The Delaware & Hudson has a very long and interesting history. The D&H started life as the Delaware & Hudson Canal Company, serving the coal fields of northeastern Pennsylvania. Before railroads, canals were the main method of transporting heavy goods such as coal. In the early 1800s, most of these canals were financed by individual states. The Delaware & Hudson Canal was the first canal financed by investors rather than the states, and was one of few privately owned canals of the era. Construction of the D&H Canal lasted from 1825 to 1828, and employed thousands of workers.
D&H planned to transport from the coal mines in Carbondale, Pennsylvania to the Hudson River entirely by canal. However, the number of locks required to summit the Moosic Mountains between Carbondale and Honesdale made this impossible. This led to the formation of the gravity railroad, with construction beginning in 1827.
This gravity railroad utilized a series of inclined planes and steam engines to pull carloads of coal up and over the Moosic Mountains. This solved the issue of the locks and allowed the coal to pass up to an elevation of nearly 1,000 feet. The gravity railroad in addition to the canal system allowed a seamless transport of coal from northeastern Pennsylvania to the Hudson river.
Another first for American rail happened for the D&H when one of the engineer assistants brought back the Stourbridge Lion from England. This was the first steam engine run on US rails. However, the Stourbridge Lion proved too heavy for use on the gravity railroad and was consigned to ruin.
D&H saw much growth in their tonnage and canal mileage during the mid 1800s. Originally the D&H canal was 32′ by 20′ by 4′ deep with 76′ by 10′ locks. In the 1840s and 1850s the D&H canals were deepened to 6′ and the locks were enlarged to 90′ by 15′. This increased the capacity from 200,000 tons to 1,000,000 tons annually. However, during the late 1800s, the use of railroads grew while canals declined. Canals were limited by season, droughts, floods and unpredictable weather while railroads could transport freight in nearly all conditions. By the turn of the 20th century the D&H Canal was abandoned.
As the D&H canal system experienced its growth and subsequent decline, the D&H also grew its railroad holdings. In 1866, D&H contracted with the Albany & Susquehanna Railroad (A&S) for access to the north. Then, in 1868, D&H contracted with Erie to build the Carbondale-Lanesboro line, and in 1871 the D&H opened a line from Lanesboro north to Nineveh, New York on the A&S line.
At about the same time, D&H built south from Carbondale to Scranton. However, there were some complications: the D&G gravity lines were 4’3″ narrow gauge, the A&S lines were 6′ broad gauge, and the new D&H lines were built in 4’8.5″ standard gauge. This required triple gauge track in some areas in order to accommodate all three gauges on the same line.
As rail traffic increased, the D&H used double track along most of the A&S lines and the main line from Albany north to Whitehall. It acquired hotels, steamboat lines on Lake Champlain and Lake George, and electric railways throughout the Albany area and north to Sarasota Springs and Lake George.
In the early 1900s, the D&H extended into Canada with the acquisitions of the Quebec, Montreal & Southern Railway, and the Napierville Junction Railway. The Napierville Junction Railway proved to be more important as it connected the Canadian Pacific (CP) and the Canadian National (CN) railways.
The early 1900s saw emphasis placed on upgrading motive power. Freight service was provided by the sturdy Consolidation 2-8-0s since the main traffic was coal and tractive power was more important that speed. As coal traffic decreased in the 1930s, oil traffic rose to become the main commodity along the D&H. This change led to the need to develop bridge traffic between the Midwest and New England and Canada, which in turn led to a need for speed. The 2-8-0s were not up to the task so D&H replaced them with the new Challenger engines.
In the early 1940s, D&H extended into Tahawus, New York to mine titanium. This line ran through heavily forested areas, so D&H purchased two switchers to reduce the fire risk along the route. The railroad was then fully dieselized in 1953 with only two types of locomotives: ALCO 1,000 horsepower switchers and ALCO 1500-1600 horsepower road-switchers. This was the first all-hood-unit dieselization of a major railroad.
In the 1960s, D&H experienced an increase in passenger traffic due to Expo 67 in Montreal. The D&H purchased 12 streamlined coaches, diner-lounges, and head-end cars from the Denver & Rio Grande Western Railroad, upgrading from their fleet of 6 coaches built in 1939. To haul these cars, D&H purchased four ALCO PA-1 locomotives from the Atchison, Topeka & Santa Fe Railway.
The beginning of the end for the D&H came when it was purchased by Guilford Transportation Industries (GTI). GTI immediately consolidated operations with the B&M and MEC, announced layoffs, shop closings, and pay cuts. Gross mismanagement by GTI led to the New York, Susquehanna & Western Railway (NYS&W) being designated to operate D&H by the ICC, forcing GTI out.
The D&H was again up for sale in 1990. CP was designated as operator pending sale, ousting NYS&W. In January 1991, CP purchased D&H for $25 million and assumed all operations. D&H did not maintain locomotives or rolling stock, but CP began regular freight service to Philadelphia and Newark. Trackage was upgraded or abandoned and D&H began to thrive again under CP management.