PENN CENTRAL Merger Forty Years Ago Today

Discussion relating to the Penn Central, up until its 1976 inclusion in Conrail. Visit the Penn Central Railroad Historical Society for more information.

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Otto Vondrak
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PENN CENTRAL Merger Forty Years Ago Today

Post by Otto Vondrak » Fri Feb 01, 2008 11:00 am

On February 1, 1968, the New York Central and the Pennsylvania Railroad, two of the largest railroads in the east, merged to form the Pennsylvania and New York Central Transportation Company- PENN CENTRAL. The new Penn Central was a diversified investment portfolio that not only controlled more than 30,000 miles of track, it also managed several subsidiaries in real estate and energy development. Poor planning and a declining northeastern economy doomed the merger, and Penn Central declared bankruptcy in June, 1970. Investigations revealed poor performance and questionable management going back to the leadership of Stuart Saunders' Pennyslvania Railroad. It was the largest corporate bankruptcy in America at the time, and it had the added effect of dragging down other northeastern operators with it. The violent after-effects of Hurricane Agnes in 1972 dealt a knockout blow to the northeastern railroads, which set forth a process for the Federal government to create a reorganization plan. The result came on April 1, 1976 when the railroad properties of six northeastern railroads were combined into the government-backed Consolidated Rail Corp.- CONRAIL. Penn Central Corporation emerged from bankruptcy and continued to manage its portfolio of real estate investments. Through the 1980s, the company slowly transformed itself into an insurance underwriter, formally changing its name in 1994 to American Premiere Underwriters, Inc. (AUPI). Vestiges of Penn Central exist on paper, continuing ownership of the historic Grand Central Terminal (leased to New York's Metropolitan Transportation Authority). For more information on Penn Central, see these links:

http://railroad.net/forums/viewforum.php?f=95

http://en.wikipedia.org/wiki/Penn_Central

http://www.pcrrhs.org/

-otto-
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