There are many people interested in former transportation companies, whether they were trucking companies, railroads, airlines or ocean lines. They are called “fallen flags,” and the term describes those companies whose corporate names have been dissolved through merger, bankruptcy or liquidation.
At one time there were four major railroads offering service from New York to Chicago. The three largest and best-known were the Pennsylvania Railroad, the New York Central and the Baltimore & Ohio.
The fourth railroad offering service between the two largest cities in the United States was the Erie Railroad. Its rail network was much smaller than its competitors; however, it had a double-tracked main line.
The “canal era” of the 1820s
The Erie Railroad began during the earliest days of U.S. railroads, and during much of the 19th century it was a dominant carrier in the eastern part of the nation.
The company began, at least in part, due to the Erie Canal. The canal was the most famous and successful transportation waterway ever built in the United States. Construction on the canal began in 1817 and eventually ran 360 miles. It connected the state capital of Albany, which was built along the Hudson River, with Buffalo, which at one time was the fourth-largest city in the nation.
The Erie Canal opened on October 26, 1825. During the “canal era” canals were believed to be the future of efficient transportation. However, canals were problematic even then. They were expensive to build and moved freight and passengers slower than stagecoaches. Their biggest drawback though, is that most froze solid for a significant portion of the year (November through March/early April). Moreover, as canals were being built, railroads were being developed in the United Kingdom and would soon appear in the United States. The railroads would soon eclipse the canals…
As the Erie Canal was completed, business and government leaders of New York’s counties along the border with Pennsylvania believed their economies would wither if they did not have a better means of transportation as well.
Early history of the Erie Railroad
Because of the concern of these counties, New York Governor Enos Throop chartered the New York & Erie Rail Road (NY&E) on April 24, 1832. That railroad was to connect Piermont, along the Hudson River, with Dunkirk, which is located on Lake Erie.
In the early days of railroading (and for quite some time), their owners/promoters worried about another railroad “invading” their territory or somehow undercutting their railroad’s future prospects.
At that time, the concepts of interchange (the transfer of cars from one railroad to another at a common junction point) and partnerships with other railroad were very uncommon. In addition, the NY&E’s charter required that it be built to broad gauge (6 feet between its rails) as a further barrier to interchange and it was not allowed to lay tracks outside New York state.
Construction of the NY&E began in 1836; the line was completed from Piermont to Goshen (about 40 miles) on September 23, 1841. The railroad continued due west to Port Jervis and wound its way along the Delaware River before turning away at Deposit, New York, on its way to Binghamton.
As construction of the railroad pushed west, rough terrain forced those laying the track to run a grade through the northeastern tip of Pennsylvania.
The NY&E constructed a stellar feat of engineering at Lanesboro, Pennsylvania. The Starrucca Viaduct was designed as a beautiful stone-arch structure spanning Starrucca Creek. The bridge was 1,040 feet long and was double-tracked. It opened in 1848; it is a Historic Civil Engineering Landmark now, but still handles rail traffic (see Timken advertisement below).
The NY&E opened to Binghamton, 207 miles from Piermont, in 1847; its 447-mile main line was completed in the spring of 1851. Known as “the Erie,” the railroad was the only railroad at the time to boast a route of its length under common ownership.
In 1852 the Erie acquired two small railroads (the Paterson & Hudson River Rail Road and Paterson & Ramapo Railroad). The acquisitions allowed the NY&E to reach Jersey City, New Jersey via Suffern, New York.
In Jersey City, the railroad built Pavonia Terminal along the Hudson River to provide ferry service to downtown Manhattan. The terminal remained in service until late 1958; at that time the railroad began using the Delaware, Lackawanna & Western Railroad’s nearby and much larger Hoboken Terminal.
Opening its original route was NY&E’s zenith in many ways. The railroad’s growth stalled for years; it lagged behind as the Baltimore & Ohio, the Pennsylvania Railroad and what became the New York Central laid track and expanded toward the Midwest.
Moreover, the NY&E’s original endpoints were of little value; Piermont did not develop into a major market and Dunkirk did not have a deep water port. The railroad’s management realized it needed branch lines to the growing cities of Buffalo and Rochester. These were completed in 1853.
