The Penn Central CFO, David Bevan, was later tried and acquitted for $4 million in embezzlement. Penn Central executives sold almost 40,000 shares of stock just before the bankruptcy. Interstate trucking and air flights were cutting into railroads’ freight and postal market. The ICC also required the Penn Central to continue running unprofitable commuter and passenger trains. Service on both passenger and freight lines was poor. Inflation crippled the company just as the 1969 winter delayed the system. Despite its $4.6 billion in assets, the new company went bankrupt on June 21, 1970.

Federal regulators reorganized Penn Central and a few smaller railroads as the Consolidated Railroad Corporation (Conrail) in 1976.

Note: There are a number of books describing the collapse of Penn Central: Joseph Daughen and Peter Binzen’s The Wreck of the Penn Central (Beard Books, 1971); Michael Gartner’s (ed.) Riding the Pennsy to Ruin (New York: Dow Jones, 1970-1971); Stephen Salsbury’s No Way to Run a Railroad (New York: McGraw Hill, 1983); and Robert Sobel’s The Fallen Colossus (New York: Weybright and Talley, 1977). A variety of Securities and Exchange Commission and Senate reports also deal with the Penn Central’s collapse.

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Ft Wayne Union Railway

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October 11, 1922 The Ft. Wayne Union Railway is incorporated to serve the International Harvester plant on the east side of Ft. Wayne. It is jointly owned by the Pennsylvania, Nickel Plate, New York Central and Wabash railroads, each with a 25% share in the new company.
Corporate Genealogy of Fort Wayne Union Railway

Originally the Fort Wayne Union Railway, the curvy Union Belt runs between the NS Huntington District and Piqua Yard on the east side of Fort Wayne.  The connection to the the Huntington District is next to the old Gladieux Refinery.  A long time ago the Union Belt actually crossed underneath the Huntington District and ran into the Chicago District near the Maumee River.  The bridge underneath the Huntington District is still there today and you can see it just east of the State Road 930 Cloverleaf.  The line runs along Meyer Rd. near the old International Harvester plant then curves west towards Piqua Yard.  Here the track runs across the old Piqua Yard hump and then into the Triple Crown Yard.  Norfolk Southern operates the Union Belt to switch out several shippers along the line.  The western most end of the track is used by roadrailer trains switching the Triple Crown Yard.  NS refers to the line as “the belt.”  NS used to run roadrailers in and out of Triple Crown using the Union Belt on a regular basis but now predominately uses the Piqua Wye near Winter St. instead.

Find out more on what railroads the New York Central owned all or part of.