Railroad mergers 1948

[Joe Bonkers]

Just reading issues of TRAINS magazine from the first few months of 1948 on the complete TRAINS DVD set, and I noted that these mergers were either being attempted or touted around that time:

New York Central plus Chesapeake & Ohio (this is the biggie, a la Robert Young)

Lackawanna plus Nickel Plate

Gulf, Mobile & Ohio plus St. Louis-San Francisco (Frisco)

Lehigh Valley plus Wabash

Atlantic Coast Line plus Florida East Coast

None of these mergers happened in OTL. But suppose they all did, in 1948-49, let's say?

Also being touted at the time was the idea for a new union station in lower Manhattan which would connect with both Hoboken and Jersey City in a loop pattern and eliminate the need for the CNJ, Erie and DL&W stations in New Jersey. The railroads in question couldn't have possibly afforded this, and no one else was willing to pay for it...but what if someone was?

So, fellow railroad nerds: what follows from these mergers? What effect do they have on the US railroad system subsequently?

(Big picture: in keeping with the usual consensus/approach taken in timelines of this sort, let's also suppose that something that provokes a relative shortage of petroleum - the Soviets gaining control of the Middle East, for example - creates a new lease on life for the railroads. Or not. I'd be interested in people's thoughts either way.)

 

[DougM]

How about you go back a bit farther and let the Van Sweringen brothers combine thier railroads the way they wanted. You would get the C&O merging with the Pere Marquette abd the Hocking Valley and the NKP at the least and possibly with Erie. As they had control of all of that before they were forced to divest.

 

[Mark E.]

We would need to stop/delay passenger jet air travel or make it impractical. After all, passenger rail travel was still popular into the fifties.

 

[TheMann]

NYC+C&O is a pretty smooth one provided the Pete Marquette isn't in it, but it's not great news for the PRR, genuinely bad news for the B&O and N&W and worse for everyone else. It's good for both sides in that the C&O's lucrative coal traffic is a big gain for the NYC and it allows them access to multiple extra markets, while the NYC network gets the C&O into the merchandise traffic business in a big way. Win win for both sides, provided the integration is done properly.

Lackawanna and Nickel Plate and Wabash and Lehigh Valley are all about extending the reaches of smaller railroads. The latter is an end-to-end connection and the former is close to it. The DL&W-NKP combo is a merchandise route if there ever was one, and the WAB-LV is as well though with a more direct route and run, the latter in particular could be a godsend for the Union Pacific and Missouri Pacific as an interchange partner.

ACL-FEL is a combination that fills in a network hole for the bigger player, though the passenger trains and phosphate and fruit unit trains that the FEL and ACL run would surely benefit. It's a loss for the Seaboard though, but not a huge one.

 

[Joe Bonkers]

NYC+C&O is a pretty smooth one provided the Pete Marquette isn't in it, but it's not great news for the PRR, genuinely bad news for the B&O and N&W and worse for everyone else. It's good for both sides in that the C&O's lucrative coal traffic is a big gain for the NYC and it allows them access to multiple extra markets, while the NYC network gets the C&O into the merchandise traffic business in a big way. Win win for both sides, provided the integration is done properly.

Lackawanna and Nickel Plate and Wabash and Lehigh Valley are all about extending the reaches of smaller railroads. The latter is an end-to-end connection and the former is close to it. The DL&W-NKP combo is a merchandise route if there ever was one, and the WAB-LV is as well though with a more direct route and run, the latter in particular could be a godsend for the Union Pacific and Missouri Pacific as an interchange partner.

ACL-FEL is a combination that fills in a network hole for the bigger player, though the passenger trains and phosphate and fruit unit trains that the FEL and ACL run would surely benefit. It's a loss for the Seaboard though, but not a huge one.

The PRR and N&W are an obvious merger-in-response, but the B&O is indeed in serious trouble, and may seek to join either NYC+C&O or PRR+N&W in order to avoid being left out in the cold. The Erie is also going to need to find a dance partner, and fast.

 

[Joe Bonkers]

How about you go back a bit farther and let the Van Sweringen brothers combine thier railroads the way they wanted. You would get the C&O merging with the Pere Marquette abd the Hocking Valley and the NKP at the least and possibly with Erie. As they had control of all of that before they were forced to divest.

