Penn Central, Pathetic 1974 Film to Attract Federal Funding

Trains Magazine General Discussion
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Actually, the film probably appears much more ineffective to the members of this group than it actually is because we all know a lot about the rail industry. It appears to target the politicians and others in “the powers that be” that didn’t know so mcuh.

I think it’s safe to say that mistakes were made on both sides by both management and the governement.

Management at both NYC and PRR did every thing humanly possible to hide their real condition starting probably ten years prior to the merger.

Then after the merger, they somehow managed to make distributions on their common stock for the first few quarters that PC was up and running. Where in the world they found the funds to do that I have no idea but some of it surely came out of track.

On the government’s side, the goverment forced the railroad to continue money losing passenger operations and freight service over little used branch lines.

Then the ultimate blooper of them all was the government forced takeover of the New Haven - a true financial basket case in its own right.

The building of the Interstate Highway System surely hurt all railroads but probably hit the Northeastern railroads disproportionately hard. Eisenhower’s intention was to build a pay-as-you-go system of toll superhighways but Congress had other ideas. “No, make them FREE ! Free for all Americans!”

I have always wondered what would’ve happened had Ike got his way. Perhaps a system of toll roads might’ve created a more level playing field for rail but the answer to that “what if” is that we will never know.

So, the taxpayers spent billions building the Interstates then had to spend billions more to clean up the mess.

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Perhaps that’s true, but the important people involved were reading the reports.

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Either way, the film is a total fail.

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The fact that ConRail was created and that the Staggers legislation was enacted makes it far from a fail. A artistic success? A blockbuster? A Icon?

It was a conversation starter. The longest journeys start with the first step. That film was a first step.

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Conrail was created because, as the film made clear, Penn Central was failing. The film did nothing to instill any confidence in them.

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Maybe that was their goal…

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Conrail was created to prevent the collapse of the entire Northeastern freight railroad network from happening. You literally had 6 major Class 1 railroads that where bankrupt and all where about to shutdown. It was either do something drastic or risk losing 1/3 of the entire nations railroad capacity at once. Even then it still took 4 years for the Government to realize that they needed to deregulate things to make a profit again.

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Have we really established who the intended audience of this film was?

I went back and read a very informative article in the February 1974 issue of Fortune magazine titled “A Costly Rescue for the Northeast Railroads”, I highly recommend it to anyone having access.

The argument supporting the need for the government to be involved was fought and won in 1973. As Jeff pointed out earlier, threats to liquidate were made… On Jan 1, 1973 trustees of the PC bankruptcy advised Judge Fullam that the railroad could not be resuscitated without federal assistance. Both the judge and trustees were growing increasingly concerned with their responsibility to protect the creditors share of PC assets, even if that meant stopping the trains and liquidating the railroad.

Eventually, in early 1973, Fullam did order the PC to stop operations and commence liquidation by Oct 1 of that year,… UNLESS government assistence was approved in the interim.

Ultimately, on Jan 2 1974 Nixon signed the 3R act which defined a Consolidated Rail Corporation, and created USRA.

Therefore, it is a little challenging to credit this 1974 film for the creation of Conrail. That decision had already been made.

What remained to be determined was how large the government’s contribution would be.

Two eastern railroads that were still solvent at the time, N&W and Chessie, were concerned about having to compete with the government…and were opposed to substantial assistance. While other roads were less concerned, the western roads in particular were primarily concerned with maintaining existing connections.

So the real decision remaining to be made in 1974, was how large the assistance package was going to be.

If this film we are now discussing was created as a lobbying to

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When most, if not all, corporate videos proclaim huge success stories, it is a bit sobering to view this film that focuses upon everything that is wrong. And there was plenty. The film doesn’t have a bunch of flashy charts but gets its point across, I think. The most poignant comment being (from a roadmaster?) at the end “To spend 34 years beating your brains out, to end up with something like this?” And there were other roadmasters and plenty of others at numerous levels trying in any way they could to keep the operation afloat. You see some of their faces.

They were sad years and the reasons for such precipitous decline are legion; but the decline had begun decades before and merely became so noticeable because of PC’s size. I worked through all but the final 6 months of Penn Central and believe the road did its best to carry on in spite of horrendous upper management, work rule restrictions and impediments from huge passenger expenses to Hurricane Agnes and an indifferent regulatory structure. What happened was inevitable, given the long-standing attitude that railroads were “crying wolf”. When the wolf came to dinner the devastation was nearly complete, as it seems to take a significant crisis to generate any meaningful response.

For me, this film illustrates the plight of those years – perhaps a little too graphically but it was real. What was PC supposed to do? Paint some locomotives in heritage schemes and ballyhoo its bright future? It was a death song and even this wasn’t enough until the entire northeast rail scene fell apart.

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Last night, I re-watched this turkey with my wife, who is in marketing. She could not stop laughing.