And since we have a lot of people interested in what the railroads of America look like today (and I've handled Amtrak in a previous post

), this is the world of freight railroads in America today.
America's freight railroads found themselves fighting World War II as much in many ways as the country's armed forces did, handling more cargo and passengers than ever before in a hurculean effort that earned them sizable sums of money but wore down their infrastructure, and the advent of long-distance trucking in the 1930s, which grew exponentially with the building of the Interstate Highway System starting with the Transport America Act of 1956 (which provided billions in subsidies to railroads, but which did nothing to deal with the underlying issues the railroads faced) kicked that into high gear. Passenger train traffic suffered from the same problems by the late 1950s as well, as jet airliners and ever-more-efficient air travel stole passengers away from even the finest passenger trains, and the expanding usages of cars for commuting and electricity for home heating took away many of the railroads' traditional customer bases. By 1960, the still highly-regulated railroad industry, particularly companies with increasingly-unprofitable lines, was simply unable to compete in many areas of freight transportation, even as the Transport America Act allowed firms to get into innovation, and men like Robert Young and Alfred Perlman at New York Central, William Graham Claytor at Southern Railway (Claytor would later lead Amtrak as well), John Ingram at the Rock Island, Benjamin Heineman at Chicago and North Western, Donald Russell at Southern Pacific and Louis Menk at Northern Pacific, took as best advantage of it as they could. But the combination of hard-shelled management, restrictive union rules (firemen were not eliminated from most railroads until the mid to late 1960s, despite being almost entirely unnecessary with the use of diesel locomotives) and the inability to make their own freight rates caused many problems in the industry, and those railroads stuck with large unprofitable operations found themselves with albatrosses they simply could not shake, regardless of equipment modernization. To many lines, mergers were the answer.
The mega-merger movements that began with the merger between the Virginian and Norfolk and Western railroads in 1959 grew to include some huge players, the largest successful private-sector led ones by far being Burlington Northern (from the Great Northern, Northern Pacific, Chicago, Burlington and Quincy and Spokane, Portland and Seattle) in 1970 and the Union Pacific's acquisition of Missouri Pacific in 1980, but the actions of Union Pacific's executives during the Missouri Pacific takeover and during the years of merger debates with the Chicago, Rock Island and Pacific during the 1960s and 1970s came to light in January 1980, causing the chairman of the Interstate Commerce Commission to resign in disgrace (he would later be convicted of bribery) and Union Pacific's relations with rival railroads to dramatically sour. After the Union Pacific Bribery Scandals of 1980 rattled the ICC to its core and resulted in the Staggers Act for railroad deregulation in March 1981, Several other huge merger proposals - Southern Pacific and Santa Fe and Chessie System and Seaboard System most of all - were killed before they ever happened, namely in an attempt to keep competition in as many markets as possible at a time when freight railroading in America, thanks to bulk cargo movements, containerization and piggyback traffic, was growing rapidly. While mergers were effectively halted by the Bribery Scandals, agreements between railroads were not, and while smaller mergers continued to happen in the years after, the way most companies fought back was with other moves. SP's takeover of the Missouri-Kansas-Texas in 1976 and agreements with the Rock Island in 1981 gave Southern Pacific a main line from its sunset Route at Tucumcari, New Mexico, to Chicago, making it overnight a major rival to the Santa Fe, while the Railroad Alliance, formed in June 1982 between the Rock Island, Erie Lackawanna, Denver and Rio Grande Western and Western Pacific, was effectively a merger without it actually becoming one.
Where the problems the mergers sought to fix was in the Midwest and Northeast. After Robert Young's suicide in 1958 put Alfred Perlman in charge of the New York Central, the northeast began shifting. The New York Central made a quite determined effort to take over the Baltimore and Ohio in the 1960s, but this ultimate failed, with the controlling interest in the B&O taken over by the Chesapeake and Ohio in 1963, ultimately resulting in the creation of Chessie System in 1971. Facing problems, the mighty rivals of the Northeast - the New York Central and Pennsylvania Railroad - began merger talks in 1962, to the shock of the industry. The ICC approved the merger in 1966....but only if the company impressed the bankrupt New York, New Haven and Hartford and Central of New Jersey into the system. The NYC balked loudly at this, pointing out that the Pennsylvania by 1966 was nearly insolvent and it was a similar story with the other railroads the ICC was demanding get involved in the proposed Penn Central company. Seeing it as a highly likely possible disaster, the NYC bailed out and stuck it out on its own, while the Pennsylvania, whose merger hopes being dashed ultimately killed them, declared bankruptcy on January 18, 1970, declaring its intention to sell off its system in a Chapter 7 bankruptcy scenario. The state of Pennsylvania rapidly halted that, providing sufficient help to the Pennsylvania to allow it to keep operating, but by the early 1970s the company's long-suffering infrastructure was getting downright dangerous. The Pennsy's bankruptcy immediately dragged just about everyone else in the region into bankruptcy with them - the Lehigh Valley, Reading Company, Delaware and Hudson, New Haven, Central of New Jersey and New York, Susquehanna and Western all declared bankruptcy in the winter or spring of 1970, largely as a result of the loss of the Pennsylvania's interchange traffic. The NYC and Erie Lackawanna held on valiantly, but the destruction wrought by Hurricane Agnes in June 1972 did both of them in due to extensive track damage, and both declared Chapter 77 bankruptcy in July 1972. While the situation wound its way through the courts, state halls and Congress, the situation in the Northeast got downright dangerous. On April 18, 1973, the situation went from bad to worse when a broken rail on the Pennsylvania Railroad's southern Tier main line just west of Columbus, Ohio, derailed a train with over three dozen tank cars of toluene, gasoline and liquid styrene into highway bridge abutment, causing a massive wreck that soon added three massive explosions from ruptured tank cars, killing eighteen people (and causing the greatest single loss of life in a day to the Columbus Fire Department, which lost eleven firefighters) and injuring over 160 others. But that was nothing compared to what happened in Monaca, Pennsylvania, on May 15, 1975.