The Vans combination would have been very bad news for both DL&W and Lehigh Valley, as it would swallow up the NKP, a vital western connection for both at Buffalo; that traffic would be diverted to the Erie. One of them would probably look to the Wabash, but the other might try to get under the wing of one of the big Eastern roads as protection - NYC, PRR or B&O.

 

[Not James Stockdale]

The ACL/FEC merger only would have been worthwhile if ACL wanted to directly serve Miami. The only lines going there at the time were (and still are) FEC from Jacksonville and SAL (now CSX) from Auburndale. FEC's line is far superior for any traffic going north of Jacksonville, but ACL and FEC were already cooperating on passenger and freight traffic to compete with SAL to Miami. On the other hand, FEC had been in receivership for 17 years, with 13 to go before Ball bought it, so I don't imagine it would have been a tough merger if ACL had the capital.

If the merger does go through, FEC is really just a trunk route connecting the ACL and SAL lines through Jax to Miami faster than any routes through central Florida. If the ACL/SAL merger goes through in 1967, the only duplicated route would be the Auburndale Sub, but that might stay open (at least for a while) for access to the Sebring region of south central Florida or as a backup for the FEC line. CSX only runs one or two manifest freights a day plus Amtrak up to Auburndale, so I don't see much of a future for that line.

 

[Joe Bonkers]

No opinion on GM&O plus Frisco? That one went pretty far: they were actually in merger talks.

 

[TheMann]

No opinion on GM&O plus Frisco? That one went pretty far: they were actually in merger talks.

That's an interesting combination, it would almost certainly make the Illinois Central Gulf never happen and would make them a good rival to the IC itself and the Missouri Pacific.

 

[Lance D Geshiwlm]

The NYC marriage with the C&O would have never happened. The New York Central was still strong in post WWII economy and they would have wanted to control the new company. The Alleghany Corporation and the board of the C&O would want control as well; much like what they had when they took over the B&O in the early 1960s. Also the C&O had just merged the Pere Marquette into the company in 1947 and the ICC would never approve such consolidation in Michigan where the auto industry was booming at the time. Such a merger would created a monopoly in the automotive sector for Eastern railroads.

Let's not forget that both the Virginian Railway and the Nickel Plate would have greatly opposed this due to harm this would have caused to them. The Virginian and NYC were key interchange partners up until the N&W took over in 1959. Many shareholders of the NKP also held C&O stock at the time dating from their brief marriage under the Alleghany Cooperation and the Van Swearingens. Such a merger could have produced as much harm to them as it would have gain.

A New York Central and Chesapeake & Ohio union had a better shot in the late 50's after corporate tax laws had changed unfavorably, and the NYC was on their knees asking for the C&O to save them. The railroad industry had changed dramatically in those 10 years as we all know.

 

[Lance D Geshiwlm]

The idea of a merger between the G,M&O and St Louis - San Francisco (Frisco) is a combination that would have made sense, and likely would have kept the GM&O from merging with the Illinois Central just over 20 years later. Their merger plus the Central of Georgia in the late 50s would have created a rather strong railroad across the south and into the Midwest. Such a railroad would have definitely changed the landscape for the timultuous decades that lay ahead for the industry.

I too have a copy of the 1948 Trains article, and Ike Tigritt was just the man to put together such a merger. Sadly he would have to convince a Frisco upper management team to be subservient to the smaller GM&O team. Similarly since the Frisco had just exited their final bankruptcy in 1947, the shareholders of the GM&O would see their value decrease unless a radical exchange pertaining to shares in the new company was approved. In time, this combination would benefit all parties.

The new company (say the G,SL&SF) would have benefited from GM&O's recent acquisition of the Alton which never reaped the rewards of the actual merger in 1944. In a similar fashion, since the Frisco did acquire the majority stock of the C of G in the 1950s, this new company would have gone about the acquisition the right way. The GM&O had a history of putting together railroads, and they knew how to pursuade the ICC to approve it. Such a combination knowing the prosperity of railroads in the south with shifting manufacturing starting in the 1960s could only lead to greater success in the long run for this hypothetical railroad.

The question that I have now is where would the "new Frisco" have fit into the merger mania of later years.

