There are many people interested in former transportation companies, whether they were trucking companies, railroads, airlines or ocean lines. These companies are called “fallen flags,” and the term describes companies whose corporate names have been dissolved through merger, bankruptcy or liquidation.
Today’s FreightWaves Classics profiles another fallen flag – the Delaware, Lackawanna and Western Railroad (DL&W reporting mark; better known as the Lackawanna). It operated in the northeastern United States. It was one of a number of railroads that were started to haul anthracite coal from the mines to its buyers.
The Lackawanna was not a large railroad; it never reached 1,000 miles of track, but was well-managed throughout its corporate history. Unlike numerous other railroads, it avoided bankruptcy from its founding in the early 1850s until it merged with the Erie Railroad more than 100 years later.
Early history – Pennsylvania and New Jersey
Many of the older railroads that began in New England or the Northeast can trace their corporate history back to an entity that predated the railroad industry. In the case of the DL&W, its earliest “ancestor” was the Hoboken Ferry Company, which was founded in the 1770s. The Lackawanna’s two earliest railroad ancestors were Pennsylvania-based railroads: the Liggetts Gap Railroad (LGRR), which was incorporated in April 1832; and the Delaware & Cobbs Gap Railroad (D&CG), which was chartered in December 1850.
When it was founded, the LGRR was planned to connect Slocum’s Hollow (later renamed Scranton) to Great Bend, Pennsylvania, which was 56 miles away. On April 14, 1851, the LGRR changed its name to the Lackawanna & Western Railroad (L&W). On October 20, 1851, the Lackawanna began service between the towns. At about the same time, the D&CG built a rail line that ran east from Scranton to the Delaware River.
Slightly less than two years later (March 11, 1853), the L&W merged with the Delaware & Cobbs Gap. The new railroad’s name became the Delaware, Lackawanna & Western Railroad. The DL&W’s rail lines ran diagonally across Pennsylvania; it generated much of its revenue hauling iron ore and anthracite coal from mines in the Lackawanna Valley. The railroad hauled the iron ore to the Scranton foundry in Oxford, New Jersey; the coal was used across the region as the primary source of heating fuel.
The DL&W’s management sought a port connection into New Jersey. The DL&W sponsored the Warren Railroad, which was chartered in February 1851. It was planned to run from “Delaware, New Jersey to a connection with the Central Railroad of New Jersey (CNJ) at Hampton.” The Warren Railroad began service on May 28, 1856; it was leased by the DL&W in 1857. The lease gave the DL&W railroad access to the Hudson River waterfront because of the CNJ.
During this time period, the Morris & Essex Railroad (the M&E, which was incorporated in January 1835 and opened its first rail segment between Newark and Orange, New Jersey in November 1836) began to be a problem for the Lackawanna.
The M&E expanded; it reached Dover by 1848 and Phillipsburg by 1860. The DL&W considered the M&E a major competitor. Therefore, late in 1868 the DL&W leased the M&E, which connected with the Warren Railroad at Washington. Because of this lease, the DL&W could send trains over its own rails across New Jersey. It ended its agreement with the CNJ at that time.
The M&E began the Newark & Hoboken Railroad, which was finished in 1877. The new railroad provided direct service to the Hudson River waterfront.
West to Buffalo
Having completed its eastern network, the DL&W management sought to add an extension to Buffalo. Once it reached Buffalo, a key port along Lake Erie, the Lackawanna would no longer need to use the Erie Railroad to move its freight westward.
Its first extension beyond northeastern Pennsylvania happened while the Lackawanna was finishing its eastern segments. It acquired the Syracuse, Binghamton & New York Railroad (which ran between Binghamton and Syracuse) in 1869, as well as leasing the Oswego & Syracuse Railroad that same year.
Although it now had a direct link to the Great Lakes, the DL&W continued its expansion. In 1870 it acquired the Utica, Chenango & Susquehanna Valley Railway (UC&SV), which ran north of Binghamton to Richfield Springs and Utica (where a connection was established with the New York Central). From there, the Lackawanna acquired the Greene Railroad, which provided a link for the DL&W with the UC&SV between Chenango Forks and Greene.
A direct link to Buffalo was planned as the Lackawanna’s last major extension. It was made possible by Jay Gould’s influence. The tycoon had lost his control of the Erie Railroad; he saw the DL&W as another way to connect Chicago with New York via Buffalo. Gould gained control of the DL&W and he had an interchange in Buffalo with the Wabash Railroad, another railroad he controlled.
Gould then created a subsidiary railroad (the New York, Lackawanna & Western) in August 1880 to link Binghamton with Buffalo. Although Gould lost control of the DL&W; the 207-mile extension he proposed was finished on September 17, 1882.
The railroad’s final notable extension was a rail line to Northumberland via Scranton. It was originally the Lackawanna & Bloomsburg Railroad, which was incorporated in 1852 and the rail line was completed in 1856. The DL&W acquired the railroad in 1873.
Although its network was only about 950 miles long, the Lackawanna was a well-run railroad with a diverse traffic base. Throughout its history, its management followed a financial philosophy of frugality. That helped the railroad survive the financial panics of 1873 and 1893 as well as the Great Depression of 1929.
The company’s continued financial success during the early 20th century was due primarily to anthracite coal freight; it moved millions of tons of coal. The Lackawanna’s original route in eastern Pennsylvania and western New Jersey had a number of sharp curves and difficult grades. Flush with cash because of its coal traffic, the Lackawanna began rerouting projects to alleviate the curves and grades. The first was the New Jersey Cutoff, which was also known as the Lackawanna Cutoff.