On that day, the PRR-owned Monaca Bridge failed underneath a coal train and a train carrying industrial chemicals, including liquid chlorine, hydrochloric acid, sodium hydroxide and benzyl chloride, causing some 91 freight cars (including 42 tanker cars) and eight locomotives to plummet into the Ohio River, where most of them were broken open by the heavy coal cars landing on them. The result was one of, if not the worst, environmental disasters in American history - the disaster effectively killed all life in the Ohio River from western Pennsylvania to southern Indiana and severely polluted the drinking water of over five million people, causing 87 civilian deaths (along with four train crew members) and sickened as many as 200,000 people. When the ICC investigation into the disaster discovered that the bridge was structurally deficient and that the Pennsylvania knew of the problem, the company was jackhammered with class-action lawsuits, and on September 27, 1975, the Pennsylvania was ruled ineligible for organization and ordered to be broken up and sold off. The disaster, however, put paid to that idea, as the populations in Pennsylvania, Ohio, Indiana and Kentucky, understandably livid over what had happened in Monaca, angrily made it clear that they would not allow any of the Pennsylvania's operations to continue under new owners, and fought it viciously in the courts. The damage was done, and while the other railroads of the region bore no responsibility for what happened in Monaca (and both Erie Lackawanna and New York Central, along with Chessie System, earned major commendations for hauling in relief supplies and assisting with both mitigation and recovery efforts), they too took awful beatings from the court of public opinion. Wedged between a population already furious from the political mayhem of mid-1970s America, a desire not to see major transportation corridors rendered useless and railroads struggling to stay alive, the only option was nationalization.
Consolidated Rail Corporation, better known as Conrail, was the result, and with it was a complete re-organization of America's Northeastern Railroads. New York Central, Erie Lackawanna, Chessie System and Norfolk and Western were all part of the play. The Hail Mary toss of the crumbling Milwaukee Road into Conrail in the winter of 1976-77 changed Conrail's missions dramatically, but it entered the system nonetheless, and Conrail's operations began on September 1, 1978 - and with the company spending over five billion dollars on much-needed modernization between its founding and 1990. Conrail's problems and the mounting issues at other railroads ultimately brought on the Staggers Act in March 1981, dramatically deregulating the railroad industry.
Conrail was state owned from Day One, but the trend of employee-owned railroads, which had begun with the Chicago and North Western in 1972, swelled rapidly, and after the failure of the Santa Fe-Southern Pacific merger, the Southern Pacific was sold back to its employees in 1984. Employee-owned Southern Pacific, however, became the story of a lifetime, and its legendary boss, Donald Russell, said of it in 1989 (months before his death at age 90) that "I never imagined our boys and girls would truly put the world on their shoulders like they have, but the proof is in front of me, and its incredible." While the employee-owned Chicago and North Western and Delaware and Hudson had reputations for being very good places to work and pushers of technology, they had nothing on the hustling SP of the 1980s and 1990s, led by Robert Krebs and Joshua DeVaughn and chasing every nickel they could, while raising a public profile. The idea of public image being important was for most railroads driven in by public fury after the disaster at Monaca, and it showed - many railroads became loud supporters of local businesses, proudly spoke of the communities they served, backed local development efforts (up to and including in some cases fighting for local interests against bigger firms) and flashy paint schemes and advertising campaigns. The paint scheme idea was first thought up by John Ingram at the Rock Island, who had the railroad's rolling stock painted in bright blue and white paint and bold "THE ROCK" lettering. It didn't take long for that to catch hold - Santa Fe's silver and red "Super Fleet", Conrail's blue and silver "Mercury" trains, Southern Pacific's flashy "Daylight" paint schemes, Chessie System's beloved "Chessie Cat", Burlington Northern's "Hustle Muscle" units, New York Central's "Silver Lightning" locomotives and Southern's "Southern Serves the South" logo being splashed across everything the railroad owned was was the result. When combined with ever-improving safety records, substantial profits and massive growth in traffic resulting in new hiring, it resulted in the railroads themselves seeing their public profiles improved dramatically in the 1980s, helpful as America moved into an industrial boom during the time period.
