Norfolk and Western Railway Equipment Trust - Pennsylvania 1957

Beautifully engraved Specimen Equipment Trust Certificate from Norfolk and Western Railway dated 1957. This historic document was printed by American Bank Note Company and has an ornate border around it with a vignette of an modern city inside a Cornucopia (Cornucopia is also known as the Horn of Plenty or Harvest Cone) . This item is over 49 years old. 30 dividend coupons attached on right side.


Certificate Vignette

The Norfolk and Western Railway (N&W;) (AAR reporting mark NW), a US class I railroad, was formed by more than 200 railroad mergers between 1838 and 1982. It had headquarters in Roanoke, Virginia for most of its 150 year existence.

The company was famous for manufacturing steam locomotives in-house at the Roanoke Shops as well as their own hopper cars. Around 1960, N&W; was the last major American railroad to convert from steam to diesel motive power.

In the mid 20th century, N&W; merged with long-time rival Virginian Railway in the Pocahontas coal region and grew even more in size and profitability by mergers with other rail carriers including Nickel Plate Road and Wabash in adjacent areas to form a system serving 14 states and a province of Canada between the Atlantic Ocean and the Mississippi River and Great Lakes with more than 7,000 miles of trackage.

Norfolk & Western Railway was combined with the Southern Railway, another profitable carrier, to form the Norfolk Southern Corporation (NS) in 1982.

City Point, bridging the Dismal Swamp, William Mahone, Civil War The history of the Norfolk and Western Railway began with the City Point Railroad, a nine-mile line from City Point (now part of the independent City of Hopewell, Virginia) to Petersburg, Virginia. This short-line, formed in 1838, played a crucial role in the US Civil War during the Siege of Petersburg in 1864-1865. After the War, it became part of the Southside Railroad.

William Mahone (1826-1895), a Virginia Military Institute engineering graduate, built the Norfolk and Petersburg Railroad beginning in 1853 and eventually became its president in the pre-Civil War era. Mahone's innovative roadbed through the Great Dismal Swamp near Norfolk, Virginia, employs a log foundation laid at right angles beneath the surface of the swamp. Still in use today, it withstands immense tonnages of coal traffic - today's freight on a very effectively engineered 19th century track.

Mahone married Otelia Butler, from Smithfield in Isle of Wight County who was said to be a "cultured lady". Her father, the late Dr. Robert Butler (1784-1853) had been Treasurer of the State of Virginia.

Popular legend has it that Otelia and William Mahone traveled along the newly completed Norfolk and Petersburg Railroad naming stations along the 52-mile tangent between Suffolk and Petersburg from Ivanhoe a book she was reading written by Sir Walter Scott. From his historical Scottish novels, Otelia chose the place names of Windsor, Waverly and Wakefield. She tapped the Scottish Clan "McIvor" for the name of Ivor, a small Southampton County town. When they could not agree, it is said that the young couple invented a new word in honor of their "dispute", which is how the tiny community of Disputanta was named. The N&P; railroad was completed in 1858.

Of small stature, dynamic "Little Billy" Mahone became a Major General in the Confederate Army and was widely regarded as the hero of the Battle of the Crater during the Siege of Petersburg in 1864-1865. Otelia Mahone served as a nurse in the Confederate capital of Richmond. After the surrender at Appomattox in April 18965, General Robert E. Lee urged his leaders to return to their homes and set about rebuilding the South. General Mahone embraced this advice.

Atlantic, Mississippi & Ohio Railroad created and becomes Norfolk and Western After the war, William Mahone was the driving force in the linkage of N&P;, South Side Railroad and the Virginia and Tennessee Railroad to form the Atlantic, Mississippi and Ohio Railroad (AM&O;), a new line extending from Norfolk to Bristol, Virginia in 1870. William and Otelia Mahone moved to the headquarters city of Lynchburg. The letters A, M & O were said to stand for "All Mine and Otelia's." A fourth road of the AM&O; family was planned to extend west through the Cumberland Gap to Kentucky, but was never built.

