The history of the New York Central Railroad (NYC) began with the Erie Canal. The Erie Canal opened in 1825, and was the main route of transportation between Albany and Buffalo, New York at the time. However, this water route included several locks, and was thus extremely slow. In an effort to reduce transit time, stagecoaches began traversing the direct routes between cities. Then in 1826, the Mohawk & Hudson Rail Road (M&H) was incorporated to replace the stagecoach route between Albany and Schenectady. The M&H began operation in 1831 with it’s first locomotive, the DeWitt Clinton. Shortly after the M&H began operation, there was a call for a railroad to connect Albany with Buffalo, reducing transit time, and reducing the load on the Erie Canal.
After the success of the M&H, several other railroads replaced overland stagecoach routes along the path, and in 1841 it was possible to make the entire journey from Albany to Buffalo by rail in 25 hours. Then in 1853, the ten different railroads connecting Buffalo to Albany were consolidated as the New York Central Railroad.
By 1863 Cornelius Vanderbilt had acquired control of the New York Central, consolidating it with the Hudson River to form the New York Central and Hudson River Railroad (NYC&HR).
As the controlling interest in the New York Central, Vanderbilt wanted to build a grand terminal for the NYC&HR in New York City. Construction for the Grand Central Depot began in 1869 on the corner of 42nd Street and Fourth Avenue, and was completed in two years. The Grand Central Depot served as three separate stations serving the NYC&HR, the New York & Hudson, and the New Haven.
This was the first of the three Grand Centrals, with the present station, the Grand Central Terminal, opening in 1913. The Grand Central Terminal was a marvel with 48 total platform tracks on two subterranean levels, depressing and decking over the tracks along Park Avenue, and electrification of the NYC lines north to Harmon and White Plains.
Over the next two decades, the New York Central underwent name changes, consolidations, mergers, acquisitions, and expansions. The final name change to the New York Central System occurred in 1935. By that point, it was the largest eastern railroad in terms of track mileage, and second only the the mighty Pennsy in terms of revenue. The NYC operated mainly industrial freight and passenger service.
The NYC System continued to compete with the PRR through the following decades, with the advantage of generally level topography over the rugged mountainous terrain of the PRR. This led to steam locomotives designed for speed along the famous “Water Level Route” of the NYC as opposed to the small mountain trains of the PRR.
The NYC began its decline after World War Two due in part to rising labor and material costs. Due to rising costs and falling revenue, the NYC was forced to rapidly diesellize, hoping to save money on the costly steam engine repairs and maintenance. Airline service and the Interstate Highway Act of 1956 put further strain on the NYC as more passengers travelled by car or plane, and more freight was transported over the new highway system. All of this in conjunction with substantial tax burdens – both property taxes on the NYC land holdings and the wartime-era tax of 15% on passenger fares – created such a substantial burden that the NYC began looking for merger partners.
The end result was NYC merging with the PRR in the the disastrous Penn Central merger in 1968. By 1970, the Penn Central filed for bankruptcy. As the PC was falling apart, the federal government created the Consolidated Rail Corporation (Conrail) to keep the PC line from completely shutting down. Conrail has since been split between CSX and Norfolk Southern, with CSX ending up with much of the original NYC.