 

[Kevin C. Smith]

Just reading issues of TRAINS magazine from the first few months of 1948 on the complete TRAINS DVD set, and I noted that these mergers were either being attempted or touted around that time:

New York Central plus Chesapeake & Ohio (this is the biggie, a la Robert Young)

Lackawanna plus Nickel Plate

Gulf, Mobile & Ohio plus St. Louis-San Francisco (Frisco)

Lehigh Valley plus Wabash

Atlantic Coast Line plus Florida East Coast

None of these mergers happened in OTL. But suppose they all did, in 1948-49, let's say?

Also being touted at the time was the idea for a new union station in lower Manhattan which would connect with both Hoboken and Jersey City in a loop pattern and eliminate the need for the CNJ, Erie and DL&W stations in New Jersey. The railroads in question couldn't have possibly afforded this, and no one else was willing to pay for it...but what if someone was?

So, fellow railroad nerds: what follows from these mergers? What effect do they have on the US railroad system subsequently?

Taking these in reverse order...

1) Union Station in lower Manhattan (or anywhere else) could be a Robert Moses project. With PATH or NYC (or the state of NY) absorbing the upfront costs, it might have been possible.

2) ACL + FEC, GM&O + SLSW: Low (or low enough) impact that they might have been attainable. Their impact on subsequent developments would be demonstrating the benefits of end-to-end, or extraterritorial, mergers in the postwar world.

3) LV + WAB, DL&W + NKP: The Lackawanna and the Nickel Plate were the traditional interchange partners for each other so this would probably be a smooth merger. The Lehigh Valley an the Wabash would be a natural counter to it (though the connections between the two in Buffalo would be a bit convoluted, imo). Both the LV and the WAB were under Pennsylvania Railroad influence to some degree, iirc. The additional length of haul, elimination of duplicate terminal expenses, and expansion of traffic base might be enough to keep these two new lines afloat in the 1960's-70's.

These end-to-end mergers may set the pattern, and avoid the OTL approach of parallel mergers which were intended to shrink (then) excess facilities and employment.

4) All of this leads us to the big one, NYC + C&O: Drawing on the opening chapters of "The Men Who Loved Trains", this failed merger ended up the butterfly for the debacle that was Penn Central. A ITTL successful combination of only the two almost certainly allows the Pennsy to absorb the Norfolk & Western, which was already a valuable subsidiary. As I recall, the C&O originally offered to consider merging with the NYC after it had completed absorbing the Baltimore & Ohio. If this still happens, look for one of the #3 merged lines above (probably LV/WAB) to become part of the Pennsylvania. The Erie, and the NKP/DL&W (along with the Reading and the Central of New Jersey) would, I expect, be parceled out between the two big ones. However, if the B&O does not become a target for the C&O/NYC, I could easily see it becoming the backbone of a third system: B&O, RDG, CNJ. This will get either the ERIE or the NKP (with or without the DL&W)-or possibly both-to round it out. WAB/LV probably goes to PRR.

This changes the eastern map from 4 "full" trunk lines (PRR, NYC, B&O/RDG/CNJ, ERIE...or, as Trains editor David P. Morgan once put it, "...the colossal, the magnificent, the historic-and Gould.") and 2 "partnered" trunk lines (NKP/DL&W, WAB/LV) to a total of 3 "full" trunk lines reaching not just the port of New York-New Jersey, but also the tidewater ports for Appalachian coal, with all the solid earnings that once implied (PRR/N&W/LV/WAB, NYC/C&O, B&O/RDG/CNJ/ERIE/NKP). I assume the DL&W will go to the NYC/C&O for lack of any better place (and it fits well enough).

This butterflies away a HUGE amount of postwar RR (and US political) history. These systems would be more financially resilient, so what came to be called the "Northeast Railroad Problem" is delayed considerably, if not avoided entirely. NO Penn Central bankruptcy (at the time, the largest ever), which means no Conrail, which means no modern Norfolk Southern or CSX. Amtrak may not happen. The Staggers Act may not happen. The entire approach to the Milwaukee Road and Rock Island bankruptcies may be entirely different (if, indeed, those lines are still extant). Any problems that do occur in any similar fashion to OTL happen in a different political atmosphere in Washington. Rather than an emboldened Congress vs and embattled Nixon, you have the political/economic uncertainty of the Ford/Carter administrations, and the radically different approach of the Reagan administration.

 

[Duke Andrew of Dank]

No opinion on GM&O plus Frisco? That one went pretty far: they were actually in merger talks.

