fredmcain wrote:I know that there are a lot of people who would disagree, but I believe that the negative effects that were supposedly caused by Patrick McGinnis have been blown way out of proportion. I'm not even sure he hurt the road that much - in fact he might have even HELPED it by making people realize that commuter rail operations would have to be subsidized. But the government took too long to do this.
Count me in that camp. McGinnis was an investor looking to milk whatever value he cold get out of an old New England railroad property. In their weakened state, the NH and B&M were easy targets. As far as the "government waiting too long" to subsidize commuter trains, you have to realize that the neighboring New York Central was doing a pretty good job thawing out New York State and getting some limited subsidies or purchases of new equipment. The New Haven did not have a good relationship with the government agencies, and it wasn't until much later that some subsidy finally came their way.
But back in the day, the powers that be saw the PC as the only way to "save" the New Haven. But the PC takeover of NH did nothing except hasten PC's decline and NH's demise.
I don't think that is quite accurate. From what I understand, the ICC made merger with the New Haven a condition of the Penn Central merger only to get their case off the books. No one wanted to "save" the New Haven, only make it go away.
The New Haven was bankrupt with no hope of reorganization. No investors were stepping forward, no banks would give them credit. If the New Haven had indeed shut down and was not included in Penn Central, it would have had an adverse affect on transportation infrastructure throughout the northeast. I'm sure the ICC would have come up with some sort of "directed order" to keep the New Haven running even while its bankruptcy case wound through the courts, a process that would have taken years and clogged up the courts and ICC dockets for decades. I imagine that eventually there would have been court-ordered sales of New Haven lines to various bidders not unlike how the Rock Island was divvied up after it shut down 1980. My thought is that the ICC wanted to clear the whole New Haven mess off their desks, and the easiest way was to fold it into the Penn Central and pretend like the problem was solved.
In fact, on paper, the problem was "solved," as Penn Central acquired the railroad and agreed to pay off the estate of the New Haven with cash and stock. The idea was that NH would get a lump payment form PC, pay off its creditors, and quietly effect an orderly shut down of the old company. What is some entertaining reading are the Annual Reports of the New Haven Railroad from the 1970s (yes, seventies) where they have hauled Penn Central into court for non-payment and continued to negotiate with its creditors.
Fun stuff, this business of railroading.
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