In the early 1870s, the AM&O; operated profitably for several years but as did many other railroads, ran into financial problems as a result of the Financial Panic of 1873. Mahone retained control for several more years before his relationship with English and Scottish bondholders soured in 1876, and other receivers were appointed to oversee his work. After several more years of operating under receiverships, Mahone's role as a railroad builder ended in 1881 when northern financial interests took control. At the foreclosure auction, the AM&O; was purchased by E.W. Clark and Co., a private banking firm in Philadelphia which controlled the Shenandoah Valley Railroad then under construction. The AM&O; was renamed Norfolk and Western, perhaps taken from a 1850s charter application filed by citizens of Norfolk, Virginia. Mahone, also active in Virginia politics, was able to arrange for the state's proceeds of the AM&O; sale to go for educational purposes, including the funds to begin what is now Virginia State University near Petersburg. He was later a Senator in the U.S. Congress.

Frederick J. Kimball, Big Lick becomes Roanoke, reaching Ohio Frederick J. Kimball was a civil engineer and partner in the Clark firm. He was named to head the new N&W; and consolidated it with the Shenandoah Valley Railroad. Henry Fink, who Mahone had hired in 1855, became General Superintendent. For the junction for the Shenandoah Valley and the Norfolk & Western, Kimball and his board of directors selected a small Virginia village called Big Lick, on the Roanoke River. The small town was later renamed Roanoke, Virginia.

Kimball, whose interest in geology was responsible for the opening of the Pocahontas coalfields in western Virginia and West Virginia, pushed N&W; lines through the wilds of West Virginia, north to Columbus, Ohio and Cincinnati, Ohio, and south to Durham, North Carolina and Winston-Salem, North Carolina. This gave the railroad the route structure it was to use for more than 60 years.

Coal

Bituminous coal.In 1885, several small mining companies representing about 400,000 acres (1,600 km²) of bituminous coal reserves grouped together to form the coalfields' largest landowner, the Philadelphia-based Flat-Top Coal Land Association. Norfolk and Western Railway bought the Association and reorganized it as the Pocahontas Coal and Coke Co., which it later renamed Pocahontas Land Corp, now a subsidiary of Norfolk Southern.

As the availability and fame of high-quality Pocahontas bituminous coal increased, economic forces took over. Coal operators and their employees settled dozens of towns in southern West Virginia, and in the next few years, as coal demand swelled, some of them amassed fortunes. The countryside was soon sprinkled with tipples, coke ovens, houses for workers, company stores and churches. In the four decades before the Crash of 1929 and subsequent Depression, these coal towns flourished. One example was the small community of Bramwell, West Virginia, which in its heyday boasted the highest per capita concentration of millionaires in the country.

An aerial view of the Norfolk and Western Railway coal piers and yards at Lambert's Point, on Elizabeth River at Norfolk, Virginia.In 1886, the N&W; tracks were extended directly to coal piers at Lambert's Point, which was located in Norfolk County just north of the City of Norfolk on the Elizabeth River, where one of the busiest coal export facilities in the world was built to reach Hampton Roads shipping. A residential section was also developed to house the families of the workers. Many early residents of Lambert's Point were involved in the coal industry.

The opening of the coalfields made N&W; prosperous and Pocahontas coal world-famous. By 1900, Norfolk was the leading coal exporting port on the East Coast. Transported by the N&W;, and later the neighboring Virginian Railway (VGN), it fueled half the world's navies and today stokes steel mills and power plants all over the globe.

Roanoke Shops: building precision steam locomotives in-house The company was famous for manufacturing steam locomotives in-house. It was at the Norfolk & Western's Roanoke Shops, which employed thousands of craftsmen, where decades later the famed classes A, J, and Y6 locomotives would be designed, built and maintained, made the company known industry wide for its excellence in steam power.

Around 1960, N&W; was the last major railroad to convert from steam to diesel motive power. However, several of its famous steam locomotives, including J class # 611 and A class # 1218 are now on display at the Virginia Museum of Transportation in Roanoke, VA.

World Wars, Great Depression, and efficiencies Norfolk and Western operated profitably through World War I and World War II and paid regular dividends throughout the Depression. During World War I, the NW was jointly operated with its adjacent competitor, the Virginian Railway (VGN), under the USRA's wartime takeover of the Pocahontas Roads. The operating efficiencies were significant, and after the war, when the railroads were returned to their respective owners and competitive status, the NW never lost sight of the VGN and its low-grade routing through Virginia. However, the US Interstate Commerce Commission (ICC) turned down attempts at combining the roads until the late 1950s, when a proposed Norfolk & Western Railway and Virginian Railway merger was finally approved.

