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Erie Lackawanna: The Death of an American Railroad, 1938-1992

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The years immediately following the end of World War 2 were good ones for the nation's railroads. Flush with cash after record war time traffic, they set about to modernise their worn out systems. Tracks were upgraded, diesels were purchased to replace aging steam locomotives, buildings were painted and rolling stock, passenger and freight, were upgraded or replaced.But by the mid-1950's, the circumstances had changed. Increased highway competition was cutting into revenues while archaic labor agreements ("featherbedding"), high property taxes and crippling government regulations colluded to sap the roads of cash. The situation was particularly desperate in the northeast leading some railroads to seek merger partners.Two such roads were the Erie and the Delaware, Lackawanna and Western (Lackawanna). Running side by side in many places, the two companies were quite different. The Erie had been in and out of financial trouble for much of its existence, its stock attractive only to "venturesome investors" ("when Erie common pays a dividend, there will be icicles in hell"). The Lackawanna by contrast, was a smaller, but sturdy anthracite coal hauler whose stock was suitable for "widows and orphans" paying a regular and generous dividend well into the 1930's.But by the late fifties, the two roads could not meet expenses by revenues alone, survived by selling assets (property, equipment, etc.).They entered into merger talks and in 1960 merged as the Erie lackawanna.This book deals with the pre-merger planning and post merger jockeying to keep the merged company solvent. The merger trend was in its early phase at the time, so there were some difficulties. The corporate cultures came into immediate conflict. While it was supposed to be a merger of equals, it soon became evident that it was an Erie takeover. Said a happy former Erie official: "The place is just like the old Erie" while Perry Shoemaker, the former president of the Lackawanna told his former colleagues: "I feel terrible. I sold all of you down the river.H. Roger Grant follows the ups and downs in the 16 year existence of the company, paying particular attention to the brief, but important tenure of CEO William White. A "railroad man's railroad man," he came to the EL in 1963. He had creditability with lenders who had been reluctant to extend financing and he is generally credited with implimenting policies which would eventually reduce the deficit and even produce a modest profit. He is probably best known outside the industry for re-instating the premier "Phoebe Snow" passenger train, a mostly sybolic gesture, but an effective PRmove and employee moral booster.There was some cause for optimism in the late 1960's. The EL was able to negotiate more favorable labor agreements and attract more lucrative on-line industry. It received permission to discontinue its last long distance passeneger train, a considerable savings, and was now receiving substantial subsidies from the state for its North Jersey commuter operation.But a recession in 1970 along with soaring interest rates rocked the still fragile EL and by early 1972, out of cash and hounded by creditors, the company again was "on the brink." In June, a storm, which washed out vast sections of road, finally pushed the company into bankruptcy, thus joining a group that would soon include all major northeast railroads and lead to the creation of Conrail in 1976.Railroad fortunes improved in the 1980's due to government deregulation, more reasonable work rules and highway congestion which reversed the flow of freight traffic to trucks. Auther Grant contemplates what all this could have meant to the EL had it come about sooner. We will never know, of course, but as is illustrated by the heavily footnoted text, EL officials managed to operate an efficient and remarkably safe system regardless of the immense challenges-no small feat. It is seeing how they did it that makes this book interesting.

The Erie Lackawanna, whose main line was New York-Chicago, was one of the more interesting US railroads. It was originally laid with a wider-than-standard track gauge, had wider clearances than competing railroads, and had unusually mild gradients, at least in Indiana and western Ohio. However, throughout its history, it was always clinging on for dear life, never a truly credible competitor against the larger railroads. Today, it's little more than a memory, and much of its main line track has been lifted. It's a shame, because railroad rights-of-way are impossible to assemble in this day and age. As the author points out, Erie Lackawanna would have been perfect as a 1990s-style carrier dedicated to container and `piggyback' trains, thanks to its generous clearances. The Erie Lackawanna was also noteworthy for avoiding all significant cities between New York and Chicago - a liability in its heyday, but an asset in the container era.

This book might more accurately be labeled a `financial history.' We're given an incredible depth of information about securities, taxation, business practices at headquarters, and biographical information of executives; the end result is thorough but something less than riveting. The most interesting portions describe the organizational turmoil resulting from Erie's acquisition of the Lackawanna, and the later acquisition by Conrail. Sadly, there is very little regarding rolling stock, stations, details of its route, or operating practices. This book has four excellent maps and about 20 black and white photos of rolling stock, plus various miscellaneous photos, especially formal pictures of executives.

