In 1975 the death of railroading in the northeastern US was virtually imminent. Railroads were going bankrupt and the condition of each lines’ assets was deteriorating. Small cities and towns were concerned that their local industries would be cut off from their customers and suppliers should there be a complete shutdown of all railroads. To address the critical need for rail transportation, Conrail had already been formed on paper by 1975, and the government was sorting out the details of new operations that would take place on April 1st, 1976. The Penn Central “Chicago Line” would be left as the primary route across New York state, feeding other lines such as the Corning ( Fallbrook ) Secondary, Elmira Branch, and Auburn Road. Left out of the mix would be much of the Lehigh Valley’s trackage, which covered a similar route from Oak Island, New Jersey to Buffalo, NY.
Referring to longstanding anti-trust laws, and wanting to make sure that rail-served industries along the Lehigh Valley prospered, the government offered the Lehigh Valley's trackage and property for sale at a very low cost in the interest of attracting a buyer, and eliminating the cost of abandonment. In addition, the government offered the potential buyer grants and zero-interest long-term financing to repair the line. The Delaware & Hudson was one of the only railroads healthy enough to stand on its own at the time, and therefore one of the only lines serving the Northeast that was left out of Conrail. Given the amazingly low price tag and benefits, the D&H saw the perfect opportunity to extend their network beyond their North/South line from Montreal to Pennsylvania. The D&H took possession of the LV in January of 1976 so that it could have some of the most crucial infrastructure improvements made prior to the April 1st operational start of Conrail.
The conveyance of the LV to the D&H ensured competition in places where the two lines met, such as in Geneva, NY. However, this competition made switching of local industry in Geneva quite tedious. Having to hand off cars to another railroad for the first or last mile of their journey had always been an unnecessary expense during PC & LV days, and the CR/D&H mix in the small city of Geneva would certainly ensure that confusion continued. A group of businessmen in Geneva had been watching from the sidelines to see how their companies would be affected by these changes and realized the clear opportunity to simplify local switching operations, improve service times, and ensure availability of rolling stock. They formed GHC, Geneva Holding Company, owned by a group of core businesses served by rail in the city and surrounding communities. With the help of local & state politicians, they met with the STB and the would-be leaders of Conrail to propose a terminal railroad based in and serving Geneva. The Seneca Terminal Railroad ( reporting mark STRR ) was formed upon approval by all parties, with the ownership structure having 60% held by GHC, and 20% each held by CR and D&H. Saving jobs in the local economy, the local crews are employed by STRR using using mostly shared equipment from CR and D&H. Track and facility maintenance is performed primarily by STRR with assistance from both lines as needed.
