Conrail replaced Penn Central in 1976
Source: Mark Levisay, 003ed
Conrail replaced Penn Central in 1976
Source: Mark Levisay, 003ed
In 1957, the Pennsylvania Railroad controlled two routes in Virginia. Through the Cumberland Valley Railroad, it operated in the Shenandoah Valley between Winchester-Martinsburg. Through the New York, Philadelphia and Norfolk Railroad, it operated on the Eastern Shore and at Little Creek in Virginia Beach/Norfolk.
One other route in Virginia had once controlled by the Pennsylvania Rairoad, between Quantico and Long Bridge over the Potomac River. It was sold in 1901, when the Richmond, Fredericksburg and Potomac Railroad acquired the Washington Southern Railway.
The Pennsylvania Railroad suggested opening merger talks with the New York Central in 1957. The Pennsylvania Railroad and the New York Central were the two dominant trunk lines carrying traffic east-west north of the Mason-Dixon line.
Almost all the railroads in the northeastern states had excess capacity, and were generating inadequate revenues to maintain duplicative infrastructure. Profits were minimal as trucking companies gained greater market share, and as pipelines moved oil and natural gas to replace coal moved by railroads. Consolidation was the economic path to downsizing capacity and streamlining railroad operations, if companies could agree on terms and if the Interstate Commerce Commission would authorize reductions in competition.
The New York Central, which never had operations in Virginia, rejected the Pennsylvania Railroad's offer to open merger talks. The New York Central questioned its rival's financial stability, and sought out other partners instead.
After the Interstate Commerce Commission (ICC) approved the Norfolk and Western Railway-Virginian Railway merger in 1959, the New York Central feared that the Pennsylvania Railroad would merge with the Norfolk and Western Railway. The Pennsylvania Railroad already held 34% ownership of the Norfolk and Western Railway. Such a merger would draw traffic away from the New York Central, as a stronger competitor would be able to improve service and expand operations while New York Central revenues declined.
The New York Central's defensive response was to propose merging with both the Baltimore and Ohio (B&O) Railroad and the Chesapeake and Ohio (C&O) Railway. That three-way combination would create an effective competitor to the anticipated Norfolk and Western-Pennsylvania system.
The Chesapeake and Ohio Railway declined the offer. Instead of partnering with the New York Central, it chose to compete with it. It 1960, the Chesapeake and Ohio Railway acquired control of the Baltimore and Ohio Railroad, owning over 60% of the stock.
That left the New York Central and the Pennsylvania Railroad no other strong partners for a merger as the railroads in the eastern states realigned. They filed a merger proposal with the Interstate Commerce Commission in 1962. The Federal agency considered it, along with proposals for other railroad mergers. The Interstate Commerce Commission could have maintained four separate major east-west lines in the northeast - the Norfolk and Western Railway, Chesapeake and Ohio Railway, Pennsylvania Railroad, and New York Central.
After both the Norfolk and Western Railway and the Chesapeake and Ohio Railway were allowed to acquire other rivals and expand their systems, the Pennsylvania Railroad and New York Central would have lacked the ability to compete as separate lines against larger rivals.
After six years of hearings and lawsuits which reached the US Supreme Court, the merger was completed in 1968. Within Virginia, the Penn Central took over the track between Winchester-Martinsburg and on the Eastern Shore/Little Creek.1
The Penn Central and Other Railroads: A Report to the Senate Committee on Commerce, U.S. Government Printing Office, 1973, pp.284-85, pp.319-323, https://books.google.com/books?id=mzr30uuJI4QC; "Penn Central Railroad: A Corporate Disaster," American-Rails.com, https://www.american-rails.com/pc.html (last checked July 6, 2020)
The new railroad quickly failed, and the Penn Central filed for bankruptcy protection in 1970. In response, the US Congress created the Consolidated Rail Corporation (Conrail) when it passed the Regional Rail Reorganization Act of 1974. After the US Congress passed the Railroad Revitalization and Regulatory Reform Act of 1976, Conrail began operations as a government-owned company.
The US Railway Association assessed what track should become part of Conrail, rather than abandoned.
