PC: 40 Years After The Fall

Today marks the 40th anniversary of the Penn Central's bankruptcy declaration.

Not only was its own image ruined once the investing, riding and shipping public knew how bad of an operation PC really was, but the financial community and the government finally had the facts shoved in their faces, too. Everybody already knew that the New Haven, great though it once was, had already become borderline-hopeless. The recently merged-away heritage of the New York Central and Pennsylvania Railroads was now also left in tatters. People of that era wondered what the heck those two titans had really been doing in the years just prior to the merger.

The answer was now obvious: dying by inches.

It's commonly held as a truism that without the Penn Central bankruptcy, there would have been less of an impetus for the Federal government to create Amtrak and, later, Conrail. Without those two successors, the national railroad scene would have turned out quite differently. Much as the commercial redevelopment plan which caused the destruction of PRR's magnificent Penn Station building in NY was the spur needed to get the modern historical preservation movement going (and which also saved NYC's Grand Central Terminal from the same fate), the swift decline and fall of the Penn Central was also viewed in hindsight as a necessary evil for spotlighting the fundamentally dysfunctional nature of railroading in general by 1970; in particular, rr'ing in the Northeastern US.

If industry deregulation, in the form of the Staggers Act of 1980, could have come by (for example) 1960, the necessity for the Penn Central merger might have been lessened or even eliminated. Many ahistorical "what if?"s are possible here. Alas, we had to do things "the hard way".

Franklin Gowen wrote: If industry deregulation, in the form of the Staggers Act of 1980, could have come by (for example) 1960, the necessity for the Penn Central merger might have been lessened or even eliminated. Many ahistorical "what if?"s are possible here. Alas, we had to do things "the hard way".

Franklin - Good stuff.

I like the "what if's" if deregulation happened 20 years earlier. Even though danger was not in the air in the late 50's, at least politically, these what if's are more interesting to speculate than just what if the merger never happened. My proposed view would be, not much in view of what the railroads eventually did anyway - mergers. If deregulated in 1960, the country would most likely still have ended up with a "Big Four" like we do today, but different names. That is my theory for the freight end. For passenger, a lot harder to guess. If the railroads were deregulated in 1960 across the board, when they still had decent passenger service, major cuts would most likely be initiated overnight as many were major money losers - even considering that in 1960, majority of the interstate highways were not built yet. Maybe the cuts would have been so drastic that the govt would step in to subsidize or takeover like they did, but a-lot quicker. Whatever speculation you could make, it boils down to one thing, we did do it '"The hard way".

I will take a stab at another guess. To study and theorize what would have happened if the railroads were deregulated in 1960, might be good enough for a thesis study in grad school, but in no way a dissertation.

I once heard this anecdote: Drop a frog in a pot of boiling water, and he'll immediately jump out. Drop a frog in a pot of water and slowly heat it to boiling, and he'll eventually boil because he adapts to the slowly rising temperature. Humans are much like the frog: we put up with BS and failure because we think things will change "next year" and so we continue to do the same thing. IE, leaving regulation in place, continuing to have punitive taxation on railroads, etc...