The CNJ was owned by the B&O???

I was looking at some diagrams of the CR formation and it showed that the B&O (CSX) actually owned the CNJ. The B&O was very wealthy why didn't it try to prop up biz on the CNJ kinda like inject cash into it? Maybe try to keep it floating to at least break even? Or was it just a lost cause by the late 60s and CSX just wanted to get rid of it.

CNJ was actually jointly owned by the B&O and the Reading. Both railroads ran trains to the CNJ Newark station and power from both parents could be found on the CNJ from time to time.

glennk419 wrote:CNJ was actually jointly owned by the B&O and the Reading. Both railroads ran trains to the CNJ Newark station and power from both parents could be found on the CNJ from time to time.

Don't forget it worked the other way around! CNJ power could regularly be found on the Reading.

Was the CNJ joint owned, at one time, by the B&0 and Reading, or was it more complex?
I think the B&O had some ownership of the Reading, which in turn had some in the CNJ? or was it direct part ownership of the CNJ by the B&O?
I know the B&O/Reading/CNJ or predecessors, had various joint operating agreements for freight and passenger service to the NY area, to compete with the PRR, early on. (1860's thru 1900) Not sure, however, how the various ownerships went (At one time when the B&O went into receivership, circa 1900, it was owned/controlled by the PRR!!)

I always understood it as the BandO and Reading kinda helped out and propped up the CNJ so they could keep their access to the NY market. It was in their best interest to keep the CNJ afloat, while at the same time, not having to directly own it, and therefore be responsible for the losses they were encountering.....

A good example is the "CNJ Geeps" they were actually built to BandO specs, numbered after the last BandO GP40, and even painted in BandO paint! the BandO backed the lease, and if the CNJ went bye bye, the BandO would reimburse the State of NJ for the locos and they would simply have the C N J and the round lady liberty herald on the nose replaced with a round dome herald and B & O on the long hood. No coincidence there....

CarterB wrote:Was the CNJ joint owned, at one time, by the B&0 and Reading, or was it more complex?
I think the B&O had some ownership of the Reading, which in turn had some in the CNJ? or was it direct part ownership of the CNJ by the B&O?
I know the B&O/Reading/CNJ or predecessors, had various joint operating agreements for freight and passenger service to the NY area, to compete with the PRR, early on. (1860's thru 1900) Not sure, however, how the various ownerships went (At one time when the B&O went into receivership, circa 1900, it was owned/controlled by the PRR!!)

It is my understanding that, the B&O owned a controlling interest in the Reading and the Reading owned a controlling interest in the CNJ. Especially in the case of the latter relationship, the Reading may have owned 100% of CNJ common stock.

The chart I have shows the CNJ being owned directly by the B&O but it also says the when the CNJ filed bk the B&O gave up it's ownership. Not saying that's accurate it's just what's in my book.

My original question is still why didn't the B&O (CSX) with all it's money prop up the CNJ??? It would give them access to the tri-state market. Was the CNJ red ink just way too heavy for B&O to even care anymore?

CNJ was owned by the Reading up until the end in 76. The B&O was moreso like said indirect through its interests in the Reading. If the B&O wanted to own its own line into the NYC area, it would have had to absorb both the Reading and CNJ (CNJ marketed connections to the B&O via the Reading) in order to create the network (yes the Reading made it to Port Reading but just for this case the I'm using the immediate NYC area.) The situation of both those railroads in the 60's made that very unattractive.

Also EL was owned by N&W through the Dereco holding company.

carajul wrote:I was looking at some diagrams of the CR formation and it showed that the B&O (CSX) actually owned the CNJ. The B&O was very wealthy why didn't it try to prop up biz on the CNJ kinda like inject cash into it? Maybe try to keep it floating to at least break even? Or was it just a lost cause by the late 60s and CSX just wanted to get rid of it.

CSX did not exist until 1980s, so it had nothing to do with CNJ's survival. The B&O got what they needed from the CNJ. When they decided they no longer needed the CNJ for access to the greater New York area, they withdrew their interests in the company. The "wealthy" B&O was not a charity that was going to throw good money after bad. I also think you might not understand the concept of "ownership," which usually amounted to a majority control of stock. This might allow the B&O to place a director or two on the CNJ board to ensure B&O's concerns and interests are addressed. It's not like the B&O was in daily control of the CNJ or otherwise ran the show. The ICC would have had something to say about that, I'm sure. And the B&O would have gained nothing from merging the CNJ, since that means the B&O would also assume CNJ's debt load (mortgages, loans, capital expenses, labor contracts, etc.).

Same relationship applied to Reading. They "owned" control by purchasing a majority interest in CNJ stock.

Any of this making sense? I'm talking in very broad terms here, other folks can fill in the specifics.

-otto-

This also might make more sense in the CNJ Forum?

Jtgshu wrote:I always understood it as the BandO and Reading kinda helped out and propped up the CNJ so they could keep their access to the NY market. It was in their best interest to keep the CNJ afloat, while at the same time, not having to directly own it, and therefore be responsible for the losses they were encountering...

Exactly. Control through majority stake in a railroad's stock was one way connecting railroads were able to extend their influence without having to take on the responsibilities of direct ownership. (Not to mention that merger proceedings could often take years... decades... to make their way through the courts and ICC hearings.)

The Reading owned most of the CNJ stock since the CNJ's bankruptcy of 1883. And for all purposes, the Reading thought they would be included in the B&O's future plans. Instead, to their shock and horror, the B&O quickly dumped all their stock in about 1973, at a great loss.


As I understood it, after its 1967 bankruptcy, the CNJ had indeed hoped to be part of a planned C&O, B&O, N&W merger (via the Reading). That would have included them into the CSX system. Once the Reading's stock was dumped, they knew their gig was up.

Also to note, at the time, the Penn Central bankruptcy, was the largest corporate bankruptcy to date, and caused the ICC to stall on any future large scale mergers, as the CSX merger would have been.

The CSX merger didn't take place until about 1980.

Jtgshu wrote:I always understood it as the BandO and Reading kinda helped out and propped up the CNJ so they could keep their access to the NY market.

Also to note, that the B&O owned the Staten Island Rapid Transit Co. until around 1971-3, when the SIRT reorganized its freight and passenger services. They may still be related to CSX today, I am not sure. But this would also have been a clear reason to keep control of the line to NY, atleadt up until the early 70's.

Otto Vondrak wrote:
CSX did not exist until 1980s, so it had nothing to do with CNJ's survival.

-otto-

While that is a true statement, the B&O was already operating under the "Chessie System" brand in the early 70s. (maybe 1973) That is probably why the map he referenced was updated to say CSX after that merger officially went through.