The story
Pre-company beginnings
The earliest origins of the New York, Susquehanna and Western Railway trace back to 1828, when John Langdon Sullivan surveyed the first route across northern New Jersey with the intent of transporting Pennsylvania coal by rail to industrial Paterson, New Jersey. While New Jersey industry had supply of iron ore, it needed local sources of coal to smelt it following shortages of British coal after the War of 1812. The Morris Canal had begun operation for this purpose by 1831, but was seasonal and slow; industry demanded better. Nothing was done with Sullivan's plans until the New Jersey, Hudson and Delaware Railroad (NJH&D) was chartered by a group of Paterson, New Jersey businessmen in 1832. Due to financial difficulties incurred during the Panic of 1837, the company did not construct anything until 1867, but its charter remained active. Further set back by the Panic of 1857, the railroad sold its charter to the Pennsylvania Coal Company. Following the events of the Civil War though, canals became disused, and a major railroad boom began throughout the United States.
By the mid-1860s, several companies were formed to create railroads across northern New Jersey. The earliest of these, the Hoboken, Ridgefield and Paterson Railroad (HR&P), was chartered in March of 1866 to connect Paterson with the ports along the Hudson River waterfront; various logistical issues ensured this company would not actually build anything. The most successful attempt was by the New Jersey Western Railroad (NJW), which was founded by Cornelius Wortendyke in 1867. That railroad began laying track at Hawthorne the following year. They soon completed a line between Hawthorne and Butler.
In 1866, the New York and Oswego Midland Railroad (NY&OM) was incorporated in New York State under the leadership of DeWitt Clinton Littlejohn. His plan was to provide a connection from New York City to the port city of Oswego, New York on Lake Ontario. Construction on their trackage began at Oswego two years later. However, Wortendyke had no charter to build in New Jersey, a necessity in reaching New York City.
The NJW quickly decided to shift its focus towards connecting their route with the NY&OM to benefit both railroads. Cornelius Wortendyke signed an agreement with DeWitt Littlejohn, where the two companies would lease and access each other's routes. By 1870, the NJW expanded westward from Hackensack to Hanford, but in doing so, they encountered the NJH&D[c] and the Sussex Valley Railroad, which had already obtained resources and begun work. The Sussex Valley had been chartered in 1867 to build south from the New Jersey-New York state line to the Delaware Water Gap.
By 1870, all four railroads decided it would be convenient to consolidate the work that had already been completed, so they merged together to create the New Jersey Midland Railway (NJM or Midland). Concurrently, the NY&OM expanded to Middletown, New York, and they leased the Middletown, Unionville and Water Gap Railroad (MU&WG), since it had provided a connection between the NY&OM at Middletown and the NJM at Hanford. The first Midland train to Butler ran on April 27, 1871, with the first train between Jersey City and Middletown running May 1, 1872, having completed construction on their final stretch of trackage from Hackensack to Jersey City, using trackage rights over the Pennsylvania Railroad's New Jersey Rail Road and Transportation Company.
In 1872, the NJM formally became leased by the NY&OM. On July 9, 1873, the first train over the NY&OM and NJM was operated from Oswego to Jersey City. With the inaugural run, the two railroads created the third trunk railroad line to connect New York City and the Great Lakes region, but the ongoing Panic of 1873 quickly affected the finances of both companies, with the NY&OM falling under receivership.
The NY&OM suspended all lease payments, and their partnership with the NJM was quickly put to an end. The NY&OM was later reorganized as the New York, Ontario and Western Railway (NYO&W) in 1879, and they began forming a separate partnership with the West Shore Railroad (later the New York Central Railroad (NYC) to access New York City. The NJM took over the lease of the MU&WG, but in 1875, the NJM was also put into receivership from the after affects of the Panic, and James McCulloh and Garret Hobart served as the NJM's receivers.
Formation and expansion
In 1880, investors from the original NJM regrouped and reorganized the company as the Midland Railroad of New Jersey, with Hobart serving as their president. The company regained their finances by serving New Jersey industrial firms. The investors decided to profit from hauling anthracite out of Pennsylvania as originally envisioned, and they chartered the New York and Scranton Construction Company to that end. That company in turn chartered four other small companies to lay down portions of the NJM route from New Jersey to Pennsylvania.
