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March 2005 - Page 38


Lorane Water Tank on the SV Main. A thirsty C&O H6 takes on water before proceeding westbound to Perkiomen on SV track.


\A trio of pristine Chessie F units rumble past the Kobb Farm pumpkin patch with a long drag of Pennsylvania black diamonds. C&O power frequently polishes the SV rails. could coerce. This embargo was not lifted until shortly after the turn of the century. As a result, the CC&N, lacking its urgently needed traffic base, was soon demoted from secondary main to branchline status. SV was forced to search elsewhere for ways to fill the unexpected gap; success would be very slow in coming. For the early part of the 20th century, the SV grew at a snails pace and posted only marginal profits. Utilizing the concept of deferred maintenance and running the equity out of the infrastructure, they maintained their balance sheet. Sooner or later though, something would give. It wasnt until WWI and the resulting industrial boom that the SV began to rebound. Leading up to 1914, the SV adopted a tortoise strategy and methodically, but cautiously, began developing a rapport with every possible on-line shipper/consignee, along with every possible bridge-traffic originator/terminator. Every possible source of traffic was considered. Slowly, and with the giants repeatedly wounding each other, the SV was emerging as a darling among disgruntled traffic managers. By the time the war officially came to America in 1917, the major trunks promptly bogged down for hundreds of miles inland from every East Coast port. The SV and CC&N link became a route-of-choice for non-export traffic seeking to bypass coastal congestion. For the second time, the SV managed to put together a plan that outfoxed the big boys. Thanks in part to past stockpiling, their over-engineered and under-utilized infrastructure, and quickly addressing deferred maintenance, the SV responded to opportunity. SVs coffers flowed with the influx of hard cash and thereafter, continued to do so until the 1930s. Government

wartime material restrictions prevented the SV from double-tracking its main lines. (Although an obvious setback, this event became a backhanded windfall to the SV, its salvation during the coming Great Depression). It was during these times that the SV developed a goldmine of trackage rights. The first reported arrangement of this type was with the Jamestown and Jackson City Central, an obscure line in southeastern Pennsylvania now believed to have been a B&O affiliate. No records remain of these transactions although some Jamestown and Jackson City Central equipment continues to be seen from time to time moving in normal interchange service on SVs lines. The SV developed a north-south link when David Lowrys fast-growing Piedmont Railway System (reputed to be linked to both Harriman and Vanderbilt interests and Southern Railways primary competitor), negotiated an unprecedented set of trackage rights. For a large but undisclosed amount of cash, Lowry acquired unrestricted rights to operate over all present and future SV and CC&N main and secondary lines from Harrisburg to both Allentown and Philadelphia for a period of 199 years. This daring arrangement completed Piedmonts access to its secretly owned connections with the B&A, D&H and the NYC at Albany, NY. For SV, the resulting monthly lease payments became a strong and predictable source of profitable income. The decade of the Twenties was boom time for the SV. The post-War recession and readjustment were of short duration and were followed almost immediately by the beginnings of an exciting upward spiral. Shortly after release from government control in January 1920, the SV began to purchase large numbers of new locomotives and cars of USRA design. Massive upgrades were performed on all equipment; addition of telephone communications and other current state of the art advances. By 1928, SVs lean plant of main tracks and yards had been completely rebuilt to the highest standards of the day, comparable to those of its giant rivals. SV was on the fast track to becoming a rich railroad. Skillful application of healthy dividends brought the attention of Wall Street. This enabled the SV to attract public and professional equity capital in quantities and at prices that enabled it to retire debt. By doing so, they reduced leverage and carrying charges to levels that successfully deflected the hordes of margin-mad manipulators that were soon to ruin so many other companies. The only fundamental weakness in SVs armor was its excessive preoccupation with its own lines to the initially benign but later chronic neglect of the former CC&N branch to Allentown. During World War II, that oversight was to become SVs Achilles heel. The effects from the market crash of 1929 had little effect on the SV. With the capital they acquired in the prior decade and


MARCH 2005

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