Erie Lackawanna Railroad

Template:Infobox SGRailroad The Erie Lackawanna Railroad Template:Reporting mark was formed from the 1960 merger of the Erie Railroad and the Delaware, Lackawanna and Western Railroad. The official company name initially included a hyphen between Erie and Lackawanna, but this was dropped in 1963. The official motto of the line was "The Friendly Service Route".

The EL struggled for most of the 16 years it existed. The two railroads that created it were steadily losing passengers, freight traffic and money, and were heavily burdened by years of accumulated debt. These two historic lines, the Erie and the D.L.& W., started to consolidate facilities on the Hudson River waterfront and across southern New York State in 1956, four years before formal corporate merger. The Lackawanna route was severely affected by the decline of anthracite and cement traffic from Pennsylvania by the 1940s. The Erie was burdened by the continuing loss of high-tariff fruit and vegetable traffic from the western states into the New York City region as highways improved in the 1950s.

The northeast's railroads, including the EL, were all beginning to decline because of over-regulation, subsidized highway and waterway competition, high rates of urban property taxation, and market saturation (i.e., too many railroad lines competing for what market was remaining). The closure in the 1960s of old multi-story factories in the eastern cities, followed by the decline of the domestic automobile and steel industry in the 1970s, eroded much of the EL's traditional traffic base. Also, due to government regulation policy formulated in the late 19th Century, the EL and other railroads could not immediately abandon long-distance passenger runs, despite the fact that competition from airlines, bus lines and the private automobile made them unprofitable.

However, the EL did post profits in the mid and late sixties through heavy cost-cutting (reduction of parallel services), equipment modernization, suburban industrial development, increased piggyback trailer traffic, and steady reduction of long-distance passenger train service, which ended in early 1970. Also, additional rail traffic was temporarily diverted to the EL because of service problems on the troubled Penn Central lines, which the EL largely paralleled. The EL built a state of the art diesel engine repair facility in Marion, Ohio, and upgraded a large car repair shop in Meadville, Pennsylvania. As to its money-losing suburban passenger train services in the New York City metropolitan region, the EL had come to terms with the State of New Jersey during the late 1960s for adequate subsidy and for the purchase of new engines and coaches. The EL also gained a lucrative contract with United Parcel Service in 1970, which led to the operation of five dedicated intermodal trains daily between New Jersey and Chicago. However, in 1972, Hurricane Agnes destroyed many miles of track and related assets, putting the company into bankruptcy.

The EL was purchased by the Norfolk & Western Railroad through its holding company DERECO in 1968, as a condition of the proposed but never consummated merger between N&W and the Chesapeake and Ohio Railway system. At that time, the company changed its name to Erie Lackawanna Railway, whereby all common stock for the new company was held by N&W / DERECO. After its 1972 bankruptcy, EL management attempted to plot an independent course, anticipating financial reorganization without a heavy debt burden. Therefore, it initially declined interest in joining the Consolidated Rail (Conrail) takeover of the other major bankrupt eastern lines. The preliminary (PSP) and final (FSP) system plans for Conrail showed the EL being merged into the Chessie System. However, the operating unions could not reach a compromise. Also, by 1975 the economy in the eastern United States was gravely affected by the 1973 oil crisis, quashing any hopes of the EL being able to independently compete with government-rehabilitated Conrail lines. Therefore, the EL petitioned and was accepted into Conrail at the last minute.

In 1976 much of the company's railroad assets were thus purchased by the federal government and combined with other companies' railroad assets to form Conrail. An independent Erie Lackawanna Estate continued in existence for several years thereafter. This Estate liquidated the EL's marginal non-railroad assets and distributed the railroad purchase funds as to satisfy much of the large debt burden that the EL and its predecessors had accumulated. The EL's creditors gained more by selling the line's assets than by continuing its traditional business operations. Thus, the EL was an example of a business enterprise that became worth more dead than alive.

In the east, much of the EL remains, as commuter railroad routes in New Jersey (see NJ Transit), and as freight lines in New York (north of the last still-active passenger station at Port Jervis), Pennsylvania, and Ohio. West of Youngstown, Ohio, however, the route is gone, having been abandoned and removed before 1980 in favor of parallel former Penn Central lines.

External links

• Erie Lackawanna Historical Society (http://www.erielackhs.org/)

References

• Grant, H. Roger. Erie Lackawanna: Death of an American Railroad. Stanford, CA: Stanford Univ. Press, 1994