Philadelphia and Reading Railroad Co. - $50 Bond

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The Reading Company (/ˈrɛdɪŋ/ RED-ing) was a railroad in southeast Pennsylvania and neighboring states whose final iteration ran from 1924 until 1976, when it was absorbed by Conrail. The Reading’s oldest corporate predecessor, however, was the Schuylkill and Susquehanna Navigation Company incorporated, a canal company, making the Reading the oldest railroading corporation in the United States.

Commonly called the Reading Railroad, and logotyped as Reading Lines, the Reading Company was a railroad holding company for the majority of its existence and was a (single) railroad during its later years. It operated service as Reading Railway System and was a successor to the Philadelphia and Reading Railway Company founded in 1833. Until the decline in anthracite loadings in the Coal Region after World War II, it was one of the most prosperous corporations in the United States.

Competition with the modern trucking industry that used the Interstate highway system for short distance transportation of goods, also known as short hauls, compounded the company's problems, forcing it into bankruptcy in the 1970s. Its railroad operations were merged into Conrail in 1976, but the corporation lasted into 2000, disposing of valuable real estate holdings.

The Philadelphia and Reading Railroad (P&R) was one of the first railroads in the United States. Along with the Little Schuylkill, a horse-drawn railroad in the Schuylkill River Valley, it formed the earliest components of what became the Reading Company. Primarily, the P&R was constructed to haul anthracite coal from the mines in northeastern Pennsylvania's Coal Region to Philadelphia.

The original P&R mainline extended south from the mining town of Pottsville to Reading and then onward to Philadelphia, following the gently graded banks of the Schuylkill River for nearly all of the 93-mile journey. The original Reading mainline was double track from its very beginning in 1843.

The P&R became profitable almost immediately. Energy-dense coal had been replacing increasingly scarce wood as fuel in businesses and homes since the 1810s, and P&R-delivered coal was one of the first alternatives to the near-monopoly held by Lehigh Coal & Navigation Company since the 1820s. Soon the P&R bought or leased many of the railroads in the Schuylkill River Valley and extended westward and north along the Susquehanna into the southern end of what became known as the Coal Region.

In Philadelphia, the Reading also built Port Richmond, the self-proclaimed "Largest privately owned railroad tidewater terminal in the world", which burnished the P&R's bottom lines by allowing anthracite coal to be loaded onto ships and barges for export. In 1871, the Reading established a subsidiary called the Philadelphia and Reading Coal and Iron Company, which set about buying anthracite coal mines in the Coal Region.

This vertical expansion gave the P&R almost full control of anthracite coal from mining through market, allowing it to compete successfully with like-organized competitors such as Lehigh Coal & Navigation and the Delaware & Hudson Canal Company.

The heavy investment in coal paid off quickly. By 1871, the Reading was the largest company in the world, with $170,000,000 in market capitalization, and may have been the first conglomerate in the world. In 1879, the Reading gained control of the North Pennsylvania Railroad which provided access to the burgeoning steel industry in the Lehigh Valley.

The Reading further expanded its coal empire by reaching New York City by gaining control of the Delaware and Bound Brook Railroad in 1879, and building the Port Reading Railroad in 1892 with a line from Port Reading Junction to Port Reading on the Arthur Kill. This allowed direct delivery of coal to industries in the Port of New York and New Jersey in northeastern New Jersey and New York City by rail and barge instead of the longer trip by ships from Port Richmond around Cape May.

Instead of broadening its rail network, the Reading invested its vast wealth in anthracite and its transport in the mid-19th century. This led to financial trouble in the 1870s. In 1890, Reading president Archibald A. McLeod saw that more riches could be earned by expanding its rail network and becoming a trunk railroad.

McLeod went about trying to control neighboring railroads in 1891. He was able to gain control of the Lehigh Valley Railroad, Central Railroad of New Jersey, and the Boston and Maine Railroad. The Reading almost achieved its goal of becoming a trunk road, but the deal was scuttled by J.P.Morgan and other rail barons, who did not want more competition in the northeastern railroad business. The Reading was relegated to being a regional railroad for the rest of its history.

The Philadelphia and Reading Rail Road was chartered April 4, 1833, to build a line between Philadelphia and Reading, along the Schuylkill River. The portion from Reading to Norristown opened July 16, 1838, the full line December 9, 1839. Its Philadelphia terminus was at the state-owned Philadelphia and Columbia Railroad (P&C) on the west side of the Schuylkill River, from which it ran east on the P&C over the Columbia Bridge and onto the city-owned City Railroad to a depot at the southeast corner of Broad and Cherry Streets.