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On June 17, 1881, the Midland Railroad of New Jersey was consolidated with five other companies to form the New York, Susquehanna and Western Railroad (NYS&W); "Susquehanna" was incorporated in the name, since one of the company's goals was to reach the Susquehanna River.
In 1882, the new NYS&W railroad extended westward to Gravel Place, Pennsylvania, but they were originally reluctant to extend through the Pocono Mountains. They began to outsource their coal traffic to the Delaware, Lackawanna and Western Railroad (DL&W, interchanging with them at Stroudsburg. To reach the Hudson River waterfront ports, the NYS&W would transfer their coal traffic to the Pennsylvania Railroad at Marion Junction via the Hudson Connecting Railway.
The NYS&W also began operating passenger trains. By the late 1880s, the NYS&W's profitability boomed from their coal-hauling business and from their industrial and farm customers. In 1887, the railroad laid down a double-track route from Paterson to Jersey City to accommodate their rising traffic.
In 1892, the Susquehanna ended their transfer partnerships with the DL&W and the PRR, when they extended their own line eastward from their Little Ferry Yard to a new coal terminal at Edgewater. The railroad also began leasing their own newly chartered Wilkes-Barre and Eastern Railroad (WB&E) between Stroudsburg and Wilkes-Barre in late 1893. This railroad was chartered for the NYS&W to have direct coal mine access. In 1896, the NYS&W chartered the Susquehanna Connecting Railroad to further access the Wyoming Valley as a branch line from the WB&E north to Minooka
The Lehigh and New England Railroad (L&NE) was formed in 1895 as a bridge line between eastern Pennsylvania and New England. Its route through the Great Appalachian Valley in New Jersey was finally negotiated with trackage rights over the Susquehanna between Hainesburg Junction, near the Paulinskill Viaduct, and Swartswood Junction, near Newton. This provided a source of revenue for the railroad until the L&NE folded in 1961.
Erie Railroad control
The NYS&W's prosperity caught the attention of influential financer J. P. Morgan, who used his Erie Railroad as a means to control the Susquehanna. The Erie already had access to coal mines north of Scranton, but they also desired access to the mines south of the area, and they believed the Susquehanna provided the best route there via its Wilkes Barre and Eastern.
On behalf of the Erie, Morgan quietly purchased the NYS&W's stock until he obtained the majority of their shares. By July 1898, the Erie Railroad took over control of all of the Susquehanna's operations, making the NYS&W their subsidiary.
In 1908, the Susquehanna purchased their final new steam locomotive, 2-8-0 No. 140, from the Baldwin Locomotive Works; all of their subsequent steam locomotives were either leased or purchased second-hand from the Erie.
In 1911, the Susquehanna's Jersey City passenger terminus was moved from the PRR's Exchange Place Station to the Erie's Pavonia Terminal, and their freight terminus was moved from the PRR's Marion yards to the Erie's Croxton yards. By 1923, the Susquehanna's total gross income peaked at $5.5 million.
The Erie subsequently invested in rebuilding and upgrading the NYS&W's trackage and bridges. During the 1920s, the Erie began operating under the control of the Van Sweringen brothers, and they installed a new president for the Erie, John J. Bernet. During Bernet's tenure for the Erie, he initiated a major modernization program for the Susquehanna; most of the railroad's original steam locomotives and wooden passenger cars were scrapped and replaced with newer Erie equipment.
Throughout the 1930s, the NYS&W experienced some major financial problems from the Great Depression, and the Erie began to neglect them. The general demand for anthracite coal was declining, and while other anthracite-hauling railroads were able to change their freight priorities, the NYS&W struggled to follow suit.
During 1937, the railroad defaulted on some major bonds and taxes they owed, and on June 1, they filed for bankruptcy and reorganization. That same month, the bankruptcy court appointed two co-trustees to the NYS&W; Walter Kidde and Hudson Bordwell, but the latter died only five months into his position, making the former their sole trustee.
Walter Kidde, who had no prior experience in operating railroads, began to explore ways of reorganizing the NYS&W and its assets. The first task he did was to terminate the company's lease of the Wilkes-Barre and Eastern, effectively ending their anthracite coal operations, and the WB&E was quickly shut down and ripped up, after they filed for their own bankruptcy.
He also entrusted ownership of the Susquehanna Connecting Railroad to the Erie. In 1938, Kidde discontinued a portion of the NYS&W's commuter passenger services. By March 1940, Kidde arranged other cutbacks for the Susquehanna, which resulted in the company being spun-off from the Erie's control.
