Re: Pennsy's RFC Loans


If I did my sums correctly, the Pennsy had 12.1% of
their freight cars bad ordered in 1958. Isn't this a
classic definition of "deferred maintenance", if the
industry norm was 3%. Makes one wonder if rest of the
infrastructure was similarly neglected. No wonder, Pennsy
was out of business within fifteen years.

Lends credence to the report concerning the PennCentral, "If
there were positive developments they likely occurred in
former NYC territory, and negative developments tended to be
in the former Pennsy territory".

Michael Carson

----- Original Message -----
From: <>
To: <>
Sent: Saturday, 24 November, 2001 19:23
Subject: [STMFC] Pennsy's RFC Loans

: Tony responded to Larry with the following information:
: << Interesting point. A number of the railroads which
borrowed money from
: the RFC in the 1930s paid off those loans during WW II,
as noted in an
: interesting article in a post-war Moody's. (Including SP,
which had a total
: of four RFC loans.) If PRR couldn't do that, it's a red
flag for their
: financial condition. >>
: The Pennsylvania borrowed close to $100 million from the
RFC. While
: testifying before the Senate in 1958, John Symes,
President of The
: Pennsylvania, reported that the loans were used to
electrify the line between
: New York City and Washington D. C., he noted that the
loans were paid back
: (in full with interest). Noted also was the fact that the
loans were used to
: employ thousands of men during the depth of the "Great
Depression" adding a
: bonus to the government's loan interest.
: Symes reported that the Pennsy owned 175,345 freight cars
in 1957. The "rule
: of thumb" for freight equipment in need of repair averaged
: 1957 the Pennsy exceeded the 3% mark by 15,996 units. The
estimated cost to
: cut the percentage to 3% was a staggering $23,386,150.
: Regards,
: Guy Wilber
: Sparks, Nevada
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