An extension northwest from Reading to Mount Carbon, also on the Schuylkill River, opened on January 13, 1842, allowing the railroad to compete with the Schuylkill Canal. At Mount Carbon, it connected with the earlier Mount Carbon Railroad, continuing through Pottsville to several mines, and would eventually be extended to Williamsport. On May 17, 1842, a freight branch from West Falls to Port Richmond on the Delaware River north of downtown Philadelphia opened. Port Richmond later became a very large coal terminal.

On January 1, 1851, the Belmont Plane on the Philadelphia and Columbia Railroad, just west of the Reading's connection, was abandoned in favor of a new bypass, and the portion of the line east of it was sold to the Reading, the only company that continued using the old route.

The Lebanon Valley Railroad was chartered in 1836 to build from Reading west to Harrisburg. Reading financed the construction of the Rutherford Yard to compete with the PRR's nearby Enola Yard. The Reading took it over and began construction in 1854, opening the line in 1856. This gave the Reading a route from Philadelphia to Harrisburg, for the first time competing directly with the Pennsylvania Railroad, which became its major rival. In 1859 the Reading leased the Chester Valley Railroad, providing a branch from Bridgeport west to Downingtown. It had formerly been operated by the Philadelphia, Germantown and Norristown Railroad.

A new Philadelphia terminal opened on December 24, 1859, at Broad and Callowhill Streets, north of the old one at Cherry Street. The Reading and Columbia Railroad was chartered in 1857 to build from Reading southwest to Columbia on the Susquehanna River. It opened in 1864, using the Lebanon Valley Railroad from Sinking Spring east to Reading. The Reading leased it in 1870.

The early Philadelphia and Reading Railroad named all of their locomotives with names such as Winona or Jefferson, as did most American railroads following in the British precedent, but in December 1871 the P&R replaced all the names with numbers. The Port Kennedy Railroad, a short branch to quarries at Port Kennedy, was leased in 1870. Also that year, the Reading leased the Pickering Valley Railroad, a branch running west from Phoenixville to Byers, which opened in 1871.

In 1873, the P&R extended its reach southward by leasing 10.2 miles of track from the Philadelphia, Wilmington and Baltimore Railroad. Dubbed the Philadelphia & Chester Branch, the line extended from the Gray's Ferry Bridge across the Schuylkill River in West Philadelphia to Ridley Creek in Ridley Park in Delaware County. The segment included 4.9 miles of double track and 16.7 miles of single track, including sidings and turnouts.

The segment was part of the original 1838 line of the PW&B, which in 1872 opened a new stretch of track further inland to serve more populated areas and reduce flooding. On July 1, 1873, the PW&B agreed to lease the freight rights to the P&R for "$350,000 payable at the time the lease was made and $1 a year thereafter" for a term of 999 years with the stipulation that no passenger trains would use it. The Reading dubbed the line, along with some connecting track, its Philadelphia and Chester Branch; southbound trains reached it via the Junction Railroad, jointly controlled by PW&B, Reading, and PRR, and continued on to the connecting Chester and Delaware River Railroad.

During 1875, four members of the Camden and Atlantic Railroad board of directors resigned to build a second railroad from Camden, New Jersey, to Atlantic City by way of Clementon. Led by Samual Richards, an officer of the C&A for 24 years, they established the Philadelphia and Atlantic City Railway (P&AC) on March 24, 1876. A 3-foot-6-inch narrow gauge was selected because it would lower track laying and operating costs. Work began in April 1877, and the track work was completed in a remarkable 90 days.

On July 7, 1877, the final spike was driven and the 54.67 miles (87.98 km) line was opened in time for summer tourism season. However, on July 12, 1878, the P&AC Railway slipped into bankruptcy; on September 20, 1883, it was jointly acquired by the Central Railroad of New Jersey (CNJ) and the Philadelphia and Reading Railway for $1 million. The name was changed to Philadelphia and Atlantic City Railroad on December 4, 1883. The first major task was to convert all track to standard gauge, which was completed on October 5, 1884. The Philadelphia and Reading Railway acquired full control on December 4, 1885.

