The following link is to a Conrail document suggesting the sale of a number of lines to P&LE. It’s dated 1985, which is before NS decided to withdrawl it’s takeover bid. But the description of this sale doesn’t mention NS or Guilford, per NS’s plans to sale off the ex-W&LE to the P&LE should it get CR. I have never seen or heard anything about the sale of these lines to P&LE. Obviously it didn’t happen, but does anyone have any more info on this possible sale of rail lines?
Any information would be greatly appreciated. It seems like a number of these lines would have made the Little Giant a tidy profit and probably kept it from going bankrupt and being folded into CSX. But then again, a number of the lines seem like they would be a drain on the rest of the system. Any thoughts on this expanded Pittsburgh & Lake Erie?
All I know is that NS wanted Conrail and to keep things “competitive” they were gonna get Guilford a line to Chicago. All I can say is if it happened it would be scary seeing Guilford running to Chicago.
Well from what i remember RRFoose, to have some compatition to a NS+CR the Guilford lines B&M, MEC, and the D&H at that time, P&LE, GTW, were going to merge and change the name to PRORAIL. if that merger would have happened, boy things would have been alot different wouldn’t thay.
I had never heard of this before! Didn’t CN have control of GTW by this time? That would have made things complex…
In response to the NS takeover of CR, I have always seen that GRS would have gotten the ex-NKP from Buffalo to Cleveland, then assorted ex-NS and CR lines to reach Chicago and St. Louis. P&LE would have recieved what is today W&LE. Didn’t think GTW was to get anything from the deal.
The document I have linked above, although dated 1985 (NS didn’t call it quits on the takeover attempt until 1986 if I remember correctly), doesn’t state anything about NS, GRS, or GTW being involved. In fact, it states that the expanded P&LE was to be created to create competition with a privatized CR - which DID happen! So this proposal must have been tossed around after realizing NS wasn’t going to buy CR. That’s why I’m curious as to why this divestiture never happen - CR privatized and this appeared to be the plan if that occured.
The St. Louis route was going to be via Delphos, OH, to Frankfort, IN, and on to St. Louis, essentially the old Cloverleaf. The Cloverleaf east of Frankfort was in deplorable shape by that time and can’t speak as to the condition west of Frankfort but today, the route is largely abandoned.
I have vague recollections of this proposal which was based on the Guilford roads, P&LE and a fair amount of trackage rights. It would have provided little more than token competition to an expanded NS.
My recollection is of something that had GTW involved, and which was being marketed as “ProRail” (get it?). I think you might find something about that in Trains back then.
About “the Little Giant.” Its assets included then: 1) access to the Monongahela Railway, which meant COAL TRAFFIC–Good $tuff; 2) access to steel mills in Youngstown, OH Jones & Laughlin Steel, later LTV); Aliquippa, PA (J&L/LTV); Pittsburgh, PA (J&L/LTV again); and Monessen, PA (Wheeling-Pittsburgh Steel); 3) a water level route between a connection at Connellsville, PA (CR and WM (later B&O, thence Chessie, later still CSX) and Youngstown, OH (B&O, CR).
Lets talk about each in turn. Access to the Monongahela Railway: money in the bank. Alas, the Monongahela also connected with Conrail (ex-PRR), so it’s coal has another outlet to the consuming world. What about access to all those steel mills–trainloads of coal, coke, iron ore, plus finished steel products – wow! how can we go wrong here? Well, both steelmakers went into Chapter 11 somewhere around 1985-86. Future: pretty dim. But wait: what about all them US Steel mills in the Mon Valley–didn;t P&LE serve them? Nope. That honor fell to the US Steel-owned Union Railroad, and “the Corporation” was not about to shortchange its own subsidiary for the sake of “the Little Giant.” Prognosis: not much future in the steel business, which had sutained P@LE for lo so many years. That leaves the connection between Youngstown and Connellsville, which Chessie (read B&O) could link on its own rails–except that it had to climb a westbound 2.2 percent grade (meaning helpers) up out of the Allegheny/Ohio River Valley to Eidenau, PA, thence downhill to Youngstown. P&LE connected the dots with less circuity, and with an almost water-level route (hey! it WAS once owned by the NYC!), and virtually no grade.
Interesting overview billio. I won’t argue that in the end, P&LE’s best use was as a through route for CSX. I do believe though, that the proposal to sell these lines was based on the fact that both P&LE and Conrail knew that if the Little Giant didn’t expand, and gain a wider traffic base, it was going under. The report shows the number of carloads to be gained from each section of divested line. Although CR wasn’t going to sell their busiest routes, P&LE still would have been able to make a living with what it would buy. Plus as part of the deal, P&LE would have a greater stake in MGA - meaning Conrail wouldn’t be able to purchase it as it did in 1993. Heck, with no steel traffic, PLE could have still sold their original line to CSX, obtained trackage rights on it to haul coal, and focused their operations on the Ohio and Indiana lines. And maybe with their growing expertise (sp?) at running a regional/conglomerate of short-lines, P&LE would have boughten up other short lines and became the new G&W/RA!
