The building of the Erie Canal in 1825 and the emergence of the Baltimore and Ohio Railroad threatened Philadelphia's traditional position as a center of commerce. These modern, accessible transportation networks made New York and Baltimore major trade centers. In an effort to maintain Philadelphia as an important market hub, Pennsylvania merchants secured a legislative charter for the Pennsylvania Railroad (PRR) in 1846.
Construction on the railroad began at Harrisburg, where it would connect to the state-owned Philadelphia and Columbia Railroad, and then advance westward to Pittsburgh. The 245-mile segment between Harrisburg and Pittsburgh was open for service in 1854. Three years later, the PRR purchased the state-owned railroad east to Philadelphia. For much of the 1850s the railroad developers were occupied with upgrading the railroad's physical plant, buying new equipment, and experimenting with coal-burning fireboxes. By the beginning of the American Civil War (1861–1865), the PRR controlled a crucial segment of the nation's rail system. Despite the inflated economy and the railroad's deteriorating equipment, the PRR doubled its net profits during the war. By war's end, the Pennsylvania Railroad was the largest corporation in the world. Free of debt, it was poised for further expansion.
Expansion continued well into the 1870s, providing rail service throughout the state and beyond. Main rail lines emanated from Harrisburg to Erie, Buffalo, Baltimore, Washington, D.C., Jersey City, and New York harbor. Additional lines were leased to provide connections to Midwest cities and extend PRR rails to the Mississippi River. By the end of the nineteenth century the railroad had ceased to expand, and it began to concentrate on consolidating the leased lines and making improvements in service.
Between 1899 and 1906 the passenger traffic on the main line between Harrisburg and Pittsburgh was the highest in the nation. To accommodate service demands, the railroad expanded by constructing four additional tracks and several new tunnels. In 1905 the PRR's premier passenger train, the Broadway, began running between New York and Chicago in eighteen-hour trips. In 1907 newly constructed tunnels under the Hudson River allowed passenger trains access to the newly constructed Pennsylvania Station in Manhattan, New York. By 1910 the Pennsylvania Railroad operated 10,000 route-miles in 13 states, owned more than 260,000 passenger and freight cars, and employed more than 215,000 people. The PRR had become a U.S. conglomerate—a corporate giant that referred to itself as "The Standard Railroad of the World."
Throughout this period the Pennsylvania Railroad carefully researched and implemented technological innovations. In the late nineteenth century the PRR pioneered the use of the air brake, steel rails, and automatic block signals. By 1908 the railroad was poised to introduce an all-steel passenger car. The PRR also began to use electric power, first in New York and then later in Philadelphia. The use of electric power reached full maturity in 1935 and completed the largest modernization process attempted by a U.S. railroad. In addition the PRR secured interests in Trans World Airlines, Greyhound Bus Lines, and numerous trucking companies in order to provide consumers with multi-modal transportation options.
The Pennsylvania Railroad did well enough in the first part of the century to survive financially through the Great Depression (1929–1939), but it began running into difficulties soon after. World War II (1939–1945) and the increasing cost of modernization placed a severe financial burden on the entire railroad industry. In 1946 the combination of large capital expenditures and postwar inflation produced the company's first annual net loss.
The need to replace its obsolete fleet of steam locomotives quickly became the company's most pressing issue. In spite of its deep ties and loyalty to the coal industry, the railroad replaced steam with diesel-electric power. This change offered many of the benefits of electric traction without the high initial cost. The completion of the transfer from steam to diesel, a $400 million investment, took place in 1957.
During the 1950s and 1960s the Pennsylvania Railroad continued to experience a drop in revenue and service. The company felt the impact of heavy industry's decline in the Northeast, as well as stiff competition from other emerging means of transportation. In the late 1940s the railroad's average annual ton-miles totaled 54 billion, but by 1960 the total annual ton-miles had fallen to 43 billion.
In 1968 after many years of negotiation to prevent further loss, it merged with the New York Central (NYC) and eliminated duplicate routes and facilities. Unfortunately the new company, Pennsylvania Central, proved to be unable to withstand the declining rail traffic or cope with the soaring labor costs and declared bankruptcy only two years later. In 1976 Conrail and Amtrak purchased most of Penn Central's rail holdings. This allowed Penn Central to return to financial solvency as a real estate development firm.
See also: Railroad Industry
Alexander, Edwin P. On the Main Line; the Pennsylvania Railroad in the Nineteenth Centruy. New York: C.N. Potter, 1971.
Bezilla, Michael. Electric Traction on the Pennsylvania Railroad, 1895–1968. University Park, PA: Pennsylvania State University Press, 1980.
Salsbury, Stephen. No Way to Run a Railroad. Philadelphia: Pennsylvania Railroad, 1949.
Ward, James A. Railroads and the Character of America, 1820–1887. Knoxville, TN: University of Tennessee Press, 1986.
by 1910 the pennsylvania railroad operated 10,000 route-miles in 13 states, owned more than 260,000 passenger and freight cars, and employed more than 215,000 people. the prr had become a u.s. conglomerate—a corporate giant that referred to itself as "the standard railroad of the world."