The second half of the 19th century
The first of the railroad’s eventual five bankruptcies occurred in 1859. The railroad emerged from bankruptcy as the Erie Railway on June 25, 1861. During the 1860s there was a lengthy fight to control the company. It was called the “Erie War” of 1867-68, and was begun by Cornelius Vanderbilt (who controlled the New York Central at the time). Vanderbilt fought Daniel Drew, Jay Gould, and Jim Fisk for control of the railroad.
Gould gained control of the Erie in 1868; over the next four years he invested funds to improve the railroad’s poorly maintained property as well as to continue the railroad’s westward expansion.
Gould’s tenure ended in 1872 when he was fired from his position as president. However, he acquired control of the Atlantic & Great Western Railroad (known as the A&GW, it later joined the Erie system).
The railroad’s second bankruptcy occurred in that period; it was in receivership during much of the 1870s. It emerged in 1878 as the New York, Lake Erie & Western Railroad (NYLE&W).
Hugh Jewett led the railroad for about a decade (1874-84). He oversaw the railroad’s conversion from broad gauge to standard gauge (4 feet, 8 1/2 inches), which as its name implies, was becoming the industry standard.
Also by the 1880s, many railroads had begun interchange with others, whether they were direct competitors or not.
The A&GW had leased track to the Erie, and had also been reorganized to the New York, Pennsylvania & Ohio Railroad. In 1883 the Erie took control of this railroad; the acquisition gave the Erie new markets across Ohio, including Akron, Cleveland and Cincinnati.
The NYLE&W’s last great expansion also occurred in 1883 when it acquired the Chicago & Atlantic Railway (C&A). The C&A owned a 250-mile route from Marion, Ohio to Hammond, Indiana and had track rights over the Chicago & Western Indiana’s rails that gave it access into Chicago and, later, Dearborn Station. Railroad historians note that the C&A was likely the best-engineered railroad in Indiana.
In 1884, the Erie’s new president, John King (who led the railroad through 1894), oversaw the final expansion when branches into the coal fields of northern and central Pennsylvania were completed.
At that point the NYLE&W’s network (including its branch lines) totaled 2,166 miles and its track stretched from Jersey City to Chicago. The financial Panic of 1893 caused the railroad’s third bankruptcy; it was reorganized as the Erie Railroad. Unfortunately, the railroad had acquired a great deal of debt at a time of high interest rates.
The 20th century
These financial issues hurt the railroad throughout the 20th century and resulted in its limited borrowing power and nicknames like the “Weary Erie” and the mock slogan “It ran Nowhere-In-Particular to Nowhere-At-All.”
However, in 1900 Frederick Underwood became the railroad’s president; he spent a great deal of capital on infrastructure improvements. The biggest expense was completely double-tracking its Chicago main line. He also purchased new locomotives for the railroad, launched timed freights to Chicago and avoided bankruptcy through innovative financing. Underwood was also responsible for the Erie installing automatic block signals (ABS). Put simply, ABS is a communications system that “consists of a series of signals that divide a railway line into a series of sections, or ‘blocks.’” Using ABS allows trains operating in the same direction to follow each other safely without the risk of rear-end collision.
New ownership and the Great Depression
In 1924 the Erie was acquired by Cleveland’s Van Sweringen brothers, who saw the Erie’s valuable Chicago route as a great addition in their growing empire (they also controlled the Chesapeake & Ohio, Denver & Rio Grande Western, and Pere Marquette among other railroads).
It is likely that the Van Sweringens would have eventually merged their eastern railroads into one system, which would have rivaled the other major eastern trunk lines. However, one brother died in December 1935; the other died in November 1936. The Northeastern rail map might have been very different if they had lived long enough to carry out their plans.
The Great Depression began in late 1929 and resulted in the massive economic downturn of the 1930s. It also began the long decline of the Erie. The railroad endured its fourth bankruptcy in 1938; the company emerged just two weeks after the bombing of Pearl Harbor with its same name.
World War II
Like many other American railroads, the Erie did well during World War II. The increase in freight and passengers because of the war generated profits, allowing the company to pay down much of its long-term debt.
The Erie also made improvements in its infrastructure, such as acquiring new diesel locomotives while retiring its fleet of maintenance-intensive steam locomotives. The Erie was one of the first railroads to convert its locomotive fleet to diesel models; it acquired its first in 1926 and throughout the 1940s and 1950s completed the upgrade.