On the Eastern Shore, the US Railway Association did not recommend forcing Conrail to absorb the Penn Central track on the Eastern Shore or the Cape Charles-Little Creek car float. They were not profitable, and would require a subsidy to stay in operation. The recommendation was to transfer the track on the Eastern Shore and the car float/Little Creek operation to a solvent railroad. The Southern Railway, Richmond Fredericksburg and Potomac Railroad, and the Seaboard Coast Line expressed interest, even though:1
"Brief History of Consolidated Rail Corporation,", Conrail, https://www.conrail.com/history/; "Preliminary System Plan," US Railway Association, Federal Register, March 4, 1975, pp.9836-38, p.10147, https://books.google.com/books?id=P7uGS8wODlwC (last checked July 6, 2020)
No solvent railroad chose to purchase the Penn Central route, which had been launched by the New York, Philadelphia and Norfolk Railroad in 1884. Instead, Northampton and Accomack counties created a transportation commission that arranged for a short line Class III railroad to operate on the Eastern Shore. That lasted between 1976-2018. The last contractor, Bay Coast Railroad, ceased operations in 2018 with minimal notice.
The two counties were able to get another operator to restart service, but it was willing to use just the 15 miles between Hallwood in Accomack County and Pocomoke City, Maryland. The rest of the railroad on the Eastern Shore was abandoned, to be converted into a pedestrian trail. The car float ended and the barge was sold.
After the Bay Coast Railroad stopped operating, the track from Little Creek, connecting to the Norfolk Southern and to the Norfolk and Portsmouth Belt Line, was successfully leased to the Buckingham Branch Railroad. As a result, only the northern and southern tips of the Penn Central track on the Eastern Shore/Little Creek still remain in use.1 "Carload Express Expands Rail Freight Service to Virginia," Carload Express, June 11, 2018, http://carloadexpress.com/2018/06/carload-express-expands-rail-freight-service-virginia/; "Virginia Shore looks to rails-to-trails as railroad seeks to abandon tracks," Salisbury Daily Times, July 2, 2019, https://www.delmarvanow.com/story/news/2019/07/02/va-shore-looks-rails-trails-railroad-seeks-abandon-tracks/1616241001/; "Norfolk Division," Buckingham Branch Railroad, http://buckinghambranch.com/norfolk-division/ (last checked July 6, 2020)
In contrast, the Penn Central track in the Shenandoah Valley has remained in operation. While the Penn Central was in bankruptcy between 1970-1976, the US Railway Association concluded that the Hagerstown-Winchester line could be profitable.
It became part of Conrail in 1976. A decade later, Penn Central planned to abandon the track. Instead, in 1986 the Winchester and Western Railroad purchased it. That short line had been hauling primarily sand from west of Winchester to interchange with the CSX at Winchester. Acquiring the Conrail track gave the Winchester and Western Railroad a connection to the Norfolk Southern at Hagerstown, so it gained greater opportunity to bargain for rates.1
"Preliminary System Plan," US Railway Association, Federal Register, March 4, 1975, p.9838, https://books.google.com/books?id=P7uGS8wODlwC; Edward A. Lewis, American Shortline Railway Guide, Kalmbach Publishing, Co., 1996, pp.337-338, https://books.google.com/books?id=3i6K_Nf9e2EC (last checked July 6, 2020)
The Federal government deregulated the railroad industry in the 1980 Staggers Rail Act. That allowed railroads to adjust prices based on market conditions without waiting for Interstate Commerce Commission (ICC) approval. Competition with the trucking industry was enhanced, and Conrail began to make a profit in 1981. The US Congress passed the Conrail Privatization Act in 1986, and in 1987 the Federal government privatized Conrail by selling the stock to private investors.
Competitors eyed the potential for incorporating the profitable segments of Conrail track into their own network. In 1998, after a year of getting approval by the Surface Transportation Board, Conrail was divided between Norfolk Southern and CSX. The two Class I railroads split up most of Conrail's track. A remnant 1,200 miles of track was kept in business, and Conrail continued to operate that mileage as a switching and terminal railroad.1
"Brief History of Consolidated Rail Corporation, Conrail, https://www.conrail.com/history/ (last checked July 6, 2020)
None of that remaining component of Conrail was located in Virginia. The sale of track to the Winchester and Western Railroad in 1986 ended Conrail's operations in Virginia.
in 1888, the Pennsylvania Railroad controlled the Delaware, Maryland and Virginia (blue), New York, Philadelphia and Norfolk (green), and Baltimore and Potomac (red) railroads in Virginia
Source: Library of Congress, Map of the Nashville, Chattanooga and St. Louis Ry.; and connections. (by W. L. Danley, 1889)