History of the Penn Lake System

During the mid 1920s, the Delaware & Hudson and the Reading Company, began to purchase the stock of an anthracite shortline named the Penn Lake Railway, in an attempt to increase their anthracite traffic. While neither road was successful in gaining complete control of the line, together they acquired the majority stake in it and were able to prevent the PL from falling into the hands of either the Lehigh Valley, or Lackawanna. However, the ICC prevented either company from exercising operational control. As a result, the Penn Lake continued to operate independently, much like the ACL and L&N’s Clinchfield. The acquisition also provided a connection to the New Haven for both roads.

Originally, the line carried mostly anthracite. Iron ore and cement soon eclipsed coal as PL's money makers. Following World War II, Penn Lake became a crucial link for bridge traffic between D&H's Canadian connection at Montreal, and Reading's Midwest and South connections at Hagerstown. Soon after Norfolk & Western acquired a direct connection to Reading, CP Rail and Norfolk & Western began the Canada Direct expedited run through trains. Similar New England Direct trains operated in conjunction with New Haven.

Penn Lake’s locomotives carried Penn Lake marking, but followed the motive power policies of it’s parents. It's diesels sported Reading's unique equipment and D&H's black paint scheme. By the late 1960s, PL operated with hand me down RS3s and S2s. Penn Lake quickly gained a reputation as an Alco lovers paradise. Increasingly though, the priority trains ran with the parent's front line power. The Canada Direct trains used CP and N&W run though power almost exclusively.

On April 1^st 1976, the Reading’s interest in the PL transferred to Conrail. Conrail, uninterested in the line, soon sold it’s holdings to the D&H. The D&H integrated PL’s operations into it’s own, but never bothered to formally merge company . During it’s purchase by Guilford, D&H lost control of the PL to a group of Pennsylvania and New York investors.

The new ownership consolidated the Penn Lake Railway with other Conrail spin offs and renamed the line the Penn Lake System. Built during the late 19^th Century, the PL had generous clearances. The PLS quickly rehabbed the track and instituted double stack service from the Port of New York/New Jersey.

The PLS, using it’s Anthracite Speedway slogan, developed a reputation for fast, on time service, and prospered. By the early 1990s, PLS and it’s lucrative traffic from the Port of New York/New Jersey attracted the attention of the expansionist CP Rail. CP began to acquire interest in the PLS. In 1996, CP acquired 100 percent of the PLS, and merged it back into the D&H.