After World War II, two of the largest railroads in the Eastern United States were fighting for survival. Both had been hit hard by massively increased traffic and deferred maintenance during the war years. How each dealt with it, however, was a different story…and led to some very bad feelings over the years. Those railroads were the Pennsylvania and the New York Central. Bitter rivals, until they couldn’t afford to be anymore. Bitter acquaintances which caused them to afford it even less.
It all started in the 1950’s. Both railroads were floundering. They were, by far, the largest companies east of the Mississippi. The Pennsylvania, at one point, hired more people than the Federal Government. When rail traffic was dying after the war, and the Federal Government controlled what rail companies could charge, these two companies had two choices when it came to spending what little money they had: employees and maintenance. (There were more places to put money, yes, but these were the major two!) The New York Central, brought up to be a businessman’s railroad, tried their best to split these down the middle. The Pennsylvania, always known as a railroadman’s company, often erred on the side of the employees. This led to a shortage of cashflow, for the PRR, for the maintenance that was really needed. And this led to some major problems.
So the two railroads went out to find partners to help with the little thing called survival. The New York Central owned a big chunk of the Chesapeake & Ohio. The Pennsylvania owned a large share of the Norfolk & Western. All they needed was for the government to approve mergers along those lines. Which didn’t happen. As they scrambled for a way to survive, both companies realized that the only way to survive was to combine forces. Combining forces happened…the survival not so much.
But before the merger, the PRR/NYC management started working on joint projects in case the Interstate Commerce Commission should, at hearings in August 1962, seriously consider letting these two giants get together. One such project was proposed for the New York Central’s Big Four Yards in Avon.
The State of Indiana was important to both railroads. Those two companies, by far, were the largest railroads in the state, with the Pennsylvania being the bigger of the two. If the two were to go ahead together, it would certainly affect a lot of the state.
The Indianapolis News of 17 July 1962 described that the “officials of the New York Central and Pennsylvania Railroads announced plans here today to build a $4,285,000 diesel engine maintenance terminal at the Big Four freight yard in Avon.” The Avon yards, at that point, weren’t even two years old, having been dedicated on 15 September 1960. The News continued “construction of the terminal hinged on approval by the Interstate Commerce Commission of the proposed merger which has been requested by the two systems. ICC hearings on the merger proposal are scheduled for late August.”
The new repair facility would require three years to build, and would provide for the maintenance of 570 locomotives.
More cost-saving plans were announced at the meeting announcing the planned maintenance terminal. In the Indianapolis area, most of the measures would lean toward New York Central facilities.
First, a major expansion to the Big Four Yards in Avon. Since it was new, and one of the world’s largest and most modern railroad yards, it was decided that Avon would become the gateway to the southwest for the combined system’s freight.
Second, consolidation of passenger equipment maintenance would be done with the New York Central’s Beech Grove shops being the beneficiary. Most major repair of freight equipment would be moved to Hollidaysburg, Pennsylvania, to the Pennsylvania Railroad shops there. All major passenger equipment maintenance would move to Beech Grove.
Third, the Pennsylvania’s two major yard facilities in Indianapolis, Hawthorne and the Transfer Yards, would see major sections abandoned in an effort to save money on maintenance and taxes. Which leads to the fourth item on the NYC/PRR management list, availability of the abandoned facilities for industrial development.
Fifth, use of NYC’s Hill and west side yards, as well as the unabandoned portions of Hawthorne and Transfer, for freight service to support local industries.
And last, but not least, total removal of the Indianapolis Union Railway as a separate corporate entity. The IU owned trackage in and out of Union Station, the station itself, and the Indianapolis Belt Railway. However, due to the way that the Indianapolis Union was built, the Pennsylvania Railroad owned 60 percent of the company, with the other 40 percent being owned by the New York Central.
The railroad management stressed that potential job losses in the Indianapolis area, under this plan, would be around 256. It was also stressed that this compares to the 11,000 employees that have been laid off annually by both railroads over the previous decade. Also, the 256 employees would have job protection under the ICC plan. Those 110,000 people laid off previously had no job protections at all.
Ultimately, the New York Central/Pennsylvania merger would occur on 1 February 1968. The resulting company, Pennsylvania New York Central Transportation Company, or Penn Central, would stagger around for approximately two years before becoming the largest bankruptcy in the United States to that time. Avon would become the largest yard facility in the area. Hawthorne and the Transfer Yard would be scaled back. Beech Grove would take over passenger maintenance…and would go with the passenger service when Amtrak was created. The Pennsylvania’s east-west mainline through Indianapolis would be abandoned in favor of the New York Central’s.
And, ultimately, the company created out of the ashes of the Penn Central debacle, Conrail, would be split up among the two major eastern US railroads: CSX and Norfolk Southern. And when that split happened, the equipment of Conrail was marked to denote which equipment would go which direction. The letters NYC were used to denote equipment going to CSX, a descendant of the Chesapeake & Ohio. The letters PRR were used to mark that which was going to the Norfolk Southern, the descendant of the old Norfolk & Western.
Indiana Transportation History 