But one of the things I’ve always wondered about was the specific reasoning employed by the original “borg” of railroads, in making it’s decision(s) of how it would operate the railroads it aquired over the years.
For example, why did it decide to absorb wholly, and operate as an expansion of the parent, lines such as the Vandallia, while aquiring but operating as a seperate entity lines such as the Wabash?
Specific to the Wabash, when did PRR aquire control, and was the ambition driving said aquisition one of seeking to expand their territory, or was it simply a scheme to buy Wabash’s customer base/traffic?
I don’t think the PRR was ever allowed to own the Wabash. I believe PRR’s stockholders set up another company called Pennroad, which owned the Wabash and some others, possibly the DT&I, Ann Arbor and Lehigh Valley were owned this way. I believe the Long Island was owned by the PRR, until they donated it to New York in the 1960s.
It really wasn’t account, if was returns. Sorry if I am a little vague, but I am about 1400 mile from my materials.
PRR controlled a huge block of shares of the Wabash and the N&W. When the N&W needed a new Prez, PRR nominated the guy from the Wabash. The money from the N&W was the only thing that enabled the PRR to pay dividends.
Another reason that the Pennsy (and other lines) bought/controlled stock was to get a seat (or more) on the other lines Boards of Directors. Not so much to run the other company as a subsidiary but to allow otherwise competing lines to work together a little bit more. It would be hard for the B&O or the LV or the Wabash to start a rate war or divert traffic away from the PRR if there was a PRR director on the other Board to sound the alarm back at Broad Street. I believe the term for such arrangements was “community of interests” While shippers and the public saw it as thinly veiled (or open) collusion, the companies saw it as a way to avoid destructive rate wars and secret agreements (of course, one’s own rate cutting was justified and traffic arrangements were none of anyone else’s business…)
It covers mergers and ownership from 1900 to 1970 quite well, with a lot of focus on the PRR. Ed (MP173) and Murph enjoyed it, as did I, and it is very well written.
No, I haven’t read that book, although I love delving into such books and sifting out facts that can be used as weapons in debate, [B)] so I may just have to track that one down…[:)]
In the meantime, however, I hope no one is offended if I try to further this railroad related topic at the discussion level, sometimes different persons personal interpretations of historical fact are as interesting as the facts themselves.
On the old thread, heh, good find! I left you a reply there but the message seems to be blocked from coming back to the top of the discussion list, which is a shame
OK, well the questions I intended to ask are going to have to change a bit, But I can still focus them towards the same underlying curiousity.
Someone said earlier that the PRR would not be permitted to simply absorb, or merge with the wabash, so they simply slapped together this paper construct, that does look like collusion to me, and had their way.
Not a whole lot of PRR’s trackage was parallel to Wabash’s, they did serve common markets but often one or the other would be the far superior route between common endpoints, so it’s not like they merely wanted to neutralize a parallel competitor. Yet at the same time, there were markets where the only 2 RR’s in competition with one another, were the PRR and the Wabash. (that good old american capitalist/competition thing that the government seems to spend so much effort trying to preserve)
In communities where PRR and Wabash were IT, competitionwise, I’m surprised that the one owning the other didn’t set off tripwires and alarm bells for some regulative body?
And, more towards the original curiousity that led to theis thread in the first place, if PRR could get away with such shenanigans, what kept companies such as Santa Fe and Southern Pacific from doing similar?
could it be that the only (abstract example) reason UP is not trying to merge with CSX is because they already have a controlling interest in their stock?
Is such were the case, I can only say one thing : Union Pacific, PAINT YOUR BRIDGE(s) [#offtopic][:D] [:D]
I would guess the PRR could have merged the Wabash in the 1960s, instead of merging with the NYC. Before that, PRR dominated the industry, so the ICC wouldn’t let them grow further. During the 1960s C&O acquired the B&O, while N&W acquired the Nickel Plate, so PRR+WAB would be allowable. I would have liked to see the NYC shrink at the same time, selling secondary routes and branches as the ICG did in the 1980s.
PRR would have gained longer hauls, to Omaha and KC. PRR also could have merged the Lehigh Valley at that time, as nobody else wanted it and PRR was not a player in the New York area to Buffalo market.
well, having the regulatory body decide "no, PRR is too big to allow them to merge Wabash into them, but it’s ok for them to own them outright,…makes little sense…6 of one half a dozen of the other.
Using my earlier comparison, why not have the Santa Fe simply aquire SP’s stock, and sock in into their own treasury? if one is more permissable than the other,…why split hairs?