From Six Losers, Conrail Grew to Be a Winner

When Conrail disappears June 1, it will mean the end of a relatively short -- but fairly eventful -- railroad history.

Conrail was created by a committee in Congress. It was intended to satisfy the need for rail service in the Northeast, which was populated by six bankrupt railroads, including the one that had been, up to that time, the biggest industrial bankruptcy in history – the Penn Central.

Beside Penn Central, the other companies combined to formed the new rail system were Central Railroad of New Jersey, Erie Lackawanna, Lehigh & Hudson River, Lehigh Valley and Reading.

In those days, members of Congress must have spent a lot of time watching "Sesame Street." They passed two major pieces of legislation that depended heavily on the letter "R."

There was the 4-R Act, which attempted to restructure and revitalize the whole rail industry-- later largely superseded by the Staggers Rail Act of 1980 -- and the Regional Rail Reorganization Act, known as the 3-R Act, that resulted in the creation of Conrail in 1975.

However, pushing together six losers doesn't create a winner, and Conrail, in its infancy, was nothing more than an amalgam of bankrupts. It could only survive with the help of huge dollops of government largesse.

Robert Blanchette, a former federal railroad administrator, once said he would be glad to write off all the government's expenditures and sell Conrail to private industry for a dollar – if he could find a buyer.

But six years after it was established, Conrail no longer required federal investment and finished 1981 with its first profitable year.

For the full story, see the May 31 print edition of Transport Topics. Subscribe today.