Walter Kidde-Henry Norton reorganization
Following the abandonment of the WB&E, the NYS&W did not see any benefit in continuing their Pennsylvania operations, and in 1941 they cut back the western end of the line back twelve miles from Stroudsburg to Hainesburg, New Jersey, preserving the L&NE connection there (and its revenue). Walter Kidde decided to have the Susquehanna improve their remaining suburban commuter passenger trains and make profits from providing bus services to Manhattan, and Susquehanna Transfer service began in late 1939, for this purpose.
Kidde also opted to dieselize the NYS&W's locomotive roster to reduce their operating costs. In June 1940, they began to purchase some streamlined self-propelled rail cars from the American Car and Foundry Company (ACF) to cover their commuter services. In 1941, the NYS&W began to order some S-2 switchers and RS-1 road switchers from the American Locomotive Company (ALCO) to supersede their steam locomotives. A precedent was quickly set on the NYS&W, where all of their diesels with multiple-unit controls would only receive even road numbers, while all of their non-multiple-unit diesels would only receive odd road numbers.
The Susquehanna also settled a $7 million freight balance debt they owed the Erie by paying them $250,000 and purchasing their freight terminal in Edgewater. The railroad also obtained money from World War II, by providing an effective coastal coal barge route out of Edgewater, to aid a major coal shortage in Great Britain, since a similar route out of Norfolk, Virginia, was blocked by the 1942 submarine menace.
In February 1943 Kidde died. His deputy and executive officer Henry K. Norton succeeded him as the Susquehanna's trustee, and he opted to continue Kidde's restructuring plans for the company. By June 1945, almost all of the Susquehanna's remaining steam locomotives had either been retired or sold off, and they declared themselves as the first Class I railroad in the United States to completely dieselize. Three locomotives, 2-10-0s Nos. 2435, 2461, and 2492, were retained as yard switchers, until they were also retired by October 1947.
After World War II ended, coal continued to be shipped from Edgewater to Europe, in accordance with the Marshall Plan, until the NYS&W shut down their coal terminal in 1948. During that time, the railroad signed a contract with Seatrain Lines to provide rolling stock-shipping services at Edgewater.
By November 1951, the Susquehanna's entire passenger car fleet was replaced with stainless steel cars, their entire streamlined rail car fleet was replaced with Budd Rail Diesel Cars, and many of their passenger stations were revamped. On June 3, 1953, the NYS&W emerged from bankruptcy and completed its reorganization process, having reduced their capitalization from $42 million to $16 million. Norton subsequently became the NYS&W's newest president, as a reward for his and Kidde's restructuring methods.
1955-1961 financial troubles
Two years later, in 1955, stockholders voted to have Norton demoted to chairman and replaced by former Chicago Great Western vice-president James M. Baths due to Norton's excessively-progressive foresight. In December that same year, the railroad chose a new head: Ralph E. Sease, a former Central of Georgia executive.
By that time, the Susquehanna had run all of their passenger trains at a financial loss due to declining ridership and competition from a new park and ride service. The railroad considered filing an application to discontinue their passenger services. Further revenues were lost after a primary customer, the Ford Motor Company, closed their Edgewater assembly plant.
Following the Recession of 1957, the NYS&W experienced additional financial problems, and a portion of their other freight customers abandoned the railroad to begin relying on truck shipping. Sease opted to arrange some cutbacks for the company, which involved discontinuing a number of their commuter services and moving their Jersey City passenger terminus from the Erie's Pavonia Terminal to the DL&W's Hoboken Terminal.
The NYS&W subsequently sold off its Budd passenger cars and replaced them with used second-hand equipment. One of the other cutbacks was the abandonment of the Hanford Branch, the remains of the original NJM-NY&OM route. It had lost its farm traffic to the recession, and long-time interchange partner NYO&W had shut down.
In 1961, another one of the NYS&W's long-time interchange partners, the Lehigh and New England Railroad (L&NE), ceased operations as well. The following year, the NYS&W consequently abandoned its route between Hainesburg and Sparta Junction. The route was later ripped up and became part of the Paulinskill Valley Trail.
Irving Maidman ownership
In October 1962, the NYS&W was purchased by New York real estate developer and millionaire Irving Maidman. Maidman previously acquired the former Ford Edgewater plant for use as a rental warehouse, and since the NYS&W served the building, Maidman opted to purchase the majority of the railroad's shares to ensure their freight services in Edgewater remained active.