The Reading leased the North Pennsylvania Railroad on May 14, 1879. This gave it a line from Philadelphia north to Bethlehem, and also the valuable Delaware and Bound Brook Railroad, the descendant of the National Railway project, providing a route to New York City in direct competition with the Pennsylvania Railroad's United New Jersey Railroad and Canal Company. At the New York end it used the Central Railroad of New Jersey's Jersey City Terminal from which passengers could board ferries to Liberty Street Ferry Terminal, Whitehall Terminal, and West 23rd Street in lower Manhattan.

The Reading Terminal opened in Philadelphia in 1893. On May 29 the Reading leased the Central Railroad of New Jersey. The Reading eventually bought a majority of the CNJ's stock in 1901.

Effective April 1, 1889, the Philadelphia and Reading Railway consolidated the Philadelphia and Atlantic City Railway, Williamstown & Delaware River Railroad, Glassboro Railroad, Camden, Gloucester and Mt. Ephraim Railway, and the Kaighn's Point Terminal Railroad in southern New Jersey into The Atlantic City Railroad. The Port Reading Railroad was chartered in 1890 and opened in 1892, running east from a junction from the New York main line near Bound Brook to the new port of Port Reading, on the Arthur Kill near Perth Amboy.

The Lehigh Valley Railroad was leased on December 1, 1891 under the presidency of Archibald A. McLeod, but that lease was canceled on August 8, 1893 when the Reading went into receivership, an event associated with the Panic of 1893. The Reading also relinquished control of the Central New England Railroad and the Boston and Maine Railroad. Amid the turmoil of the Panic of 1893, Joseph Smith Harris was elected president. Under his leadership, the Reading Company was formed and the P&R was absorbed into it on November 30. Also in 1893, the Philadelphia and Reading Railroad built its most famous structure, Reading Terminal in Philadelphia. Reading Terminal served as the terminus for most of the Reading's Philadelphia bound trains, as well as the headquarters for the Company.

After the Panic of 1893, and the failure of Archibald A. McLeod's efforts to turn the Reading into a major trunk line, the Reading was forced to reorganize under suspicions of monopoly. The Reading Company was created to serve as a holding company for the Reading's rail and coal subsidiaries: the Philadelphia and Reading Railway, and the Philadelphia and Reading Coal and Iron Company, respectively. However, in 1906, with the support of the Roosevelt Administration, the Hepburn Act was passed. This required all railroads to disinvest themselves of all mining properties and operations, and so the Reading Company was forced to sell the P&R Coal and Iron Company.

Even though moving and mining of coal was its primary business, the P&R eventually became more diversified through the development of many on-line industries, averaging almost five industries per mile of main line at one point, and the expanding role of the Reading as a bridge route.

This included its important role on the Alphabet Route, from Boston and New York to Chicago, with traffic from the Lehigh Valley Railroad and Jersey Central entering the Reading System in Allentown, traveling over the East Penn Branch to Reading, where trains then traveled west over the Lebanon Valley Branch to Harrisburg, and then onward over the Philadelphia, Harrisburg and Pittsburg branch, or PH&P to Shippensburg, Pennsylvania. There trains connected with the Western Maryland Railroad to continue westward. This route became known as the “Crossline” and became very important. Therefore, the Reading started to pool locomotive power between its connecting railroads to provide a more seamless transfer of freight and passengers.

Even though the Reading was never again to regain its powerful position of the 1870s, it still was a very profitable and important railroad. From the turn of the 20th century to the outbreak of World War I, the Reading was among the most modern and efficient railroads. In keeping with the standards of much larger railroads, The Reading embarked on many improvement projects which typically were not attempted by smaller railroads. This included triple and quadruple tracking many of its major routes, improving signaling and track quality, as well as expanding system capacity and station facilities.

The Reading invested in the construction of new cut-offs, bypasses, and connections, much like the Pennsylvania Railroad's "Low-grade" lines and the Lackawanna Cut-off. The completion of the Reading belt line in 1902, a 7.2 mile long westerly bypass of downtown Reading, alleviated the heavy rail congestion in the busy city.

In Bridgeport, a new bridge was constructed over the Schuylkill River in 1903. The bridge connected the P&R main line on the west (south) bank of the river with the Manayunk/Norristown Line on the opposite side, allowing passenger service to Norristown, and a bypass of the old main line, known as the West Side Freight line.

