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Summary Article: Pennsylvania Railroad
From Gale Encyclopedia of U.S. Economic History

The Pennsylvania Railroad (PRR), originally constructed in the mid-nineteenth century to connect Philadelphia to Pittsburgh, grew into the largest U.S. railroad by the early twentieth century. In 1910, when the railroad had achieved its maximum sprawl, its lines covered 13 states in the Midwest and Mid-Atlantic regions, extending east to Long Island, west to St. Louis, south to Virginia, and north to the upper reaches of Michigan where Lakes Michigan and Huron meet. Founded in 1846, the “Pennsy,” as the corporation was commonly known, paid dividends to its stockholders for the first 100 years of its existence, the longest such streak in U.S. corporate history. After encountering financial difficulty in 1946, the first year it failed to make a profit, the PRR continued to decline for more than two decades until it merged with the New York Central Railroad, its archrival, in 1968, forming the giant Penn Central Corporation, which went bankrupt just two years later in 1970. At its maximum capacity, in the first quarter of the twentieth century, the PRR operated over 10,000 miles of track and employed approximately 250,000 people.

The building of the Erie Canal in 1825 and the emergence of the Baltimore and Ohio (B&O) Railroad—which made its first run in January 1930—threatened Philadelphia's traditional position as a center of commerce. These modern, accessible transportation networks made New York and Baltimore major trade centers. Pennsylvania entrepreneurs and politicians wanted to maintain Philadelphia, a major metropolitan center on the eastern border of the state, as an important market hub that was connected to the western reaches of the state and other big cities in the east. To this end the state legislature funded a series of canals and short railways across the southern portion of the state to link Philadelphia to Pittsburgh, located on the western border of Pennsylvania. By the mid-1830s progress had been made, but the resulting network, known as the Pennsylvania Main Line, was impractical and inefficient. The system consisted of a rail line from Philadelphia to Colombia, another rail over the Allegheny Mountains called the Allegheny Portage Railroad, and a system of canals running from the center of the state to Pittsburgh.

In 1846 the Pennsylvania state legislature granted a charter for the PRR in response to an announcement that the B&O, the country's leading freight carrier at the time, had made inquiries about building a line to Pittsburgh. Construction on the railroad began at Harrisburg, the state capital, which was located almost halfway between Philadelphia and Pittsburgh. The line at Harrisburg would connect to the Main Line (the railroad from Philadelphia to Columbia) and then advance westward to Pittsburgh. The 245-mile segment between Harrisburg and Pittsburgh was open for service in 1854. Three years later the PRR purchased the Main Line railroad from Colombia to Philadelphia. For much of the 1850s railroad developers were occupied with upgrading the railroad's physical plant, buying new equipment, and experimenting with coal-burning fireboxes.

By the beginning of the Civil War (1861–65), the PRR had expanded by purchasing lines west of Pittsburgh into Ohio, Indiana, and Illinois. Despite the inflated economy and the railroad's deteriorating equipment, the PRR doubled its net profits during the war. By the war's end the PRR was the largest corporation in the world. Expansion continued well into the 1870s, with rail lines emanating from Harrisburg to Erie, Pennsylvania; Buffalo, New York; New York Harbor; Baltimore; Washington, D.C.; and Jersey City, New Jersey. Additional lines were leased to provide connections to numerous Midwest cities and extend PRR rails to the Mississippi River.

In the mid-1880s the PRR became mired in a costly dispute with the New York Central Railroad, its main competitor. The dispute began when the PRR financed the West Shore Railroad's line from Buffalo to Albany, New York, a leading commuter route for New York Central. When West Shore initiated a price war, New York Central owner Cornelius Vanderbilt (1794–1877) responded by starting construction on a line from Harrisburg to Pittsburgh. With the region's two biggest railroads encroaching on each other's territory, there was a possibility that the resulting competition would keep fares low. Both sides agreed to a compromise wherein New York Central took control of West Shore and PRR obtained the rights to finish the new line in southern Pennsylvania. But legal battles over Vanderbilt's Pennsylvania line persisted for over 20 years, at which point the project was abandoned.