Thanks for the reply, rrfoose. There’s only one problem with a scenario that involves “the Little Giant” obtaining more lines over which to operate. I touched on that (incompetently, in all candor) in my earlier post: P&LE, by the time this scenario was put forth, had suffered an enormous diminution of its traffic base, and such was its financial condition that it could barely afford the supplies to keep itself in business. Absent the ability to demonstrate conclusively that it could gain/attract sufficient traffic to justify such a purchase, the question of buying more lines to expand its network would have been moot: no self-respecting lender/banker would advance them the cash in the first place. Overnight, the Little Giant, once the financial cash generator for the whole blooming New York Central System, the asset pledged by the Central to secure its equipment trusts, had become a pigmy, in its traffic base and, alas, financially.
Point made - I see where you’re coming from now. That explains why it couldn’t have happened in clear terms! Guess I didn’t quite pick up on that the first time through. Would it be safe to assume then that this proposal was a brain child of Conrail in an attempt to divest a number of lines they didn’t want all at one time, while making it look like they cared about the future survival of another competitor? Sounds like a business deal to me, ha!
It’s been a few years, so forgive me if things are a tad cloudy. Back in the days of regulation, which foamers love and intelligent consumers should despise, P&LE participated in (among others) two routes between western and eastern points in Official Territory (roughly, rail lines east of the Mississippi and North of the Ohio Rivers --looky; I’ve already dated myself!). One was called the “Central States Dispatch Route” and the other was the “Alphabet Route.” Each route had in common a) participation by a whole bunch of carriers, most of whose main lines (and VERY few branches) have been swallowed up first into Chessie/CSX and Conrail/CSX or Conrail/NS (think Reading, WM, B&O, I think CNJ, etc). The other: P&LE formed in each chain a link that could not be broken.
Herewith an aside: under ICC regulation, interchanges were meant to promote maximum flexibility for shippers in the routing of their traffic. And shippers (today as weel as back then) select the route for their goods. This effectively forced the carriers to join up with routes (and divisions–the apportionment of revenue between carriers on interline routes) that many carriers disliked because the existing division was non-compensatory. Following de-reg, the enormous array of routes open to shippers was circimscribed enormously–carriers, for example, could surcharge traffic moving by routes that didn’t pay, thereby forcing onto routes they preferred–or off the rails entirely (but then, one could argue, they shouldn’t have been made to carry the freight in the first place). The first (regulated) option clearly transferred wealth to shippers; the second option was far more wealth-friendly to the carriers.
After de-reg, both the routes mentioned above were closed off. Chessie/CSX, which joined P&LE
The concept of having an expanded P&LE serve as competition to an expanded NS in '85 made as much sense as an expanded D&H serving as competition to Contrail a decade earlier. Had Guilford gotten truly involved with the P&LE expansion, U-boats in Guilford gray. Nah, would never happen.
I have also seen (per the linke below), that P&LE made one last-ditch effort to expand in 1991. They apparently signed an agreement to buy Conrail’s Meadville line. Has anyone else heard of this, and/or know any further details about it?
I doubt this expansion would have saved the Little Giant either, but CR and now NS have kept this portion of ex-EL trackage, so it must be making some money.
It’s been some 35 years when I was a marketing trainee and forced to read for a living the plethora of tarriffs. division sheets and routing guides that regulation spawned and that I then concluded were suitable for mental defectives. I cannot remember either the Central States Dispatch Route or the Alphabet Route. Sorry. I will attempt to ROUGHLY re-create them from memory in spirit if not in exactitude. A shipment routed from, say, St. Louis or Chicago to Northern New Jersey might go B&O-Youngstown, OH-P&LE-Connellsville, PA-WM-Lurgan-some other junction-CNJ. Another junction was Cherry Run-WV. It’s been a while, and my memory here is admittedly fuzzy, but I think this example conveys the general idea.
In theory, such a route seems terrific–a whole bunch of roads, cooperating to move the goods expeditiously from here to there across the expanse of Official Territory. In practice, a slightly different story. Instead of calling up one railroad to trace their shipment, shippers had to call one of four or five – pain in the butt. Another problem was revenue, or shortage thereof: if, say, PRR or NYC could haul the shipment the whole distance and pocket 100 percent of the revenue, then that same 100 percent revenue had to be divvied up four or five ways. Result: nobody gets rich from participating in these routes. In fact, railway cost analysis back then was primitive that many, if not most, roads never knew whether they made money or not! And for, say, a P&LE, it’s highly likely that their division was non-compensatory. So why not charge more to make the participating carriers financially happy? Well, why should a shipper, price-sensitive and price-savvy in the exterme, pay one group of carriers more for the same service, when the same shipper can be swayed by a penny a hundredweight reduction for his output