The Fight to Save the Raritan River Railroad

Tom’s Raritan River Railroad Page

www.RaritanRiver-RR.com

The Fight to Save the Raritan River Railroad

Once upon a time there was a little short line railroad in the heart of New Jersey named the Raritan River Railroad. The Raritan was small, only 12 miles long, but still very profitable. And like most railroads in the NJ area, she was absorbed into Conrail. While most railroads that were absorbed into Conrail did so on April 1, 1976, the little Raritan managed to survive independently until April of 1980. Here is the story, as best as I can tell it, of the little Raritan’s fight to stay out of Conrail.

The story begins, as we all know, in the late 60’s with the problems faced by the local railroads at the time.

The loss of major industries on the east coast

The almost complete loss of Coal as a commodity

The competition by trucks with the State and Federal funded interstate highway system

The duplicate and triplicate routes that redundantly connected all major cities on the east

The mandated movement of commuter and long distance passengers trains

The lack of efficient policy to abandon unprofitable routes

The lack of an ability to set and manage their own freight rates.

The little Raritan River was jointly owned by both the Pennsylvania Railroad, and the Central Jersey Railroad. As parent companies go, the CNJ seems to have always had financial trouble, being bankrupt many times in its history, entering bankruptcy for the last time in 1967. The PRR became bankrupt after it finalized the biggest merger (at the time) with the New York Central Railroad. The new Penn Central Railroad lasted only 2 years, filing for the largest bankruptcy at the time in 1970. The government was now stuck funding millions of dollars into the railroads to keep them going.

By 1973 the US Congress quickly came up with a plan to nationalize the bankrupt railroads, but the Associations of American Railroads proposed a much different plan for a government funded private company. President Nixon quickly signed the Regional Rail Reorganization Act of 1973 which basically created a bigger and more powerful version of the Interstate Commerce Commission (ICC), named the United States Railway Association (USRA) to oversee the Bankrupt Railroads (PC, RDG, LV, L&HR, CNJ) and all their subsidiaries (PRSL, NY&LB, Allentown Terminal Railroad, etc, etc) and come up with a plan to consolidate them. That plan was eventually called the Final System Plan, and it was released in 1975.

The final system plan called for the government to create a private company consolidated from the bankrupt railroad companies. This Consolidated Railroad Company (Conrail) would be funded under the Railroad Revitalization and Regulatory Reform Act of 1976 signed by President Ford.

Even though the Raritan River Railroad was not bankrupt, they were included in the Final System Plan anyway. The Raritan River was run as an independent company, with independent management, with an independent board of directors. Unfortunately, most of their stock was owned by two bankrupt companies that were going to be merged into Conrail. The lines here were a little blurry on who truly owned and operated the RRRR. One thing was clear; the Raritan River wanted to remain free.

With future revisions of the FSP, by late 1975 it was clear that Conrail was coming and they expected to assimilate the Raritan River Railroad. It was also clear that the Raritan River Railroad didn’t want to be a part of Conrail. They wanted to stay independent. They were not in financial distress, managed their line and their customers very well, and basically just wanted to be left alone.

In Late 1974 or early 1975, the USRA and Conrail came in and commandeered all the financial records from the Raritan for the previous 10 years. Essentially all records of freight, tonnage, customers, maps, billings, from 1964-1974 were taken. Inventories of all locomotives, cars, and cabooses. Inventories of all assets at all Freight Stations and Offices were requested; right down to how many desks, chairs, and adding machines they had. Everything was being assessed and prepared for the takeover. The Raritan was concerned at this point, and crafted a plan to fight as hard as they could.

Even the management of the little Raritan River was a little confused by 1975 on whether they should accept assimilation or not. Bob Kipp (last VP and GM) wrote a letter to the President of the Raritan explaining that the Final System Plan was incomplete and left out some major branches, dated August 11, 1975. Read the reply, a letter from the President of the Raritan River, R. B. WACHENFELD: to the Board of Directors dated August 13, 1975. In he states that “there is … nothing that Raritan River can do to stay out of the Conrail system”. Little did he know, but Bob Kipp, Charlie Miller, and Ray Stockton had other plans!