The Ninth Street Branch—the main thoroughfare into Reading Terminal—was also improved. Between 1907–1914 the old double track and street level route was replaced by an elevated quadruple track route that offered greater capacity and safety. In 1901, the Reading gained a controlling interest in the Central Railroad of New Jersey, allowing the Reading to offer seamless, one-seat rides from Reading Terminal in Philadelphia to the CNJ's Jersey City Communipaw Terminal by way of Bound Brook onto the CNJ mainline. The Baltimore and Ohio Railroad was also looking for access to the New York market, and in 1903 the B&O gained control over the Reading and thus ensured its trains track rights over the Reading and CNJ to Jersey City.

To the north, the New York Short Line was completed in 1906, and was a cut-off for New York Bound through freights and the B&Os Royal Blue.

In 1900, the Reading Shops began construction along the Reading yards and North 6th Street, facilitating the maintenance and construction of a greater locomotive and rolling stock fleet. The shops were completed four years later, with their imposing brick architecture, they were the largest railroad shops in America, and unlike most railroads, allowed the Reading to make its own engines. They still stand today in non RR use.

Larger steam locomotives were introduced to haul the increasing traffic, including the massive N1 class 2-8-8-2 (Chesapeake) Mallet, and Reading made one M1 class 2-8-2 freight hauler, Baldwin Locomotive Works built the rest. Big freight haulers were the massive K-1 2-10-2 locomotives, some were built in Reading, Pennsylvania from the Mallets, others were built by Baldwin. The G1 class 4-6-2 were passenger locomotives. These classes were an important break of tradition of the Readings motive power fleet.

The M1s were the first Reading locomotives to include a trailing truck, and the first engine with the cab behind the Wootten firebox. Engines with the name "lessor" in its title meant some steam power was owned by a second party and leased to the P&R. The G1s were the first Reading passenger locomotives with three coupled driving wheels.

In 1945–47 the company took 30 class I-10 2-8-0 locomotives and rebuilt them at the 6th Street facility into the modern T1 class 4-8-4 locomotives at a cost of 6 million dollars. This was a move to offset the fact that EMD FT diesel locomotives (first choice of Reading management) were very hard to obtain, and in order to have faster, up to date modern power. The steamers never ran long enough to pay back this major investment, and had some major problems, but it did keep men employed. The Reading built or bought numerous smaller 4-4-0s, 2-8-0s and switchers for its fleet.

The Reading Company did not operate extensive long distance passenger train service, but it did field a number of named trains, most famous of which was the streamlined Crusader, which connected Philadelphia and Jersey City.

Other trains in the fleet included the Harrisburg Special (between Jersey City and Harrisburg), King Coal (between Philadelphia and Shamokin, Pennsylvania), North Penn (between Philadelphia and Bethlehem), Queen of the Valley (between Jersey City and Harrisburg), Schuylkill (between Philadelphia and Pottsville), and Wall Street (between Philadelphia and Jersey City). The Reading participated in the joint operation of The Interstate Express with the Central Railroad Company of New Jersey and the Delaware, Lackawanna & Western Railroad, with service between Philadelphia and Syracuse, New York.

Reading also offered through passenger car service with the Lehigh Valley Railroad via their connection at Bethlehem. Like most railroads the Reading had contracts with the US Post Office to haul and sort mail en route. After the Second World War the Reading looked at dropping the mail and in 1961 notified the Govt. that it intended to stop mail service on their passenger trains. On July 1, 1963, the Post Office let them out of the contracts (valued at $2,137,000), and the railroad switched to Budd RDC self-propelled cars, instead of locomotive hauled passenger trains, to save money.

Camden-Atlantic City speed. On 20 July 1904, regularly-scheduled train no. 25, running from Kaighn's Point in Camden, NJ to Atlantic City NJ, with Philadelphia and Reading Railway class P-4c 4-4-2 (Atlantic class cab over boiler) locomotive No.334 and 5 passenger cars set a speed record. It ran the 55.5 miles in 43 minutes at an average speed of 77.4 mph. The 29.3 miles between Winslow Jct and Meadows Tower (outside of Atlantic City) were covered in 20 minutes at a speed of 87.9 mph. During the short segment between Egg Harbor and Brigantine Jct, the train was reported to have reached 115 mph.

The Reading operated an extensive commuter network out of Reading Terminal in Philadelphia. In the late 1920s most of the suburban system was electrified (the first lines electrified were the Ninth Street Branch, New Hope Branch, the Bethlehem Branch as far as Lansdale, the Doylestown Branch, and the New York Branch to West Trenton). Reading ordered 150 electric multiple units from Bethlehem Steel which were supplemented by twenty unpowered coach trailers converted from existing coaches and electrified services began on July 26, 1931.