The project began in 1908 and was finished in 1911 at a cost of more than $11 million (close to $1 billion today). The Lackawanna Cutoff eliminated a number of curves, grades and clearance impediments; it also cut the distance between Port Morris, New Jersey and Slateford, Pennsylvania by 11 miles. The cutoff’s major bridge was the 1,100-foot Paulins Kill Viaduct, which was constructed of reinforced concrete. The cutoff’s route was double-tracked and served as a top-notch corridor for more than 70 years.
A similar project was also done north of Scranton, Pennsylvania. It was known as the Summit-Hallstead Cutoff, or Nicholson Cutoff. Improvements similar to the Lackawanna Cutoff were made between Clarks Summit and Hallstead, Pennsylvania. The Lackawanna began construction on the cutoff in May 1912. This project also double-tracked the line; it opened for service in early November 1915.
It also had a key bridge – the 2,375-foot Tunkhannock Viaduct, which spanned Tunkhannock Creek. The bridge rose 240 feet above the floor of the valley; it is still one of the tallest concrete structures in the world.
After Conrail took over most of the freight routes in the Northeast, the Lackawanna Cutoff was abandoned in 1983. However, the Nicholson Cutoff is still used by Norfolk Southern.
Prior to the Great Depression, the Lackawanna was a well-respected and financially solid railroad. Many in the industry compared the DL&W to the Pennsylvania Railroad, which was considered the best-managed and financially solid railroad in the nation.
Like many other railroads during the Great Depression, the Lackawanna fell on hard times. While it did not go into receivership, its financial situation was precarious for several years. And like many other railroads, the increase in freight and passenger volume prior to and during World War II helped the railroad improve its financial footing.
The Lackawanna also electrified its eastern New Jersey commuter lines in the late 1930s.
William White was the railroad’s new president; he took over the reins of the Lackawanna in 1941. White oversaw the railroad during World War II. Under his direction the DL&W began the Pioneer, a new high-speed freight in 1946.
White also improved the railroad’s finances by acquiring formerly leased lines (which resulted in more than $1 million in annual savings). He also modernized the company’s rolling stock and other property, and acquired stock in the successful Nickel Plate Road to stem the losses that accrued when anthracite coal freight declined.
White was followed by Perry Shoemaker in 1952; he led the company through its final years. The company’s last president oversaw the railroad’s conversion from steam-powered locomotives to diesel locomotives.
The 1950s were a difficult period for the DL&W (and most other U.S. railroads). Its key commodity for decades – anthracite coal – declined significantly. The DL&W earned $10.3 million from anthracite coal in 1952; however, by 1957 that amount declined to about $5 million.
The railroad also lost general freight as improved highways made it easier for trucks to compete with the railroad. As a number of other railroads did, the Lackawanna began piggyback/intermodal service in 1954.
In addition, the DL&W was dealing with significant financial losses on its commuter services. This was a problem for all the railroads that provided commuter services in the New York City region.
The DL&W had problems with its debt load from a number of outstanding bonds. In an attempt to keep the railroad alive, its management sought a merger partner. The Lackawanna began merger talks with the Erie Railroad in 1954; two years later the railroads started joint operations in some areas in order to reduce losses.
On September 10, 1956 negotiations began regarding a merger between the Erie Railroad, the DL&W and the Delaware & Hudson Railroad.
One of the crown jewels of the Lackawanna was its Hoboken Terminal, which is still used as a commuter facility. The Erie Railroad began using the Hoboken Terminal on October 13, 1956; the Erie shut down its Jersey City terminal on December 12, 1958.
In 1957 the two railroads began sharing trackage using the Erie’s main line between Binghamton and Gibson, New York. On April 13, 1959 the Delaware & Hudson left the merger talks. The Erie and DL&W continued merger proceedings, and on September 13, 1960 the Interstate Commerce Commission approved the merger of the two railroads.
On October 17, 1960 the new Erie-Lackawanna Railroad (EL) began operations. The new railroad had a network of over 3,000 miles; its network served the Jersey City/Hoboken region and continued to Chicago via Buffalo.
The merger was “somewhat successful” at the beginning, but the EL had mounting financial issues as the 1960s progressed. While the railroad reached Chicago via a double-tracked route, the Erie had had nearly constant financial difficulties, a heavy debt load, and poor management at different times throughout its history.
The Lackawanna’s management was largely shunted aside during the 1960s. The EL’s financial problems were exacerbated by the 1968 merger of the Pennsylvania Railroad and the New York Central. Penn Central collapsed into bankruptcy in 1970.
Then a natural disaster caused even more problems. Hurricane Agnes hit the Northeast in June 1972; there was widespread flooding in many of the river valleys across New York and Pennsylvania. The bankruptcy of the Penn Central was followed by the bankruptcies of several smaller Northeastern railroads. Coupled with the destruction caused by Hurricane Agnes, the EL declared bankruptcy as well.
Unable to negotiate an agreement with its unions that would have allowed the EL to join the Chessie System, the company’s management decided to join the new Consolidated Rail Corporation (Conrail), which was piecing together a network of several bankrupt railroads in the Northeast.
Large sections of the Lackawanna’s track were abandoned by Conrail. Today, however, the Lackawanna’s tracks east of Binghamton are in use. However, the DL&W is just another fallen flag.
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 in North America – and those that are now “fallen flags” – should explore the American-Rails site.