Decline of Passenger Transportation
In the twentieth century, the PRR experienced a devastating decline in passenger usage brought about by mismanagement, lost opportunities, inability to adapt to economic situations, and competition.
Like other industries, the 1920s were pinnacle years for business growth. However, during the Great Depression, volume decreased significantly. Federal subsidies of approximately $77 million dollars kept the railroads solvent and allowed them to switch from steam engines to diesel and electric. By 1938, passenger travel had increased by thirty-eight percent, but it was still only half its 1920 peak level. During World War II, the government did not nationalize the rail system as it had done in World War I. The PRR experienced record-setting volume and revenue increases with the transportation of troops. Yet, the company failed to capitalize properly on the post-war travel boom, focusing instead on its freight lines. Fares increased and service decreased. Less was spent on advertising than was being spent by automobile companies, busses and planes while government funds were being spent on interstate highways and airports.
The decline in passenger rail was symbolized through the demolition of New York’s Pennsylvania Station in 1963. In place of the glorious monument to rail, service was removed to a below-ground complex.
Mergers and reorganizations failed to save private railroad companies and eventually the government assumed ownership to ensure that passenger rail would remain available in the United States.
Decline in the Cumberland Valley
The same declines that impacted the rest of the country also affected the Cumberland Valley and the town of Shippensburg. At the height of passenger service in Shippensburg, sixteen passenger trains passed through the town; but by 1947, twelve of these trains had been eliminated. In 1952, two additional trains were removed from the line. Travel on the remaining two trains was difficult because they only offered service at night. In 1962, passenger service was ended.
With the demise of passenger service, many residents of the town favored the removal of the tracks on Earl Street because they cut through the downtown area, causing noise, air pollution, and accidents. Shippensburg’s Chamber of Commerce requested that the tracks be removed in 1967 and again in 1972. However, freight trains continued to pass through the town. Consequently, before tracks could be removed, another method of freight transportation needed to be found in order to maintain the crucial industry. The Chamber was at a crossroads, wanting to keep the town quiet, clean, and safe by removing the tracks, but also needing to sustain the local industry derived from the shipments received by train.
The Rise and Fall of Penn Central
In 1968, the Pennsylvania Railroad merged with its long-time rival the New York Central Railroad to form the Penn Central Transportation Company. At that time, it was the largest transportation enterprise in the United States with assets of nearly $7 billion, 20,000 route miles, more than 100,000 employees, and $1.5 billion in freight revenues annually. Around 8,000 passenger trips a day were made on Penn Central’s Northeast Corridor line between Washington, D.C. and New York City.
Although both companies entered the merger in a profitable state, within two years, operations were yielding devastating deficits as a result of poor management, dishonest accounting, and the diversion of funds into unprofitable outside enterprises. The company was forced to file for bankruptcy.
Creation of Conrail
The federal government first attempted to save the nation’s vast railroad networks by creating a government funded, privately-owned railroad company called Conrail or Consolidated Rail Corporation. Conrail began operating in April of 1976. It was tasked with revitalizing rail facilities and service. It assumed the operations of not only Penn Central but also the Erie Lackawanna Railway.
Despite receiving billions of dollars of assistance from Congress, Conrail proved to be highly unprofitable during its first seven years. But, in the 1980s it freight operations became lucrative. Consequently, Conrail’s freight holdings in the East were split between CSX Transportation and the Norfolk Southern Railway.
Passenger service was then transferred to Amtrak. This quasi-public corporation was founded in 1971. It receives a combination of state and federal subsidies but is managed as a for-profit organization. Usage remains significantly lower than automobiles and airplanes and no local stops have either been added or planned; but, passengers from the Cumberland Valley who want to travel without worrying about gas, parking, traffic jams, and security checkpoints, can journey to Harrisburg and enjoy train travel.