Between 1899 and 1906 the passenger traffic on the PRR main line between Harrisburg and Pittsburgh was the highest in the nation. To accommodate service demands the railroad expanded by constructing four additional tracks and several new tunnels. In 1905 the PRR's premier passenger train, the Broadway, began running between New York and Chicago in 18-hour trips. In 1907 tunnels under the Hudson River allowed passenger trains access to the newly constructed Pennsylvania Station in Manhattan. By 1910 the PRR owned more than 260,000 passenger and freight cars and had become a U.S. conglomerate—a corporate giant that referred to itself as the Standard Railroad of the World.

Throughout this period the PRR carefully researched and implemented technological innovations. In the late nineteenth century it pioneered the use of the air brake, steel rails, and automatic block signals, and by 1908 it was poised to introduce an all-steel passenger car. Soon after the PRR began to use electric power, first in New York and later in Philadelphia. The use of electric power reached full maturity in 1935 and marked the largest modernization process attempted by a U.S. railroad. In addition the PRR secured interests in Trans World Airlines, Greyhound Bus Lines, and numerous trucking companies in order to provide consumers with multi-modal transportation options.

At its height in the early twentieth century, the Pennsylvania Railroad consisted of more than 10,000 miles of track throughout 13 states in the Midwest and Mid-Atlantic regions. XNR PRODUCTIONS. COPYRIGHT © CENGAGE LEARNING.

The PRR did well enough in the first part of the century to survive the Great Depression (1929–39), but it began running into difficulties soon after. World War II (1939–45) and the increasing cost of modernization placed a severe financial burden on the entire railroad industry. In 1946 the combination of large capital expenditures and postwar inflation produced the company's first annual net loss. The need to replace an obsolete fleet of steam locomotives quickly became the company's most pressing issue. In spite of its deep ties to the coal industry, the railroad replaced steam power with diesel-electric, which offered many of the benefits of electric traction without the high initial cost. The completion of the transfer from steam to diesel, a $400 million investment, took place in 1957.

During the 1950s and 1960s the PRR continued to experience a drop in revenue and service. The company felt the impact of the decline of heavy industry in the Northeast and stiff competition from other emerging means of transportation as commuters and corporations needing to transport freight used the country's burgeoning highway system. In the late 1940s the railroad's average annual ton-miles totaled 54 billion, but by 1960 the total annual ton-miles had fallen to 43 billion. After many years of negotiation to prevent further losses, the PRR merged with longtime rival New York Central in 1968 and eliminated duplicate routes and facilities. Unfortunately the new company, Pennsylvania Central, could not withstand the declining rail traffic or cope with soaring labor costs and declared bankruptcy only two years later. In 1976 Conrail and Amtrak, two leading railroads, purchased most of Penn Central's rail holdings, allowing Penn Central to return to financial solvency as a real estate development firm.

SEE ALSO Baltimore and Ohio Railroad; Erie Canal, Building of; New York Central Railroad; Railroads and American Economic Growth: Essays in Econometric History

  • Adams, Richard D. Locomotives of the Pennsylvania Railroad: The Early Years, 1848 to 1874. Pennsylvania Railroad Technical and Hist. Soc. Bryn Mawr, 2010. Print.
  • Alexander, Edwin P. On the Main Line: The Pennsylvania Railroad in the 19th Century. Potter New York, 1971. Print.
  • Bezilla, Michael. Electric Traction on the Pennsylvania Railroad, 1895-1968. Pennsylvania State UP University Park, 1980. Print.
  • Chandler, Alfred D. Jr.The Railroads: Pioneers in Modern Corporate Management.” Business History Review 39.1 (1965): 16-40. Print.
  • Churella, Albert J. The Pennsylvania Railroad. Volume I, Building an Empire, 1846-1917. U of Pennsylvania P Philadelphia, 2013. Print.
  • Harwood, Herbert H. Jr. The Railroad That Never Was: Vanderbilt, Morgan, and the South Pennsylvania Railroad. Indiana UP Bloomington, 2010. Print.
  • Salsbury, Stephen. No Way to Run a Railroad. Pennsylvania Railroad Philadelphia, 1949. Print.
  • Ward, James A. Railroads and the Character of America, 1820-1887. U of Tennessee P Knoxville, 1986. Print.
  • COPYRIGHT 2015 Gale, Cengage Learning

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