The Final System Plan explained in great legal detail exactly what was going to happen to the Raritan River Railroad’s lines. But surprisingly, the USRA’s plan had left out a few major branches. The Phoenix branch, which housed the biggest customer of the line, National Lead and US Steel, as well as the Gillespie branch which had Sunshine Biscuit, and the East Brunswick Branch which had Continental Bakery and a large toy company were missed!

The day after Christmas, December 26, 1975, the Raritan River, acting quickly in their best interest, actually filed official motions to “Discontinue Service” on these lines that according to the Final System Plan, were not included in the merger. The day after Christmas, December 26, 1975, Bob Kipp was a very busy manager. He gathered the troops, and started writing letters. Lots of letters. He wrote letters to every customer on the line and the townships they served, and he explained that if Conrail took over, they were going to loose service since they were not in the FSP! Needless to say, the customers and local municipalities were very concerned! Bob wrote the Governor of New Jersey, the ICC, USRA, New Jersey Department of Transportation, even the US Congress was now going to get involved in The Fight to Save the Raritan!

In a separate reply back to Bob Kipp, the ICC even backed the RRRR for issuing these notices. The RRRR explained to all the customers that if Conrail comes in on April 1976, their branches would not be serviced by Conrail as per the FSP. Needless to say, the customers were outraged.

The Raritan River, very tactfully, asked all these customers, as well as all the remaining ones, to write letters and petition the USRA to leave the little Raritan Railroad alone. Every single customer, even the township of East Brunswick, and surprisingly, the NJ DOT, all wrote letters and petitioned that the Raritan be left out of Conrail, and be allowed to continue servicing them as they always had, reliably, independently and unconditionally.

And well, it actually worked. Somehow, April 1, 1976 came and the Raritan River Railroad was not included in Conrail! The RRRR withdrew their “Discontinuation of Service” announcements. I believe that with every customer on the line supporting their cause, with the omission of certain branch lines from the FSP, and with a local independent management and board of directors, the Raritan survived this initial merger.

The Raritan River’s board of directors were comprised of mostly CNJ and PC men. Once Conrail came in to the picture and took over the CNJ and PC, the Raritan River’s board was mostly Conrail. The PC and CNJ stock was also now the property of Conrail. It is unclear to me why the new board just didn’t immediately vote to merge into Conrail. Maybe the fierce resistance of the customers scared them. Maybe Conrail had bigger things to worry about.

By 1978 though, it was clear that even if the Raritan was initially left out, Conrail still wanted them in. The Raritan was always a very profitable railroad company for its size. In that, Conrail looked at them as something they needed to become profitable themselves. The RRRR board, I assume, kept voting to stay out. The customers didn’t want Conrail, now quoting other related departments and industries and their current problems with Conrail shipping. Conrail had to come up with a different plan. And they did.

Conrail needed to find a way to consider the assimilation of the RRRR an “in-house” transfer. If Conrail could prove that this was basically just a management reorganization, “a limited transaction”, then they wouldn’t need the formal ICC review which was required, and then they could just assimilate them. I feel they were afraid of the ICC review, which, if it took the customers’ opinions into consideration, would basically back the RRRR.

So what was stopping them up to this point? I think it was an ownership issue. According to the public documentation available, Conrail filed for the exemption in January of 1980, and it was granted, for 90 days. It states as this was “just a merger within a corporate family” because “Conrail controls the Raritan”, and has “owned all its stock since April 19, 1979”.

So, it seems like sometime in April 1979, someone sold off their remaining stock to Conrail, allowing them to assume full ownership of the RRRR. Once Conrail had “full control”, they applied for the exemption, to eliminate the ICC review process and ignoring the complaints of the customers from allowing the merger to take place. And as we all know, the merger did take place in April of 1980.

So that seems to have been it. Someone owned stock that Conrail needed to assume full ownership. Once they had the stock, then they could merge. It took Conrail 3 years to get the stock, and another year to get the exemption passed to allow them to merge. That’s why the Raritan River Railroad didn’t merge with Conrail in 1976 like most of the other lines.

