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For all its economic practicality, however, the merger proposal drew a nostalgic sigh from railroad buffs steeped in the two lines' colorful contributions to U.S. business history. For them, the Central, founded in 1853 as a consolidation of nine little railroads in the Mohawk River Valley, still carries the swashbuckling stamp of Commodore Cornelius Vanderbilt. Vanderbilt, who acquired control of the line in 1867, did so by the simple device of blackmail; he cut off the Central's wintertime rail links with New York City until Central stockholders in desperation gave him control of the road. Along with his buccaneering, the Commodore built the Central system into such a solid moneymaker that for decades it was considered a better investment than Government bonds.
Unlike the Central, the Pennsy has always presented a good grey image. Founded by Philadelphia businessmen in 1846, the Pennsy was still a small connecting line in 1852 when its third president, shrewd, sensible J. Edgar Thomson began to build it into the nation's largest road with a series of railroading firsts, including the laying of the first steel rails in the U.S. The Pennsy's proudest tradition is that in 114 years it has never missed paying a dividend.
The Great Rate War. In the 1880s the Central and the Pennsy locked in a head-on battle that saw them spitefully cutting rates until passenger fare from New York to Chicago dropped to $8. When the fight threatened to bring on a stock market. panic, the redoubtable John Pierpont Morgan steamed home from London to take both presidents for a ride up the Hudson on his yacht Corsair while he bulldozed them into declaring a truce. Thereafter, though the two lines fought fiercely for freight, their passenger competition was held mainly to rivalry in luxurious appointments between the Central's famed Twentieth Century Limited and the Pennsy's Broadway Limited.
In recent years the two railroads have not been able to afford the luxury of such rivalry as competition from trucks, planes, cars and buses brought them both hard times. The Central seemed on the verge of a comeback eight years ago when the late Financier Robert R. Young won control and brought in Perlman as president. But despite such spectacular attempts to cut costs as the automation of the Central's huge Big Four freight yards near
Indianapolis, the efforts of Young and Perlman were not enough. At the Pennsy, meanwhile, Symes and Greenough were finding heavy going, even after such imaginative deals as turning the road's old right of way into central Philadelphia over to a massive urban redevelopment project capped by the 20-story Penn Center. Increasingly, it became clear that the best possibility of restoring both roads to health lay in merger.
Renewing the Urge. Talks between the Central and the Pennsy began in 1957, but in 1959, in a move apparently designed to sandbag the Pennsy into offering better terms, Perlman broke off negotiations, incautiously declaring that the merger was not in the public interest. The Central then sounded out the possibility of merging with the B. & O. and C. & O.