H. Roger Grant has done a masterful job of presenting a side of the Erie Lackawanna story that never was told before publicly. He covers many of the costly mistakes made that had they been avoided, might have kept the railroad alive beyond 1976. He reveals the fact that during its first three years after the merger, the Erie Lackawanna experienced much the same kind of infighting by the Erie and DL&W factions as the Penn Central experienced with the Red and Green team feuding. It was this feuding that almost sank the company. Mr. Grant also points out equipment modifications to locomotives that should have been made to make the two diesel fleets more compatible with each other, but weren't until several years after the October 17, 1960 merger date, which merged the two railroads in name, but remained two in operation until after 1961.This, too nearly sank the company. i highly recommend this book to fans of this railroad.

This is a very well researched book and informative. However, not from the standpoint of what the railroad was like in terms of its rolling stock, customers, engine history, etc. It is more or less about the financial side of the railroad. Again, it is informative and researched in depth though at times it is a little boring, not much, but enough. I would recommend it as an introduction to this railroad and if you are interested in the financial collapse of eastern railroads during the fifties, sixties and seventies then this might be the book you are seeking.

This book is a history of the management of the Erie Lackawanna railroad, the unique railroad that goes from New York to Nowhere.

If you're riding New Jersey Transit's Main Line, Port Jervis line, Bergen County Line, Boonton Line, and many others, you're riding the ex-Erie Lackawanna. This railroad provided commuter services to New Jersey deemed so important that New Jersey started subsidized its operations in the early 1960s, well before it was fashionable. Even while Erie Lackawanna disappeared into Conrail, and while Conrail divested its commuter operations into New Jersey Transit, this essential railroad was remade into a modern electrified public service.

The Erie, and successor Erie Lackawanna, was always an also-ran competitor to New York Central and other lines for long-haul passenger service, and a 'because-we-should' competitor for affordable yet slower freight service. This book picks up its more detailed treatment of the railroad right when the author makes the case that the Erie informally merged with the Delaware, Lackawanna, and Western Railroad to help compete against larger and arguably better carriers. You can still see the parallel routes along the Delaware river--the abandoned Lackawanna on one side and the virtually merged "Erie Lackawanna" railroad on the other (and vice versa).

Jumping to Conrail and the "death" of the EL, a positive and bright outlook emerges. Even though the EL went bankrupt, conveyed most of its assets to New Jersey Transit and to Conrail, and liquidated its interests, the company still made its shareholders a ton of money after liquidation. If a shareholder would have held EL shares through the bankruptcy and the 10-year liquidation process they could have earned over 600% on their investment. Compare that with the 90% losses when shareholders sold their shares at the time of the bankruptcy and absorbtion into Conrail.

The honorable disposition of Erie Lackawanna assets and nearly $600 million value returned to stakeholders during liquidation is a bright spot in the dark days of late 20th century railroading in the Northeast. This book helps you understand that even chronically failing companies can still make things right in the end and die an honorable corporate death like the Erie Lackawanna.

Anyone interested in learning all about the political and economic factors that led to the death and final dissolution of a great eastern railroad (actually 2 that united to form the Erie Lackawanna) should carefully read this very well researched volumn.

Hi all. I have been reading this for months and it isn't getting any more interesting as it progresses. A big train buff, I usually enjoy this type of book. Unfortunately this one just seems like a very boring history book to me. Like my favorite train book, The Wreck of the Penn Central, this one moves through the personalities of those who shaped the industry and then overlays what is happening at specific points in time, giving the reader the essence of what is happening. It just doesn't read as enjoyably as the Penn Central book.

I really want to finish the book but I truly doubt I ever get through it....

This book is a must have for any fan of the Erie, the Delaware Lackawanna and Western or the Erie Lackawanna as it was caled after the two railroads merged. It starts out with a complete history of the Erie Railroad and goes all the way through it's merger with the DL&W and finally it's takeover by Connrail. It exposes how executives were often drunk on the job when they should have been running a railroad, and leaves you with the question, "What if the Erie Lackawanna had been able to hold out for another 4 years? Would they still be here today?"

Erie-Lackawanna, H. Roger Grant

The author is a Professor of History at the University of Akron, and wrote several books on American and railroad history. Why write a book about a defunct railroad? Learning from the past teaches you to avoid these mistakes. The Erie Railroad was never prosperous, its innovative operating procedures reflected its troubled economic situation (`Preface'). It was one of the four main railroads that connected New York city with Chicago. The Erie RR shows the critical developments of dieselization, corporate mergers, regulatory mismanagement, and changing patterns of travel and business. The Erie became part of the Consolidated Rail Corporation in 1976. In 1987 Grant received a call to write a history of this railroad from the records (p.viii). Grant talked to more than 50 people who provided information about "the way it was". Funding helped in gathering materials.