Who Owned that last piece of Stock?

But the story doesn’t end here. With a lot of research and document review, I believe I have found who had that last bit of remaining stock that Conrail so desperately needed to complete the merger.

Bob Kipp still lives in South Amboy on Bordentown Avenue in the same house he built himself shortly after he got back from WWII. Bob Kipp married his sweetheart Bertie, came back from the War, built himself a house, and right down the block, started working for the Raritan River Railroad. Bob is in his upper 80’s, and I am currently very fortunate and privileged to have met him. You see, Bob didn’t just work for the Raritan River for 24 years; Bob managed the Raritan River Railroad for 15 years!

Bob Kipp was the last Vice President and General Manager of the Raritan River Railroad. Bob started with the company as an accountant in 1956, and next year was voted as Treasurer and Secretary of the company until 1965. In that year Bob Kipp was offered the position of General Manager when Harold T. Filskov decided to move to Vermont. In 1968 Bob was then promoted to be Vice President and General Manager of the RRRR, a title he would hold until the end in 1980.

In the end in 1980, Bob closed up the South Amboy office and the Parlin and Milltown stations, gave Conrail the keys, and took everything home that Conrail didn’t want.

Remember the RRRR Door Glass from South Amboy office; Bob had it in his basement for 25 years. Financial reports from the 1930’s, as well as tonnage reports from the last 50 years…all in Bob’s basement.

Bob Kipp had piles of documents that he saved from the RRRR. All in order, all saved, and all original. And in the pile of documents from 1979, in between the official coorespondence between the shippers and the USRA, was this little hand written note from April. The first time I read it, I didn’t know really what it meant. I didn’t understand the significance until I read how it all ended for the RRRR, that it was a stock issue.

In the collection of Bob Kipp (Last VP and General Manager of the RRRR 1956-1980) I discovered a hand written memo, written on a small blank paper, with the date of April 22, 1979. It says:

4/22/1979

H Filskov says that Wachenfeld had called to say that HF‘s stock

would be purchased – 2 checks

See Fig.1 below.

Fig. 1

Memo regarding H Filscov stock purchase

This document was in a sequential pile of papers from the 1979 time frame. To understand the memo, you now need to know who H Filskov and Wachenfeld were.

Richard B. Wachenfeld was from the CNJ and was the President of the RRRR from 1968 to 1976. He was probably, more or less, still the president of the RRRR until 1980, but technically from 1976-1980, D.A. Swanson from Conrail is listed as President. (According to Rails up the Raritan)

H Filskov is harder to explain. The Filskov family had run the Raritan River Railroad from 1916 to 1965, when they passed management control to Bob Kipp 1965-1980.

Thorvald Filskov 1916-1939

Harold Filskov 1939-1960

Harold T. Filskov 1960-1965

Bob Kipp was the last VP and General Manager, getting control of the Raritan after Harold T. Filskov left and went to Vermont.

The HF in the memo could refer to either Harold, or his son, Harold T. It is not clear, but very believable, that after running the Raritan River Railroad for almost 50 years, that they may have had a little stock.

If my path is correct, the Filskov family had the stock and sold it to Conrail in April of 1979, clearing the way for Conrail to get the exemption they needed, to assimilate the Raritan River Railroad. The end. That was all they needed.

And so the Raritan River lasted an extra 4 years, almost to the day, and eventually did get assimilated into Conrail. Those last 4 years were some of its best, as it stood victorious in the face of a giant, as they independently and profitably switched the local customers of Central Jersey, proud and profitable.

Long Live the Memories of Raritan River Railroad!

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Questions? Comments?

Tom_E_Reynolds@yahoo.com

Other Fine Sites Dedicated to the Raritan River Railroad

www.RaritanRiverRailroad.com

http://www.geocities.com/transit383/rrhist.html

http://jcrhs.org/raritanriver.html

Here is an entire forum dedicated to discussions of the RRRR!