Such was the growth in demand for rail transport, brought on by containerization, growing bulk traffic, the railroads' ability to move even huge loads (like the Boeing 737 airliner fuselages carried by Burlington Northern from Kansas City to Seattle for assembly into complete aircraft) led to huge growth in rail traffic in America, with the total tonnage moved by the railways growing nearly four-fold between 1975 and 2005. As this traffic grew, so did shippers' demands, but also in many cases did the desires of many involved to assist in this endeavor. The selling of the Lehigh Valley Railroad to Norfolk and Western as part of Conrail's organization personified this - the last in a long series of massive mergers by the Norfolk and Western (which from the late 1950s to late 1970s went from small-sized but highly efficient coal-hauler to a major player in the Midwest through its flurry of mergers and acquisitions), the N&W used the Lehigh Valley as its way to serving New York City and expanding beyond its traditional port base of Norfolk, and in the process found cement maker Heidelberg and steel maker Bethlehem Materials wanting to assist in the process. The N&W ended up rebuilding every inch of the Lehigh Valley's New York-Buffalo main line with their own proprietary design of reinforced-concrete crossties and 175-pound rail, which when combined with the standard of service expected of the N&W turned the Lehigh Valley from a somewhat-slow anthracite hauler into the corridor of some of the fastest freight operations, with by the mid-1980s Norfolk and Western piggyback, container and refridgerator trains moving at as much as 80 mph on the route, something unthinkable fifteen years before. As the merger movement came to a halt and the growth in traffic increased, the railroads resorted to ever-greater pushes against their competition, seeking both to increase the total market and their share of it.
The result was two decades of a horsepower race among the builders of diesel locomotives (General Motors EMD, General Electric and Chrysler-Alco were joined in 1991 by Morrison-Knudsen in this regard) and railroads responding to ever-bigger demands for motive power with rebuild programs, major growth in electrification (Conrail by far was the largest user of this, though Southern Pacific, New York Central, Burlington Northern, Southern, Canadian Pacific and Canadian National all also built hundreds or thousands of miles of electrified main lines in the 1960s to 1990s) and huge system growth, with everything being done from four-track main lines in the West (Union Pacific's Overland Route today from Cheyenne, WY, to Omaha, NE, is four tracks) to the reactivation of complete rail routes (Burlington Northern did this in the late 1980s, re-activating the entire former Northern Pacific Railway Stampede Pass route across the Washington Cascades from Seattle, WA to Missoula, MT), along with the creation of many smaller companies to rebuild lines (or in some cases build from scratch, though this was fairly rare) left behind by other railroads - the Wisconsin Central, Iowa Interstate[1], Montana Rail Link, Texas and Pacific, New England Central, Oregon and Pacific and Indiana Interstate came into being as a result of this. The horsepower race swelled by the early 1970s to the point where the three major locomotive builders offered 3600-horsepower locomotives (The EMD SD45, Alco Century 636 and General Electric U36C), while horsepower-hungry roads resorted to other ways, such as Southern Pacific's famed Krauss-Maffei ML4000 diesel-hydraulics (SP bought these in 1961 but sold them on to Canadian National in 1967, who operated them and 22 additional units until 1989) and Union Pacific's General Electric-built gas turbines (which operated on UP until 1969 and then, after being sold and rebuilt for the use of methanol fuel, the 25 'Big Blow' units served the Erie Lackawanna from 1972 until 1991). Electric locomotive technology advanced far faster than the diesels did - GE's E33, E44, E60 and EP70 electric locomotives, as well as EMD's GM6C/GF6C twins, GM10B and GM20BC electrics all proved to have power far beyond diesels of the time - up to 12,000 horsepower for the GM20BC - and when combined with the fact that most American railroad electrification projects included their own power stations and supply stations, meant that the efficiency of these units was excellent, though the huge capital cost ultimately slowed many electrification projects.
The entry of Morrison Knudsen to the locomotive world in 1991 with the powerful Caterpillar-engined MK5000C drove the power race to the ultimate heights, with the GE AC6000CW, EMD SD80MAC and Alco Millenium 250DP pushing the envelope for single-engined diesel power. The growth of power matched the lengths and speeds of trains, with even heavy bulk trains in Midwestern and Eastern locations by the 1990s moving at speeds of up to 65 mph for the heaviest manifest and bulk trains and as much as 90 mph for light load and high-speed trains. Cabooses, which disappeared from many mainline trains in the early to mid 1980s, re-appeared in many cases a decade later with modifications - remote-controlled diesel engines and air compressors were installed in many of these in an attempt to improve braking performance, a precursor to the remote-controlled mid-train designated power units that grew into the trains in the mid to late 1990s. Computerized load tracking and package tracking systems were soon integrated into the railroads, aiming to allow the railroads to work with companies like FedEx, UPS, DHL and Purolator to handle packages directly to destinations. At the same time, the development of dozens of trucking co-operatives was something railroads, Southern Pacific and New York Central most of all, absolutely loved and encouraged as a way of expanding railroad business far beyond large companies and contracts to just about anybody with any size load.
[1] This Iowa Interstate is not the OTL one, which is primarily former Rock Island tracks, but the former Chicago Central lines, which run pretty much parallel to OTL Iowa Interstate lines