The first task Maidman did for the NYS&W was to obtain a $550,000 federal loan for the purchase of three EMD GP18 road switchers to assist the NYS&W's failing ALCO locomotives. In 1963, Maidman became the NYS&W's newest board chairman and chief executive officer (CEO), and he began to install new executives for the railroad, including his wife Edith Shivitz and his son and attorney Robert Maidman. The management changes also involved Ralph Sease resigning from his president position and being replaced by John P. Clark.
That same year, Maidman began to have the NYS&W prioritize on serving his warehouse business, but the railroad consequently began to neglect their other stockholders and the rest of their remaining freight customers. Maintenance on the NYS&W's infrastructure also became deferred, and in ensuing years it resulted in derailments and slower deliveries. This in turn resulted in additional customers abandoning the railroad.
Maidman also arranged for the NYS&W to sell some of their land properties to other businesses Maidman owned, and they began to lease some new land property in Edgewater for use as backup storage. He also discontinued all of the NYS&W's bus services, and he filed a petition to the state of New Jersey to terminate all of the railroad's commuter services. As a desperate attempt to eliminate all ridership, Maidman personally offered to pay the NYS&W's 200 remaining commuters $1,000 each to stop using their trains, but only five of them accepted.
Maidman's tactics were challenged by commuters, and the State of New Jersey argued on their behalf against the railroad at the US Supreme Court in December of 1963. A 9-0 decision kept passenger service continuing at the time. However, by June 1966, the NYS&W obtained court permission to terminate all of their passenger services, despite commuters' continuing efforts to keep them running. The railroad's final commuter train operated on June 30 with only a day's notice, and the following day, uninformed commuters waited to board NYS&W trains that never arrived.
Around that time, Maidman considered retiring and selling 90% of the NYS&W's interest while retaining 10%. In doing so, he petitioned the Interstate Commerce Commission (ICC) to have the NYS&W involved in the Pennsylvania Railroad-New York Central merger. The ICC in turn asked the PRR and NYC to include the Susquehanna, along with the bankrupt New York, New Haven and Hartford Railroad (New Haven) in the merger as a condition. Both railroads agreed, since the Susquehanna provided a major connection between the PRR and NYC in New Jersey.
The new Penn Central Transportation Company (PC) was formally created on February 1, 1968, and the New Haven was folded in on December 31 of that year. The NYS&W was excluded. Their inclusion fell through due to a dispute between Maidman and PC's management over the railroad's price value; Maidman wanted to sell the NYS&W for its business value, while PC's management wanted to purchase it for its salvage value. In March 1969, the NYS&W withdrew their ICC application to save costs and continue independently.
By December 1968, the Susquehanna turned a profit for the first time since 1955, with an income of $17,755. That same year, the railroad lost another interchange partner, the Lehigh and Hudson River Railway (L&HR), when their Station Road bridge in Sparta was deemed unsafe. The Susquehanna had to cut back their Sparta route to Oak Ridge. Also in that same year, Seatrain Lines breached their shipping contract with the NYS&W by moving their shipyard operations from Edgewater to Brooklyn for a separate partnership with the U.S. government, and Maidman sued Seatrain for $4.8 million in compensatory damages.
The NYS&W also sued the Erie's successor, the Erie Lackawanna Railway (EL), for $1.6 million in unpaid usage of Susquehanna trackage, but they subsequently settled for a $186,315 claim, and the EL agreed to pay a $15,000 yearly fee. By the end of 1969, the NYS&W turned a profit of $297,644. In 1970, NYS&W executive William T. Frazier became the railroad's newest president, after the position had been changed three times within the previous five years.
In 1971, the NYS&W lost their interchange with the Central Railroad of New Jersey (CNJ) at Green Pond Junction, when a stretch of trackage at Smoke Rise was washed away and mud-covered by Tropical Storm Doria. Following the damage from Doria along with that from Hurricane Agnes the following year, the Susquehanna began operating at a financial loss again, and the condition of their remaining trackage worsened. Concurrently, Irving Maidman also began to lose money from his other businesses, and he began intentionally defaulting on property taxes owed to the state of New Jersey and Citibank, believing they were overcharging him.
From Wikipedia’s article on New York, Susquehanna and Western Railway, shared under CC BY-SA 4.0.3