After the first World War, and the return of the Reading from government control, the Reading decided to streamline their corporate structure. For twenty years the Reading Company, the holding company created for the P&R and the P&R Coal and Iron Company, only controlled the P&R after the sale of the P&R Coal and Iron Company. To simplify corporate structure the P&R ceased operation in 1924 and the Reading Company took over operating the Railroad.

The period just after World War I may have been the Reading Company's best, with traffic on the Reading at its peacetime high. Annual volume was about 15 million tons of Anthracite, 25 million tons of Bituminous Coal, with a further 30 million tons of industrial traffic. The Reading had taken great strides to wean itself of anthracite dependency but it still relied heavily on coal revenue, and Pennsylvania anthracite production had peaked in 1917 with 99.7 million tons produced.

The 1925 "Reading" totals above include all the subsidiaries (C&F, G&H, P&CV etc.) that were operating roads in 1925 but whose totals were included in Reading's after 1929. None of the totals include Atlantic City RR or PRSL.

In the 1920s, the Reading operated a dense network of commuter lines branching off of the Ninth Street Branch mostly powered by small 4-4-0s, 4-4-2s and 4-6-0 camelbacks.

The Reading Company was forced to file for bankruptcy protection in 1971. The bankruptcy was a result of dwindling coal shipping revenues, freight being diverted to highways by trucking companies, and strict government regulations that denied railroads the ability to set prices, required high taxes, and forced the railroads to continue to operate money-losing lines as a common carrier.

The railroad also had an extensive commuter operation centered around Philadelphia, the hub of which was Reading Terminal. The following suburban lines were electrified during the onset of the Great Depression:

• Norristown Line
• Chestnut Hill
• Lansdale/Doylestown
• Hatboro (extended to Warminster in 1974)
• West Trenton

The notable exception was the Fox Chase/Newtown branch. With the aid of public funding from the city of Philadelphia, the line was electrified as far as Fox Chase (the last station within city limits) in September 1966.

Electrification was to be completed through to Newtown in the 1970s, but government subsidies were not readily available, leaving the Fox Chase-Newtown section as the lone non-electrified suburban commuter route on the Reading system. Passenger service between Fox Chase and Newtown was terminated on January 14, 1983 under the auspices of SEPTA.

To further complicate matters, the Reading was forced to continue paying its debts to the Penn Central Railroad, however, Penn Central (also in bankruptcy at the time) was not required to pay its debts to the Reading Company.

On April 1, 1976, the Reading Company sold its current railroad interests to the newly formed Consolidated Railroad Corporation (Conrail), leaving it with 650 real estate assets, some coal properties, and 52 abandoned rights-of-way. As of 1999, most former Reading lines are now part of Norfolk Southern Railway (NS), as a result of the Conrail split between NS and CSX Transportation. It had sold 350 of the real estate tracts by the time it left bankruptcy in 1980.

In the late 1980s a Los Angeles-based lawyer named James Cotter gained control of the corporation through his holding company, the Craig Corporation, and used its assets to finance his movie theater chains in Puerto Rico, Australia and New Zealand. The company sold one of its last railroad-related assets, the Reading Terminal Headhouse, in 1991. In 1996, Cotter reorganized the company as Reading Entertainment. On December 31, 2001, both Reading Entertainment and Craig Corporation merged into and with Citadel Holding Corporation, another Cotter company.

The successor company was renamed Reading International Inc. with two classes of stock Non-Voting Class A shares (NASDAQ: RDI) and Voting Class B shares (NASDAQ: RDIB).

• Crusader – Jersey City to Philadelphia (Reading Terminal), via West Trenton
• Main Line to Pottsville
• Queen of the Valley (eastbound: called Harrisburger)-- Jersey City to Harrisburg (Harrisburg Central Sta., also known as Pennsylvania Station)
• King Coal—Philadelphia to Shamokin, via Reading (Reading Franklin Street Terminal) and Pottsville on the Reading's Main Line
• Scranton Flyer to Scranton

In conjunction with other railroads:

• Interstate Express to Syracuse (with the Lackawanna Railroad and the Central Railroad of New Jersey)
• Maple Leaf to Toronto via Buffalo (with the Lehigh Valley Railroad)

The presidents of the Reading were:

As a part of Norfolk Southern's 30th anniversary in 2012, the company painted 20 new locomotives into predecessor schemes. NS #1067, an EMD SD70ACe locomotive, was painted into the Bee Line Service paint scheme of the Reading.

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