Norwich Sun, December 1, 1949
Norwich Sun, December 1, 1949
Feature Writer Tells How O&W First Lost Its
Passenger Business, Then of Fight for Freight
___
Buses and Oil Burners Enter Into Situation As
Rail Line Drifted Into “Red” to Stay; Being Known As
Shortline, It Could Not Stand Gaff As Well as Longer
Railroad Combinations; Some Figures Are Given
By JOHN RANDOLPH
NEW YORK (AP) - The New York, Ontario and Western Railway, up for bankruptcy sale in federal court, is the victim of other people’s progress.
Back in the 1920s, New Yorkers were overjoyed when they started taking cars and buses to vacation spots like Sullivan county - instead of waiting for a train. But it just about wrecked the O. & W’s passenger business.
Householders were tickled to death in the 1930s when those nice automatic oil burners came along - and they could quit shoveling coal into a furnace all winter. But it practically ruined the O. & W’s coal business, which was its biggest money maker.
And all during this same period farmers and merchants were finding how convenient it was to have the new trucking lines bring small freight shipments right to the door. But it was deadly competition for the O. & W. which was fighting like grim death to get any share of what freight business was left.
All these developments were taught on the big railroads, too. Being big, however, they could pull a little here and let out a little there. But the O. & W. is a short-line railroad - operating only 544 miles of track between New York harbor and Oswego on Lake Ontario. There was only one place for it left to go, and that was bankruptcy court. It got there in 1937.
Ever since then the little railroad has been scrambling to build up new freight business to replace the old. It has done surprisingly well in the fact of cut-throat competition from the highways. But it’s like asking a professional weight-lifter to suddenly take on a juggling act - and it’s never taken the O. & W. out of the red.
“But even so, I still this railroad has a future,” the operating trustee, Raymond L, Gebhardt, says.
“It’s all tied up with general business conditions. If business pulls out of this slack period it’s been in, and picks up speed, I think the O. & W. can get along.” His fellow-trustee, Ferdinand J. Sieghardt, who has been hustling freight business, agrees with him.
Bit it may be a different-looking O. & W. that will “get along.” The road is up for sale in 13 separate portions, and parts might go to different bidders. They must agree to operate them for five years, but the parts might be realigned with other rail systems.
Of course if no suitable bids are received, Federal Judge Edward A. Conger will reject them and leave the railroad as is under the two trustees. Considering its present plight, the O. & W. got off to a flying start when it was incorporated in 1880.
The object of the road then was to connect Lake Ontario shipping to the New York area, and trap the freight business of the state’s interior. The railroad was planned from north to south, rather than the other way round.
The operation apparently was successful enough, but 10 years later the O. & W. hit a real bonanza - anthracite coal. This was clean hard coal that home-owners wanted more than anything else for fuel. It had none of the sooty, study dust of soft coal, and it burned with a hotter flame.
In 1890, the O&W took control of two big coal companies in the Scranton hard coal area of northern Pennsylvania - the Scranton Coal Co. and the Elk Hill Coal and Iron Co. It built a subsidiary rail line south from Cadosia to tap the collieries, and found itself steady, simple, cheap and very profitable freight business shuttling the anthracite from Pennsylvania to New Work and the New England states.
At the same time, Sullivan county and nearby areas opened up as resorts centers. The O&W was right on hand with another branch line to handle the business. Trains full of vacationists oiled merrily to Monticello and Port Jervis, and the cash rolled into the O&W.
This lasted for nearly 40 years. Look at the figures: 1926 was the best passenger year with ticket revenue of $2,629,000. Then came the family automobile. Last year the O&W took in only $164,o000 from passengers.
But the body blow was the collapse of the anthracite business. In 1932, in the very depths of the depression, the O&W had its biggest and most profitable coal-hauling year, with coal revenue a whopping $5,845,000. It started to drop a bit, bu in 1936 it was still a very cozy $5,138,000.
Then the blow fell. Turmoil in the coal fields and the onset of the oil burner turned the public away from anthracite. The O&W’s coal revenue crashed from more than $5 million a year to $2,946,000. It was too much for the little road. It suspended its bond payments and went into bankruptcy. Coal revenue continued to drop. Last year it was only $1,400,000.
Even the O&W has abandoned coal for its locomotives - it was the first line in this country to go 200 percent diesel in order to save money.
During the last 12 years the trustees have tried every trick of the trade to build up business in carload freight and milk hauling. The general merchandise revenue of $2,393,000 in 193 was pushed up to $5,808,000 last year. But good as it is, it’s not enough to closed the gap left by the coal collapse.
Merchants and public officials in all the towns served by the O&W agree with its trustees that the road has its. Some of them even talk of “ghost towns” if the line suspends. It would cut several of them off from any rail service whatever, lost their merchants carload-lot discounts, and give the trucks a monopoly.
Middletown would lose its O&W shops and 400 jobs. Oswego would lose its best waterfront connection.
More money put into the road would improve its service and possibly bring more business or at least make for more efficient, operation. Up to now the O&W has had nothing but deficits.
But a new owner or owners might be able to supply the black. The bids, if they are acceptable to the court, may well end the old railroad as the O&W. But they may also open up a new future for it in another form.
