July 12, 1933
Following a spirited debate, President Roosevelt signs the NRRRA into law.
Although many railroad executives (particularly those in danger of losing their jobs) denounce the plan as socialistic, the railroads have not been able to form a universal front of opposition to the new act. Many see the NRRRA as advantageous to the railroads: they will be freed from the burden of crushing fixed costs, including property taxes, on their tracks and buildings, with capital costs limited mostly to new locomotives and rolling stock. Also, the catastrophic collapse of the New York Central and its ripple effect, which has caused the entire industry to begin stumbling toward a similar crisis, creates a sense of desperately needed reform which overrides concerns about the approach.
Among the railroads, the biggest opponent is the biggest potential loser: the Pennsylvania Railroad. The PRR, which has watch the flailing of rival NYC with a smirk, now faces the loss of its valuable Norfolk & Western subsidiary, as the Ripley Plan assigns that railroad instead to a system that will include the Wabash, Lehigh Valley and Seaboard. The PRR, of course, is also the most traditional, crusty and hidebound of all railroads (“The Standard Railroad of the World”), and therefore the most resistant to change in general.
Joseph Eastman of the ICC is appointed the first president of the USRC (which is under the jurisdiction of the Interior Department). He appoints as his chief lieutenants Frederick Prince, a Boston lawyer and past railroad president, along with Barriger and Poland. Ripley declines the presidency due to age but will continue to act as President Roosevelt’s informal transportation adviser.
September 4, 1933
The Pennsylvania Railroad Company and its holding company, Pennroad, file suit in U.S. District Court in Philadelphia to overturn the new law. The railroad's lawyers ask for an expedited finding.
January 2, 1934
The process of assessing the fair market value of the physical plant of American railroads, a task assigned to Treasury agents, begins. The District Court refuses the PRR's request to grant an injunction stopping the assessment pending its lawsuit.
January 8, 1934
The board of directors and management of the Pennsylvania Railroad hold a stockholders' meeting at the Bellevue Stratford Hotel in Philadelphia. The PRR's president, W.W. Atterbury, and the rest of the PRR's board - the stuffiest in railroading, which is a true accomplishment - pronounce their determination to resist President Roosevelt's "socialistic" plans. Atterbury growls that he will "see the Pennsylvania Railroad shut down completely" before he allows its infrastructure to be "confiscated" by the government. His tirade draws only a mixed reception from the board; many stockholders are worried about what might happen if the PRR fights the new law and loses.
January 10, 1934
It takes only two days for President Roosevelt to respond. "I am the President, and I am charged by oath with implementing and enforcing the laws of our country," he tells newspaper reporters at the White House. "I fully intend to fulfill that oath." The reporters press him for specifics: does that mean he will call Atterbury's bluff? He will. He makes it clear that if the Pennsylvania or any other railroad shuts down in defiance of the law, he will immediately request congressional authorization to order the United States Army, under the authority of protecting the mail (which travels mostly by train), to seize control of the railroads. With the Congress firmly in control of the President’s party, his threat is hardly a hollow one.
There is no official response to the President's words from Atterbury, but the PRR's employees quietly receive orders to cooperate with the Treasury assessors. The threat of a seizure of the railroad is simply too great to permit the PRR to play the game of non-cooperation. Other railroads, who have been watching events, rush to comply with the new law as well, and some who have offered tacit support to the PRR in its lawsuit now withdraw it. Before long the PRR stands with only its subsidiaries, like the Long Island Rail Road, in opposition to the law.
February 18, 1934
A financier by the name of Robert R. Young quietly begins buying the stock of the Pennsylvania Railroad, in conjunction with a group of stockholders who are disgruntled by the current management's attitude and fear that when the new law is implemented, the PRR will be left out in the cold. Young points out that the PRR's insular management is not known for innovation, saying, "It's time to get the dead wood out of Philadelphia."