Paved Roads & Public Money. Richard DeLuca

New Haven and its various transportation services with other New England railroads and thereby increase its competitiveness with automotive highway services. Two main alternatives emerged: either to combine the New Haven and other New England roads with strong trunk line roads from outside the region, such as the Pennsylvania Railroad or the New York Central, whose systems provided access to cross-country rail service, or to combine all New England roads into one large regional system, thereby increasing the viability of what was essentially a terminal rail network, designed to collect and distribute freight throughout the region.⁶²

      After more than a decade of shilly-shallying by the railroads, many of which simply refused to discuss the possibility of consolidation, and with the ICC unable by law to impose a consolidation plan on the railroads, the possibility of consolidation as a means to improved rail service disappeared in the 1930s amid the general economic uncertainty of the Great Depression. Which is not to say that the New Haven stood by and did nothing to improve its competitiveness against the onslaught of automobility.

      To begin with, the New Haven in the 1920s converted the equipment it operated on many of its branch lines from steam locomotives to self-propelled, diesel-powered rail bus cars. With a top speed of forty-five miles per hour and needing only a two-man crew to transport up to forty-five passengers, these cars were able to provide passenger and freight service at a fraction of the cost of a traditional steam-driven train. By the 1930s, some branch lines were abandoned altogether while others were converted to larger, sixty-five-passenger gas-electric railcars capable of speeds of fifty-five miles per hour.⁶³

      In 1925, the New Haven Railroad organized the New England Transportation Company, a wholly owned subsidiary created to transport passengers, freight, mail, and express packages throughout the region. The primary purpose of these automotive bus lines was “to provide a coordinated service with the rail company’s trains, reducing the number of station stops, and permitting the discontinuance of some uneconomical train service.” Within a few years, the company was operating more than 150 buses over more than one thousand route miles.⁶⁴

      The gas-powered rail bus was an early attempt by the New Haven Railroad to compete with the automobile. New York, New Haven & Hartford Railroad

      Automobility also impacted the New Haven’s steamboat services. By 1916, as highway improvements spread through the region, trucks became a viable alternative to shipping freight by steamer for trips up to fifty miles in length. As a result, freight tonnage on the New Haven system, which had always been more important than the revenue from passenger service, dropped nearly 50 percent between 1917 and 1921 and continued to fall throughout the 1920s, though not as precipitously. In addition, in the period between the two World Wars, many manufacturers moved out of New England for points south and west, so that all modes were competing for a smaller amount of total freight tonnage. As a result, long-running steamboat service from New York City was abandoned piecemeal: to Bridgeport and New Haven in 1920, to Hartford the following year, and on the outer sound to New London and Norwich in 1934. A strike by steamboat workers in July 1937 finally put an end to all steamboat service on Long Island Sound.

      As steamer service to New York City came to an end in the 1930s, the New England Transportation Company added a fleet of gasoline-powered trucks to its operations in an effort to compete for freight traffic. Two express freight trains with motor-truck feeders served many major cities in the New Haven’s territory, including New York and Boston, under the motto “Accept Today—Deliver Tomorrow.” To attract new long-distance rail passengers, the New Haven also introduced the Yankee Clipper in 1930, its fastest-ever train service from New York to Boston, which traveled the distance between the two cities in a speedy four hours and forty-five minutes.⁶⁵

      In another attempt to compete with the internal combustion engine, the New Haven Railroad considered establishing its own airline, in partnership with Trans World Airlines, to be called TWA New England. However, ticket pricing proved too expensive, and the service was never begun. New York, New Haven & Hartford Railroad

      Last of all, the Connecticut Company, operator of the New Haven’s street railways in cities around Connecticut, announced in 1931 that it planned to substitute motor buses for trolley service on its interurban lines, where thanks to the automobile, large-capacity trolley cars were no longer required. Over the decade, as the popularity of the automobile continued to rise, some intracity trolley lines that had become unprofitable were abandoned, while others were replaced with gasoline-powered motor buses, as once well-used trolley tracks were paved over in city after city around the state. By 1941, those routes still remaining in the Connecticut Company’s Hartford Division were completely converted to motor bus service, though some electric trolleys continued to run on the streets of New Haven until 1948.⁶⁶

      Yet despite all these attempts to adapt to the new world of automobility, the debt accumulated during the Morgan and Mellen expansion still encumbered the New Haven’s balance sheet. It was only through a combination of good management, belt tightening, and federal loans authorized by the Emergency Transportation Act of 1933 that the New Haven was able to remain afloat during the early years of the Great Depression, even as the corporation’s gross revenues declined from $142 million in 1929 to $71 million in 1935. Still, the inevitable could not be postponed forever. Unable to cover the interest on its bonded debt, and with no further outside loans forthcoming, the New Haven Railroad finally filed for bankruptcy on October 23, 1935.

      What followed was a prolonged corporate reorganization that required twelve years, eleven ICC reports, fourteen circuit court decisions, and eight U.S. Supreme Court decisions to untangle the financial affairs of the New Haven and its subsidiaries. At the heart of the road’s financial rehabilitation was the elimination of $200 million in bonded debt, an amount not coincidently similar to that squandered by Morgan and Mellen on their steamboat and trolley purchases a generation earlier. As the ICC noted, “It is apparent that the losses resulting from the New Haven’s investment in other companies are more than sufficient to explain the profit-and-loss deficit existing as of October 23, 1935.”⁶⁷ Indeed, what was remarkable was that the New Haven managed to remain solvent for as long as it did following the financial mischief created by Morgan and Mellen. But in the end, even with a combination of competitive initiatives, good management, and outside financial assistance, the once mighty New Haven, try as it might, could not outrun its own history.