An N&W; section gang on a hand car at Max Meadows, Virginia, circa 1915.[edit] The Virginian Railway — an engineering marvel of its day The Virginian Railway (VGN) was conceived and built by William Nelson Page and Henry Huttleston Rogers. Page had helped engineer and build the Chesapeake & Ohio Railway (C&O;) through the mountains of West Virginia and Rogers had already become a millionaire and a principal of Standard Oil before their partnership was formed.

Early in the 20th century, they built a "Mountains to Sea" railroad from the coal fields of southern West Virginia to port near Norfolk at Sewell's Point in the harbor of Hampton Roads. They accomplished this right under the noses of the pre-existing and much bigger C&O; and N&W; railroads by forming two small intrastate railroads, Deepwater Railway, in West Virginia, and Tidewater Railway in Virginia. Once right-of-way and land acquisitions had been secured, the two small railroads were merged to form the Virginian Railway.

Engineered by Page and financed almost entirely from Rogers' personal resources, the VGN was built following a policy of investing in the best route and equipment on initial selection and purchase to save operating expenses.

Mark Twain spoke at the dedication of the new railroad in Norfolk, Virginia only 6 weeks before Rogers died in May, 1909 following his only inspection trip on the newly completed railroad. That June, Dr. Booker T. Washington made a whistle-stop speaking tour on the VGN, traveling in Rogers' private car, Dixie, and later revealing that Rogers had been instrumental in funding many small country schools and institutions of higher education in the South for the betterment of Negroes.

For 50 years, the Virginian Railway enjoyed a more modern pathway built to the highest standards, providing major competition for coal traffic to its larger neighboring railroads, the C&O; and N&W.; The 600-mile VGN followed Rogers' philosophy throughout its profitable history, earning the nickname "Richest Little Railroad in the World." It operated some of the largest and most powerful steam, electric, and diesel locomotives.

The VGN installed a large 134 mile-long railway electrification system between 1922 and 1926 at a cost of $15 million, and had its own power plant at Narrows, Virginia. It shared electrical resources with the Norfolk and Western between 1925 and 1950, when the latter discontinued its own electrified section through the great Flat Top mountain. The larger electrification of the VGN was also discontinued under Norfolk & Western management in 1962, following the merger.

The Modern Railroad Merger Era 1960-1982

Train No. 25, the Powhatan Arrow, speeds through Salem, Virginia on July 11, 1953.When the Virginian Railway was finally merged into Norfolk & Western in 1959, it is widely believed that the Interstate Commerce Commission (ICC) approval began a merger movement and a modernization of the entire US railroad industry. In 1964, the former Wabash; Nickel Plate; Pittsburgh and West Virginia Railway; and Akron, Canton and Youngstown Railroad were brought into the system in one of the most complex mergers of the era. This consolidation, enhanced by the addition of a more direct route to Chicago, Illinois in 1976, positioned Norfolk & Western as an important Midwestern railroad, providing direct single-line service between the Atlantic Ocean on one side and the Great Lakes and Mississippi River on the other.

In the late 1960s, Norfolk & Western also acquired Dereco, a combination of the Delaware and Hudson, Erie Lackawanna Railroad, Reading Railroad, and Central Railroad of New Jersey. However, this subsidiary consisting of troubled northeastern US railroads was not merged into the Norfolk & Western. Most of Dereco later became part of Conrail. Some of those portions later also became part of Norfolk Southern when in it acquired the major portion of Conrail in 1999. On September 1, 1981, Norfolk & Western acquired Illinois Terminal Railroad. NW was also a major investor in Piedmont Airlines.

Autoracks: competing with trucking In the 1950s, Canadian National Railway (CN) introduced a group of autoracks which represented a new innovation. The CN bi-level auto-rack cars had end-door cars. They were huge by the standards of the time; each 75-footer (23 m) could carry 8 vehicles. These cars were a big success and helped lead to the development of today's enclosed auto racks. Tri-level versions were developed in the 1970s.

During the 1960s, autoracks took over rail transportation of newly-completed automobiles in North America. They carried more cars in the same space and were easier to load and unload than the boxcars formerly used. Ever-larger auto carriers and specialized terminals were developed by N&W; and other railroads.

