The Wreck of the Penn Central / Edition 2

Before there was Enron...

...there was the Penn Central. A result of the merger between longstanding rivals the Pennsylvania Railroad and the New York Central Railroad, the new company was immediately beset by incompatible systems, repressive federal regulations, declining passenger railroad business, internal turf wars, and malfeasance by members of top management. To make matters worse, instead of undertaking badly needed capital improvements, Penn Central tried to offset their railroad losses by diversifying into other sectors of the economy. Following a harsh winter which crippled their Northeast Corridor operations, the Penn Central's problems exploded in mid-1971 when the company filed for bankruptcy. The collapse of the Penn Central rocked the railroad industry and led to massive government bailouts that created Conrail and Amtrak, and ultimately changed the face of American railroads forever. Written by two reporters from the Philadelphia Bulletin who covered Penn Central's brief rise and rapid fall, this book is a highly readable account of one of the 20th century's biggest business scandals.

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A reviewer

'Wreck of the Penn Central' was enthralling to put it best. One might think the book's general subject difficult to classify in those terms, but that's what it was in my opinion. I found the book hard to put down. It describes in vivid detail an almost 'perfect storm' of sinister managerial, economic and political forces seemingly conspiring in perfect harmony to doom the merger of two struggling railroads. Gross mismanagement bordering on fraud at the middle to upper-echelons of the corporation's executive staff, the inability of the railroad's management to overcome rivalry and instill a sense of unity in the combined company, an almost unconscious board of directors that was corrupted by an incestuous inter-mingling of Penn Central executives, the railroad's creditors and its shippers, a national economy entering recession, a public howling over poor passenger service, shippers who weren't being billed promptly and were many times irate over the horrid service they did receive, and a regulatory environment that virtually drove many railroads into red ink by crippling freight rate restrictions and labor-protection laws - all are described in expert detail. The reader will find the information very well presented - even the financial statistics are understandable to the non-accounting-literate. This is a masterful piece of railroad history.

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