On one hand, that would butterfly ICG and let the Fisco get to Chicago and New Orleans. But on the other hand, I frankly feel Frisco better fits the Santa Fe for the obvious reasons of St. Louis and the Deep South.

 

[Kevin C. Smith]

On one hand, that would butterfly ICG and let the Fisco get to Chicago and New Orleans. But on the other hand, I frankly feel Frisco better fits the Santa Fe for the obvious reasons of St. Louis and the Deep South.

You are right about that, imo. It certainly seems to have worked out in the present BNSF (though it came into the fold via its earlier merger with Burlington Northern). But inclusion with Santa Fe is more for AT&SF's benefit than Frisco's. However, GM&O + SL-SF would be to Frisco's benefit (either way, GM&O is always going to be the little fish eaten by a bigger one). It also, I would think, give more use to GM&O's ex-Alton "west end" line to Kansas City-which, iirc, was always lightly trafficked.

I may have to tweak that arrangement in my own project of RR consolidations.

 

[Duke Andrew of Dank]

I would think, give more use to GM&O's ex-Alton "west end" line to Kansas City-which, iirc, was always lightly trafficked

I actually had the idea of splitting the GM&O's different lines and giving them to various roads...

Mobile & Ohio: Goes to Southern to give them St. Louis-New Orleans
Chicago & Alton: Goes to MoPac to let them more directly reach Chicago (in my TL, the MoPac got the CGW in 1965, but its link to Chicago is too indirect to be used well)
Gulf, Mobile, & Northern: Possibly the Burlington Northern or Frisco. The former mostly because they link at Paducah, KY and the BN could compete with the IC in this. The latter so it can serve New Orleans.

 

[Kevin C. Smith]

I actually had the idea of splitting the GM&O's different lines and giving them to various roads...

Mobile & Ohio: Goes to Southern to give them St. Louis-New Orleans
Chicago & Alton: Goes to MoPac to let them more directly reach Chicago (in my TL, the MoPac got the CGW in 1965, but its link to Chicago is too indirect to be used well)
Gulf, Mobile, & Northern: Possibly the Burlington Northern or Frisco. The former mostly because they link at Paducah, KY and the BN could compete with the IC in this. The latter so it can serve New Orleans.

These are all very good. Though, the Southern had the M&O (iirc), and sold it to the GM&N...so I don't know what to do with that. Though the ever-reliable Wikipedia says that a merger of the M&O/SOU was attempted in 1902 but was blocked by the State of Mississippi so that is an easy butterfly.

 

[Duke Andrew of Dank]

These are all very good. Though, the Southern had the M&O (iirc), and sold it to the GM&N...so I don't know what to do with that. Though the ever-reliable Wikipedia says that a merger of the M&O/SOU was attempted in 1902 but was blocked by the State of Mississippi so that is an easy butterfly.

I actually was wrong about the BN and GM&N linking at Paducah. So I'd probably give it to the SLSF.

 

[Kevin C. Smith]

I actually was wrong about the BN and GM&N linking at Paducah. So I'd probably give it to the SLSF.

Well, the GM&N seems to have thought they did.
http://www.gmohs.org/GMORR/GMNMapFull.htm

(It may have been on trackage rights? But I would say that it still counts.)
"Coupled with this extension to Jackson, Mississippi, and the New Orleans arrangement, was a plan to effectively extend the road northward beyond Jackson, Tennessee. An agreement was reached with the Nashville, Chattanooga and St. Louis Railway which permitted GM&N trains to operate into Paducah, Kentucky. The GM&N was to pay a specified price for each car of freight moved over this 145-mile stretch of NC&StL line. GM&N’s own engines and crews would make this run. Thus, the service capacity of the road would extend north to Paducah, even though the GM&N did not own or lease the trackage over which it was to operate.

This provision for freight movement to Paducah was only part of the story. The new service pattern was to reach much farther because one of the Midwest’s stronger carriers, the Chicago, Burlington and Quincy had a line into Paducah which reached St. Louis, Chicago and almost all of the central Midwest. A cooperative preferential traffic agreement would thus open New Orleans and the south to the CB&Q and the midwest to the burgeoning GM&N."

http://acmeme.com/gmo/chapter__v.htm​

 

[Duke Andrew of Dank]

Another idea I had is if the Burlington Northern does not sell off the C&S south of Pueblo.

Instead, they use the Missouri-Kansas-Texas as the better link. Which would still allow Santa Fe to get the Frisco.