The downturn of the 1950s
Despite having top-notch diesel engines, as the 1950s progressed there was a prolonged downturn in traffic. The railroad’s managers sought to offset traffic losses by encouraging industrial development along its property. In addition, the Erie joined other railroads seeking additional traffic by launching the new trailer-on-flatcar service (TOFC) in July 1954.
At that time, the Erie operated over 2,300 route miles; its New York to Chicago main line was just under 1,000 miles of that total. Also, while its passenger services were good, they took almost 24 hours to travel between New York and Chicago, while the New York Central and Pennsylvania Railroad passenger trains made the same trip in about 16 hours.
However, the Erie’s freight trains handled a variety of loads – from anthracite coal and general merchandise to perishables and expedited movements. It did not have as many miles of branch lines as other Northeastern and New England railroads; many of these railroads collapsed under the cost of maintaining branches that no longer generated the revenue of previous years.
As freight moved increasingly to the trucking industry, thousands of miles of track became unnecessary. Railroads like the Lehigh Valley, Reading, Boston & Maine, and New Haven all went bankrupt.
Understanding that the boom in wartime traffic had been temporary, Erie management began informal talks in 1954 with their counterparts at the Delaware, Lackawanna & Western (DL&W) regarding the possibility of merger.
The DL&W had been a well-managed railroad throughout its history; until the Great Depression it had generated significant profits. Each railroad sought to cut losses; they launched joint operations in various locations. For example, on October 13, 1956 the Erie began using Lackawanna’s Hoboken Terminal for commuter services, (and as noted earlier) ending all services from its Pavonia Terminal in Jersey City on December 12, 1958.
Additionally, the railroads began sharing track in 1957 between Binghamton and Gibson, New York, via Erie’s main line. More importantly, discussions about a merger between the Erie, DL&W and Delaware & Hudson (D&H) were begun in September 1956. In April 1959 the D&H ended its involvement, but the other two railroads continued discussions.
A merger in 1960
Over the next year the two railroads actively sought a merger. The Interstate Commerce Commission formally approved the merger in mid-September 1960. The new Erie-Lackawanna Railroad (EL) began operations on October 17, 1960 with a network of 3,031 miles.
Unfortunately, the EL was not very successful; it lost millions from the very beginning. The nation suffered a deep recession in 1958; that had a negative impact on the predecessor railroads’ debt. Bill White became the president of the EL in 1963; he skillfully kept the railroad from going bankrupt and improved earnings. However, he died unexpectedly in early 1967.
Several incidents occurred in quick succession that severely hurt the EL beginning in 1968. First was the merger of what had been two of the major railroads in the East – the Pennsylvania Railroad and the New York Central Railroad. The new Penn Central collapsed within two years, resulting in service disruptions and loss of traffic for the EL (and a number of other railroads).
Then, in June 1972 Hurricane Agnes dealt the EL a fatal blow when it destroyed much of the railroad’s property. The storm forced the railroad into its fifth, and final, receivership.
Next, on May 8, 1974 the Poughkeepsie Bridge, which spanned the Hudson River, burned and was severely damaged. The bridge was a key interchange for EL with multiple New England railroads. However, the Penn Central (which owned the bridge) refused to make repairs.
Lastly, the EL’s precarious financial situation worsened when the railroad was not able to negotiate a deal with its unions for the EL’s inclusion into the Chessie System. This led the EL to join the new Consolidated Rail Corporation (Conrail) instead.
However, Conrail did not need the EL’s main line to Chicago (earlier it had absorbed two other railroads with similar routes). It abandoned or sold the EL’s former corridor across Indiana and western Ohio after 1977.
Short line railroads sought to use some of the EL’s former track, but lack of traffic led to its complete abandonment during the early 1980s.
In 2021 it is hard to find much of the Erie’s superior double-track main line across the industrial Midwest; most of the track was removed and the land is now used for agricultural purposes.
Like many other fallen flags, it was a sad end to a proud railroad…
Author’s note: This article would not have been possible without the resources made available by Adam Burns of American-Rails.com. Those interested in learning more about the railroads operating now in North America – and those that are now “fallen flags” – should explore the American-Rails site.