The railroads were able to provide lower costs and greater protection from in-transit damage (such as that which may occur due to vandalism or weather and traffic conditions on unenclosed truck trailers). Using the autoracks, the railroads became the primary long-distance transporter of completed automobiles, one of few commodities where the industry has been able to overcome trucking in competition.

Becoming part of Norfolk Southern — joining with a strong partner In the early 1980s, the profitable Norfolk & Western combined forces with Southern Railway, another profitable company, to form today's Norfolk Southern and compete more effectively with CSX Transportation, itself a combination of smaller railroads in the eastern half of the United States.

Today, much of the former Norfolk and Western Railway is a vital portion of Norfolk Southern Corporation, a Fortune 500 company which has its headquarters in Norfolk, only a short distance from the coal piers at Lambert's Point.



Equipment Trusts by Terry Cox

The first bond that mentioned “equipment” was issued in 1862. From then until the turn of the century, equipment bonds were pretty much normal bonds. The idea was to borrow money from investors to buy equipment and then use that equipment as collateral. In practice, the situation was like modern individuals using banks’ money to buy cars.

Like automobiles, equipment is expendable and does not last long. Moreover, equipment like locomotives, lasted longer than wood sided coal cars or gondolas for hauling scrap iron. Apparently in response, railroads started selling different kinds of equipment bonds with different interest rates and terms.

Unlike private autos, though, most rail equipment moves around and is seldom used by only one company. In fact, rail cars may move for months, even years, without coming back to the rail system that owns them. Companies will use other companies’ equipment and pay time- and mileage-based rental fees. In that respect, equipment ownership tends to be an equipment leasing business.

“Equipment trusts” started appearing around 1907 as companies began separating ownership of equipment from the rest of their rail operations. While trust certificates look like typical vertical format bonds, a close reading of the text suggests they acted more like hybrids between stocks and bonds. This is especially true with recent trust certificates. Like normal bonds, most equipment trust certificates are issued in $1000 denominations. However, many are labeled as “shares of $1000.” Coupons were often attached, and in the early years, certificates plainly stated that coupons were exchangeable for interest payments. Later certificates, however, say that the coupons represent dividend payments.

Look carefully at most equipment trusts and you will see that they are labeled with railroad names without the word “company.” This is because the equipment is not actually owned by the railroad, but by the trust. The trust, in turn, is commonly administered by a large New York-based bank or trust institution. It is always a little hard to decipher the exact intent, but in general, equipment trust certificates represent ownership of equipment that is leased to specific railroads. The modern-day equivalent is the trend of people leasing their family automobiles from banks or manufacturers. Since large companies are in the business of leasing equipment, they gain tax benefits in the form of depreciation.

From a cataloger’s standpoint, I have concluded that most trusts were entities separate from railroad companies, Consequently, most (but certainly not all) equipment trusts will appear in the next edition as separate companies. Since the last newsletter, three or four major contributors sent me probably 30-40 new trust certificates. Some were tough to describe because they vary so minimally from each other.

The most obvious way to differentiate between equipment trust certificates are with series designations. They are usually lettered from A to Z, then AA to ZZ. I have not even come close to cataloging a complete series from any company. Large companies issued many different trusts.So far, the best represented are the Southern and the L&N;, both with 15 certificates apiece. I’m betting that the Southern issued at least 20 trusts. There is compelling evidence that the L&N; issued at least 63 different series!!

Different series were generally, but not always, issued chronologically. For instance Series C certificates were usually issued after, or at the same time as, Series B certificates. However, series normally varied by redemption dates, interest rates, or both.

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About Specimens

Specimen Certificates are actual certificates that have never been issued. They were usually kept by the printers in their permanent archives as their only example of a particular certificate. Sometimes you will see a hand stamp on the certificate that says "Do not remove from file".

Specimens were also used to show prospective clients different types of certificate designs that were available. Specimen certificates are usually much scarcer than issued certificates. In fact, many times they are the only way to get a certificate for a particular company because the issued certificates were redeemed and destroyed. In a few instances, Specimen certificates we made for a company but were never used because a different design was chosen by the company.

These certificates are normally stamped "Specimen" or they have small holes spelling the word specimen. Most of the time they don't have a serial number, or they have a serial number of 00000. This is an exciting sector of the hobby that grown in popularity over the past several years.