Railroad Reorganization

Report Outline
Watersged Year for Nation's Railroads
Development of U.S. Railway Policy
Concern for Viability of U.S. Railroads
Special Focus

Watersged Year for Nation's Railroads

Government Agency's Proposal for New System

This is the year for the United States to come to terms with its railroad problems. After years of indecision about a proper fate for ailing and failing railroads in the Northeast and Midwest regions, a preliminary official blueprint now exists. After additional hearings, evaluations and possible amendments, Congress will have to either reject the plan by autumn or else acquiesce in its acceptance.

The preliminary plan as drawn up by the federal government would replace the outworn rail transportation system which now serves 17 eastern and midwestern states and half of the country's population. Seven bankrupt railroads, the mammoth Penn Central among them, are included in the Preliminary System Plan for restructuring the rail system in that region. The plan was released on Feb. 26 by the United States Railway Association (Usra), an agency created by the Regional Rail Reorganization Act of 1973 to reorganize the bankrupt lines into “an economically viable system capable of providing adequate and efficient rail service”

Usrs's board of directors said in the Preliminary System Plan that the region should be served by three major rail systems. The act established the Consolidated Rail Corporation, or ConRail, as a federally aided for-profit corporation to acquire and operate those parts of the bankrupt lines to be included in the new system. In addition, the plan would provide for the expansion of the solvent Chessie System (a combination of the old Chesapeake & Ohio, Baltimore & Ohio and other property) and the Norfolk & Western Railway. ConRail, the board said, “is not intended to be a composite of bankrupt carriers, but a revitalized, restructured railroad serving the same territory now served by the bankrupt carriers.”