The Erie RR was once America's longest railroad, from the Hudson River north of NY city to Lake Erie, 447 miles (Chapter 1). This helped NY city to become a market center and surpass Baltimore, Philadelphia, and Boston. They originally used a wide gauge of six feet for greater carrying capacity. Trying to use pilings led to huge cost overruns. The Erie was first to use the telegraph to control train operations. After the first bankruptcy the Erie fell into the hands of "railrogues" (p.5). The Erie mostly carried coal (p.7). Their bonds could not be refinanced at lower rates (p.11). Buying powerful and highly efficient steam locomotives for faster freights meant more profitable shipping (p.15). The stock market crash in 1929 and a drop in revenues led to difficulties (p.16). Passenger operations suffered from bus and automobile competition on better roads (p.17). Worsening economics led to bankruptcy (Chapter 2). Other railroads as well (p.24). Big banks and insurance companies held Erie bonds which had excessive interest charges and lease rentals (p.25). The reorganization resulted in a dramatic drop in fixed expenses (p.29).

In 1942 the Erie paid a dividend on its common stock, the first in 76 years (p.33)! The former wide-gauge railway allowed over-size cargoes. Erie employees provided two Army railroad operating battalions (p.36). The Federal government took control of the railroads in WW I, but not WW II (p.38). After the war diesel-electric locomotives replaced steam locomotives and their structures (Chapter 3). Diesels had advantages beyond smoke abatement (p.41). Older steam engines were worn-out (p.45). Powerful diesels allowed longer freight trains (p.51). The Erie shipped a mix of commodities (pp.55-56). Passenger trains began to lose money (p.59). There was a Centennial Exhibition Train in 1951 (pp.62-66). Employees were loyal because of family connections and better morale (p.67). Decisions were made at the lowest level (p.68). Inflation in the 1950s caused strikes for higher pay (p.69). Competition from motor carriers continued (p.78).

Chapter 4 tells about the merger of the Erie and Lackawanna, they had parallel routes. The use of coal was declining (p.82). The Delaware & Hudson was also considered (p.84). The Railway Brotherhoods wanted to save jobs (p.98). The merger occurred October 17, 1960. The expected prosperity did not happen (Chapter 5). The St. Lawrence Seaway and shifts in production led to less shipping (p.107). There were organizational differences (pp.108-109), and corruption (p.110). The decline in steel production affected the freight business (p.121). The railroad was in "a state of decay" (p.130) in spite of a new Chairman of the Board (Chapter 6). William White ordered many improvements, but income continued to decline (p.138). Were railroads heavily taxed to subsidize airports and Port Authority property (p.143)? [Who benefitted from ending commuter trains?] Chapter 7 covers the events from 1968 to 1972 under the Dereco Holding Company. Passenger service was declining (p.164). [Since businesses moved out of cities to "office parks" the only transportation was the automobile.] Better maintenance kept more locomotives in service (p.171). Rising interest rates hurt railroads (p.172). The damage from the June 1972 hurricane caused bankruptcy (p.176).

The Erie-Lackawanna reorganized under bankruptcy protection (Chapter 8). There were recommendations for better service and lower costs (p.185). Watergate overshadowed the Great Railway Crisis (p.189). The Consolidated Rail Corporation would continue the major routes. Continuing inflation and a growing recession killed the Erie-Lackawanna (p.191). It ended under ConrRail on April 1, 1976. Chapter 9 tells what happened next. New shortline carriers had problems (p.212). The remains were sold off (p.217). Speculators benefitted most form the final pay-out (p.222). The book ends by asking what if they lasted until the partial deregulation of the railroad industry (pp.227-228)? Railroads provide more fuel-efficient transportation than big trucks on the highways. [No mention in this book of what Big Oil was doing.]

Unlike Europe, England and America had a "railroad mania" of unregulated construction that was also subsidized by the Federal Government. Fortunes were made (and lost) in creating many railroads. These subsidies created a railroad network system that was irrational and redundant. The railroads that were created slowly died because of this duplication of costly services. The changes in population locations also affected train services. The monopoly of trolleys declined after WW I due to the increasing use of automobiles which used public highways instead of a private highway taxed by local governments. A bus is superior to a trolley because of lower fixed costs and its ability to change routes of travel. It was not limited to areas with dense populations.